The surge in food delivery services, accelerated by the pandemic, is facing a backlash from restaurants that are increasingly dissatisfied with the high commission fees charged by platforms such as DoorDash and Uber Eats. Many owners now view the convenience offered by these apps as outweighed by the financial burden, with commissions often consuming 15 to 30 percent of an order's value.
A survey of 450 restaurant operators conducted in January revealed a significant shift in strategy. According to Restaurant Business Online, 53 percent of respondents indicated plans to reduce or eliminate their use of third-party delivery platforms, while only 32 percent intended to maintain their current provider.
In response, many restaurants are investing in proprietary online ordering systems and branded applications to retain a larger portion of their revenue. Some operators have already made the decision to cease using third-party apps altogether. Javier Trujillo, a restaurateur in Omaha who owns five establishments, reported paying nearly $188,000 in delivery commissions in the past year before discontinuing his services with DoorDash and Uber Eats. He told Entrepreneur that the apps were diminishing profits and, at times, forced restaurants to absorb the cost of orders that were prepared but never collected by a driver.
Texas Roadhouse Explores First-Party Delivery
Amid this industry trend, casual dining chain Texas Roadhouse has reportedly initiated a small-scale trial of first-party delivery at select locations. Analysts at Deutsche Bank suggest this move is an effort to assess whether the company can increase sales through its own delivery service without compromising profit margins. This test follows the chain's introduction of a digital kitchen system aimed at enhancing its capacity for takeout orders.
Unlike many restaurants that adjust menu prices on delivery apps, Texas Roadhouse is maintaining its standard in-restaurant pricing for delivery orders. Customers are charged a $5.50 delivery fee, in addition to a tip, which is passed directly to the delivery provider, making the initiative effectively neutral to the company's margins. Deutsche Bank analyst Lauren Silberman noted that while Texas Roadhouse has historically offered third-party delivery only in limited circumstances, the current first-party trial could indicate a future expansion of the concept.
Silberman acknowledged that much of the business generated by first-party delivery might come at the expense of third-party platforms rather than representing entirely new sales. However, she and her team believe this approach could help Texas Roadhouse achieve incremental order volume and gain greater control over the customer experience. The company currently does not offer a nationwide delivery service, though some individual locations facilitate customer orders through DoorDash and Uber Eats for both pickup and delivery. Texas Roadhouse competes with other casual dining chains such as Outback Steakhouse, Logan's Roadhouse, LongHorn Steakhouse, Chili's, and Applebee's.