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How Uber Eats Service Fees Work & How To Avoid Paying Them

What’s up with Uber Eats Service Fees? From what it costs to why it exists, we detail everything you need to know about the Uber Eats Service Fee.

Key Takeaways

  • The Uber Eats service fee is designed to cover operational costs and is not directly distributed to drivers.
  • Increase order size or subscribe to Uber One to reduce service fees.
  • Service and delivery fees on Uber Eats do not cover driver tips; tipping is optional.
  • Uber Eats service fee rates have evolved with market and operational changes.

What is the Uber Eats Service Fee?

The Uber Eats Service Fee is a charge included in the price breakdown at checkout, designed to cover costs like credit card fees and support.

It replaces the old booking fee and applies only to orders delivered by Uber Eats drivers from local restaurants.

The fee varies as it is a percentage of your order’s subtotal, with specific minimums and maximums depending on the location. If a restaurant uses its own delivery drivers, this fee does not apply.

Where do Uber Eats Service Fees Go?

Uber Eats Service Fees are primarily used to offset delivery costs, maintain the platform, and cover various business expenses like credit card processing, platform upkeep, support staff, and marketing efforts.

Although these fees do not directly go to drivers, except for specific cases like the California Drivers Benefit fee, they support the overall operation and sustainability of the Uber Eats service.

This fee structure enables Uber Eats to offer a convenient meal delivery service while covering the costs associated with providing such a service, despite it not being a direct source of profit for Uber.

Brett’s Take: Thoughts From an Expert

The final cost of an Uber Eats order can significantly exceed the original menu prices due to the added fees.

A good portion of the added costs come from the service fees, which are a percentage of the order subtotal, intended to cover operational costs of running the Uber Eats platform.

However, many users question where this money goes, and are curious to know whether or not it goes to drivers directly.

I’m an Uber Eats driver and I can tell you that the fee doesn’t go towards drivers – it goes to Uber directly.

Driver income mainly comes from base pay for each delivery, but can be increased by surge pricing, promotions, and tips.

I wish Uber would be a bit more transparent about where this fee actually goes. Many customers mistakenly think that this is the driver tip, which is incorrect.

How to Avoid Uber Eats Service Fees

To minimize Uber Eats service fees, consider ordering more to avoid the small order fee. Adding items like a side dish or drink can help reach the minimum threshold.

Another option is subscribing to Uber One for $9.99 per month, which offers unlimited free delivery and a 5% discount on orders.

While this doesn’t remove the service fee, it eliminates delivery fees and can be used in conjunction with other promotions for additional savings.

Changes to the Service Fee Over Time

The Uber Eats fee system has evolved significantly since its inception.

Initially launched as UberFresh in Los Angeles with limited options and low fees, the model shifted to a flat-fee approach for deliveries within a set radius to address delivery time complaints.

As Uber Eats expanded, new markets experienced introductory low fees and promotions to attract customers.

However, the COVID-19 pandemic dramatically increased demand for food delivery, leading to higher fees despite the increased risks for drivers and financial pressures on restaurants.

Uber Eats, like other delivery services, also charges restaurants commission fees, adding to the financial burden during a time when many were struggling.

This led to pushback from drivers, customers, and restaurants, including legal actions and calls for fee regulation and caps, notably highlighted by California’s Proposition 22 and lawsuits in New York City against high commission fees.

Frequently Asked Questions

vector graphic of a hand holding an uber eats pass and exchanging that for food

Why is the Uber Eats Service Fee so high?

Uber Eats service fees vary based on location, restaurant choice, and order size, and are not necessarily higher than those of DoorDash, Postmates, or GrubHub.

These fees, which might include a delivery fee and a separate service charge, compensate for the convenience of delivery and support the restaurant’s access to the delivery marketplace.

Is an Uber Eats Service Fee a tip?

No. The Uber Eats service fee and delivery charges don’t include the tip. Tipping is optional, but it’s the only part of the fees that your delivery driver sees.

4 thoughts on “How Uber Eats Service Fees Work & How To Avoid Paying Them”

  1. Hi. Very interesting read on the rideshare business. I’ve been an Uber driver for more than 3 years base in Perth WA. Enjoyed it unfortunately with the operating cost and tax implications warrants me to review the rideshare business and contemplating to switch to food delivery. Would appreciate your advise and comments. TQ.

    Reply
  2. While I agree that business need to make money, the fees need to be proportional to the value they provide. From consumer’s perspective, ordering a $10 meal and pay $10 service fee (include $5 tips, as those guys need to make money too) is just ridiculously. Uber is not providing any other service except the app. Do you know how many apps are free nowadays? How do they survive? Charging these kind of fees just for using a couple of minutes of the app is way too high. Do the online retailers charge us for ordering stuff?

    Reply
  3. Do the Uber Eats drivers get any of the service fee? R they pd. by mileage like regular Uber drivers or svc. fees go 2 Uber

    Reply
  4. UberEats also charges 25% from the delivery drivers in addition to what it takes from customers. You know, for ‘services and fees’ -from- the driver. So you, the customer, pay UberEats these fees, and then the driver gets even more automatically deducted from their income. Uber is getting paid in both directions.

    Reply

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