Ep. 89 - Inflation, Thy Name is DoorDash: The Hidden Cost of Convenience

economy finances Sep 04, 2023
What’s Your 1 More Podcast
Ep. 89 - Inflation, Thy Name is DoorDash: The Hidden Cost of Convenience

As consumers, we often talk about economic policy and how it impacts our daily lives. One area we're noticing is the cost of food, especially when dining out.


What you may not know is that there is a silent killer of American credit, and it’s from an app you probably use regularly: DoorDash! 


We decided to dig deeper into the inflation happening right on our doorsteps—specifically, the world of fast food delivery and its associated costs.


Here’s why… 


The Spark: Thursday Night Lights and a Chick-fil-A Order

One evening after a high school football game, with the clock ticking close to 9 p.m., a quick DoorDash order from Chick-fil-A seemed like the best option for dinner. 


But upon reviewing the receipt, the price was jaw-dropping. This led to the broader question: just how much does convenience cost us?


Chick-fil-A vs. McDonald's: Comparing the Giants

To better understand fast food inflation, we compared two industry giants: Chick-fil-A and McDonald's. This involved ordering online, factoring in delivery charges, and then physically visiting these places to check the in-person prices:


  • Inflation on the Menu

    • Chick-fil-A has seen a 21% price increase since 2021.
    • McDonald's menu prices increased by 14% from 2020 to 2022.


  • The Delivery Markup

    • At McDonald's, an online order for a 10-count nugget meal was $10.99. With additional fees and the lowest tip, the final amount became $17.91. However, purchasing in-store was only $9.19, showcasing a near-double price markup for online orders.


DoorDash's Role

What drives these extra costs when you tap 'Order'? It's essential to understand DoorDash's business model:


  • Commission Plans: DoorDash charges restaurants a commission fee between 15-30% of the order cost. This expense often gets passed on to the customer in one way or another.


  • DoorDash Drive: A white-label service where DoorDash is integrated into a restaurant's app. Chick-fil-A uses this model. They can choose drivers based on ratings and offer a seamless experience without customers leaving their interface.


All these don’t even take tipping into consideration, which will compound the total charges over time. 


The Reality of Convenience

While technology provides us with incredible convenience, it's crucial to understand the trade-offs. A near 80% markup on food costs is a steep price to pay. 


These conveniences might be eroding our wallets more than we realize and are a driving force behind America’s shocking consumer debt ($17.06 Trillion as of Q2 2023).


Bottom Line

The inflation on our home front isn't just in the bigger economic policy debates. It's right there on our dinner plates and in our DoorDash carts. It's up to each of us to decide if the convenience is worth the price. 


But awareness is the first step, and now, more than ever, it's essential to be a conscious consumer. Whether discussing economic policies or fast food prices, every dollar counts.