Food Delivery’s Fast-Paced World

Ronald Coleman is on track to make $120,000 this year delivering restaurant food to people’s homes, five days a week from 5 a.m. to 10 p.m.

He was living in Mililani when he decided to change the focus of his deliveries using the DoorDash app to the area from Downtown Honolulu to Waikīkī. It wasn’t easy at first. For instance, he says he got confused by the layout of Ala Moana Center and where each restaurant is. On his first day covering the new area, he only made $30, but kept going.

Eventually, “it became easier and easier for me to do it,” he says. “It has just been working out ever since and I’m having fun doing it.”

The popularity of food delivery apps such as DoorDash, Uber Eats, Grubhub and Bite Squad surged during the Covid-19 pandemic and continues to grow, though at a slower pace, according to an October 2023 report from Bloomberg Second Measure. For instance, monthly sales in April 2020 for the overall meal delivery industry were 162% greater than in April 2019, the report said. September 2023 sales were 7% higher than in September 2022.

The Bloomberg Second Measure report said DoorDash had 65% of the national market share, Uber Eats had 23% and Grubhub 9%. Revenue of the U.S. industry was estimated at $26.1 billion in 2022.

How The System Works

Food delivery apps allow users to order food from restaurants and fastfood chains and have it delivered to their homes or other locations. Not all food establishments participate with the apps, but many do.

To make money, Uber Eats charges restaurants a percentage of the price of each order – a percentage that varies based on the restaurant’s chosen plan, its number of locations and the location of the restaurant.

When a user orders from a restaurant, the establishment chooses to accept or decline the order. If the establishment accepts, the order will get sent to a driver; if the driver declines the order, it is sent to another and another until one accepts.

According to Coleman, the DoorDash driver, he gets paid when he completes an order and gets to keep all the tips from customers.

Coleman delivers an order from Zippy’s to a customer in Downtown Honolulu. | Photo: Aaron Yoshino

In one example, a Zip Pac purchased directly from Zippy’s restaurants cost $14.75. But if the Zip Pac is delivered by DoorDash, the price rises to $18.90, which includes the driver’s tip, delivery and service fees.

According to DoorDash, delivery fees can vary based on how close you are to a restaurant’s location and other factors. DoorDash also offers a “DashPass” that lets a customer skip some of these additional fees if they pay $9.99 a month.

I live in Waipahu, and if I wanted to order a Big Mac meal from McDonald’s, it would cost $9.99 if I went to the nearest location, about a mile from my house. But on the DoorDash app, the price comes to $19.04, including delivery and services fees, and tip. The delivery fee itself for the location nearest to my house came out to $3.99.

Tex 808 BBQ & Brews in the Moanalua Shopping Center is 5.4 miles from my house. If I ordered food there on the DoorDash app, the delivery fee would be $8.49.

For Users, Convenience Is Key

It takes about 30 minutes to an hour to receive a food delivery order, says Kāne‘ohe resident Myles Yamamoto, who spends around $40 to $60 a week ordering delivery from fastfood chains via Uber Eats. When he orders from “casual restaurants” – the category considered one step above fast food restaurants – his weekly total can hit $100.

Yamamoto, who doesn’t drive, says the convenience of having food delivered to his door trumps the higher costs.

His first order came from McDonald’s. “It was a good experience and the food was packaged as if I went through the drive-thru,” he says.

“It is much nicer than always getting pizza, which up to that point was the only other option.”

Frankie Koethe, a West O‘ahu resident and another regular Uber Eats customer, writes in a Hawaii Business callout that she always tips delivery drivers “because it would have cost me time and fuel to pick it up myself.”

Honolulu resident Julie Meier, who’s used Uber Eats, DoorDash, Bite Squad and Grubhub, agrees that it’s all about convenience. She has three grandsons, ages 7, 5 and 1, and says it is easier to order food rather than take her grandsons to a restaurant to dine in or to pick up.

Still, incorrect orders happen. “When an order is wrong, it’s upsetting to the person whose food is missing, especially a grandchild,” she writes.

Delivery services do offer credits and refunds, or return later with any missing items, but the follow-up delivery could take another hour to arrive.

