How Much Does Deliveroo Charge?

One of the major reasons we started HomeCooks is that we believe the current food delivery industry isn’t sustainable.

We found this out the hard way. Both HomeCooks founders had thriving businesses that in one way or another found it impossible to make Deliveroo, UberEats and the plethora of food delivery platforms work for us.

This is in no small part down to the commissions that these third-party companies charged us. As a guide, we found that smaller independent restaurants were often charged a starting rate of 30% of the value of the order (some up to 35%). Bigger chains can get lower rates, but this is a pretty standard commission level.

Indeed, this only tells 80% of the story. Boring tax explanation coming up (skip the next two paragraphs if you aren’t interested in the maths)…

That commission is charged on the ‘gross revenue’ of the order value, rather than the ‘net revenue.’ The gross revenue includes VAT, the net revenue does not. So for a £20 gross order, the restaurant will normally pay VAT at a 20% rate, which is £4. The net revenue is therefore £20 - £4 = £16.

The travesty is that Deliveroo’s commission will be charged on the gross revenue. So, in the example above, 30% of £20 which equals £6.

Shockingly, this means Deliveroo’s 30% commission can be 37.5% of a restaurant’s net revenue. 

This is why it’s important, if you have the chance, to collect from your local neighbourhood restaurant. DO NOT order delivery through a third-party intermediary if you can help it. The chances are, the local neighbourhood restaurant will be making a loss on your order.

Alternatively, you could order through HomeCooks where our chefs don’t have the same high-cost base and can sell food in a much more sustainable way.

If this topic is of interest, please let me know and I can go into more detail in another blog.

-Andy