Meier says she tries not to use restaurants that raise prices on food items that will be delivered, and notes that some apps have subscription offers that eliminate extra costs such as delivery fees.

Full-time Job

Coleman – the driver on track to make $120,000 this year – has been delivering for DoorDash for three years. In his first year, he made $74,000 and in 2022, he made $114,000.

He says he once delivered groceries for Instacart but made only $500 after a week. He made $500 on his first day with DoorDash and has stuck with the app ever since, calling the decision “a no-brainer.”

Like many others, the pandemic led him to try food delivery. While living in his home state of Michigan, Coleman used to go to people’s homes to fix their cars but when Covid struck in 2020, he didn’t want to do that anymore. He started delivering food to supplement his income.

But when the pandemic slowed in 2021, the number of food deliveries dwindled. So he moved to Hawai‘i with his brother to continue doing DoorDash here. Coleman says has been traveling to O‘ahu for multiple years, which also contributed to the reason why he moved to the island.

Photo: Aaron Yoshino

Today, he lives in Waikīkī, usually wakes up around 4 a.m. and soon opens the DoorDash app. He generally gets his first delivery job a few minutes later, from a place like Denny’s, McDonald’s or Starbucks. He usually only takes orders between Downtown Honolulu and Waikīkī, but sometimes goes as far as Hawai‘i Kai depending on the “miles-to-money ratio.” When I talked to Coleman in September, he was on his way to deliver a bento catering order, a job that had him driving “2.3 miles for $8.”

His goal is “to make $200 before 2 p.m.,” because, he says, “every four hours that I’m out here, I should make $100.” He says he usually makes about 40 deliveries in a day.

In the week before I talked to him, Coleman said he made $868.75 and racked up an additional $1,336.26 in customer tips through the DoorDash app, which doesn’t include cash tips.

In September, he had already completed about 25,000 deliveries since he started using DoorDash three years ago. He calls it “dashing in paradise” because his deliveries are “always different, it’s never the same.”

“We are talking with different people and meeting different people,” he says. “Throughout your day, even fellow drivers, when you meet them, it makes it worthwhile.”

Food Establishments Boost Sales

Honolulu Bistro specializes in gourmet sandwiches, smoothies and coffee at its new location that opened last year in Ala Moana Center.

The family business started using food delivery apps during the pandemic to help boost sales, the management team wrote in an email, and now partners with Uber Eats, DoorDash, Grubhub and Bite Squad.

“We have noticed we have reached new customers on these platforms, as it is an easy way to deliver to all of the hotels and offices quickly in Waikīkī,” Honolulu Bistro wrote.

Managers there also noted that food delivery apps help make it easier for customers to place large party orders for delivery or pick up. Honolulu Bistro has a designated parking area in front of its shop for customers and delivery drivers to pick up orders.

Sheryl Matsuoka, executive director for the Hawai‘i Restaurant Association, which represents the state’s restaurant and food service industry, says food delivery app commission fees “can be a significant challenge, especially for smaller establishments.”

The fees “were as high as 30%,” but are now about 15% to 20%, she says.

Despite the high fees, some restaurants and big chain franchises like McDonald’s say they have had success using delivery apps. In 2021, McDonald’s reported that 20% of its sales – or about $13 billion – in its six biggest markets came through digital channels such as its app, kiosks in restaurants or delivery. Those top markets are in the U.S., the U.K., France, Germany, Canada and Australia.

Meanwhile, local restaurants like Nana Ai Katsu in Kaimukī have found benefits to using certain food delivery apps. The restaurant specializes in freshout-of-the-fryer tonkatsu dishes and uses Uber Eats, according to co-owner Lei-Anne Jones.

She says they tried Grubhub for about a year but did not like the drivers or app because “they didn’t tell the drivers that we pushed out order pick up times.”

Jones says they are sticking with Uber Eats because they “negotiated an exclusivity contract to get a lower rate.”

Using Uber Eats has helped increase Nana Ai’s monthly sales by 3% and when they run advertisements that Uber Eats gives them, it helps increase sales by 5%, according to Jones.

“This additional income stream has been a lifeline for many establishments during challenging times,” says Matsuoka.