What’s Wrong with Today’s Food Delivery Industry

Food delivery has become an essential service in modern life, offering convenience for customers, revenue streams for restaurants, and jobs for delivery drivers. However, beneath the surface, the industry is deeply flawed, controlled by a few major players who have turned what should be a fair and mutually beneficial ecosystem into an exploitative machine.

At first glance, the popular apps seem to make food delivery simple and efficient. But a closer look reveals that these platforms thrive on squeezing the very people who keep them running—restaurants, drivers, and customers. In this post, we’ll break down the biggest issues plaguing the food delivery industry today, supported by some startling facts about how these companies operate.

The Rise of the Giants: A Monopoly in the Making

Over the last decade major platforms have dominated the food delivery industry. Their market share has grown exponentially, driven by investor cash that allows them to run aggressive marketing campaigns, offer unsustainably low prices, and launch customer incentives like free deliveries or buy-one-get-one-free deals. But these tactics come with a dark side.

Once the customer is hooked, prices inevitably rise. The special offers vanish, and suddenly the same meal costs much more than it did when you first signed up. The reason? The platforms need to start making a return on the money they’ve burned through attracting customers and acquiring market dominance.

Here are some shocking facts about the major food delivery players:

The big players takes up to 30% of each order from restaurants, leaving them with barely enough profit to cover their costs.
Despite massive revenue growth, most of them have yet to become consistently profitable, a sign that their aggressive pricing and fee structures are unsustainable.
Delivery drivers’ pay has been steadily decreasing, with many drivers earning less than minimum wage when accounting for vehicle maintenance, fuel, and other expenses.

These platforms, despite their marketing, aren’t profitable yet, but they’re forcing everyone else—restaurants, drivers, and customers—to foot the bill.

The Hidden Costs for Restaurants: Crushing Fees

For restaurants, signing up with a food delivery service often seems like a no-brainer. They gain access to a large customer base without needing to invest in their own delivery infrastructure. However, what initially looks like a win quickly turns into a nightmare.

Most major delivery apps charge restaurants between 20% and 35% per order in commission fees. For small or medium-sized restaurants, where profit margins are already razor-thin (typically between 3% and 7%), these fees can be devastating. Many restaurants end up taking a loss on delivery orders just to stay visible on these platforms, but they feel trapped because these platforms dominate the market. Restaurants who aren’t listed are essentially invisible to the growing number of consumers who rely on apps for their meals.

Some restaurants have tried to raise their prices on these platforms to offset the fees, but that often drives customers away, leaving them in a catch-22. In many cases, the control these delivery platforms exert over restaurants is akin to a monopoly, as most of the big apps charge similar fees and behave in nearly identical ways. There’s no meaningful competition to lower fees or improve conditions for the restaurants.

Abusive Conditions for Delivery Drivers

The drivers—those who physically make food delivery possible—are arguably the most mistreated in this system. Delivery drivers are usually classified as independent contractors. This means they don’t have access to standard worker protections like minimum wage, overtime pay, or healthcare benefits.

Here’s a snapshot of the working conditions for drivers:

Drivers are paid per delivery, and after expenses, many drivers report earning less than minimum wage, especially when factoring in vehicle wear-and-tear, gas, insurance, and parking tickets.
The pay structure often includes a base pay as low as $2-$5 per delivery, with the hope that tips will make up the difference. However, tipping is inconsistent and unpredictable.
No job security or benefits: Because drivers are considered gig workers, they have no long-term job security, no benefits, and no sick leave or health insurance.
Algorithmic exploitation: Drivers’ routes, earnings, and workloads are controlled by opaque algorithms. These algorithms can suddenly reduce pay, deprioritize certain drivers, or change delivery zones, often without warning or explanation.

In many ways, drivers are at the mercy of an automated system that treats them as replaceable parts, constantly adjusting how much they earn and where they’re expected to go, often with little regard for their well-being.

The Trap for Customers: Bait and Switch Pricing

While restaurants and drivers are facing the brunt of the system’s exploitation, customers aren’t immune either. Major platforms use unsustainable onboarding incentives to lure in new users. Free deliveries, discounts, and other offers seem like a great deal at first, but these prices are often heavily subsidized by investors. Once the customer is locked in, the pricing starts to change.

Initial free delivery offers disappear, replaced with delivery fees that can range from $2 to $6 per order.
Menu prices on these apps are often higher than in-store prices, as restaurants try to offset the high commission fees they’re being charged.
Service fees and small order fees are added to many transactions, further inflating the cost.

In the end, the low-cost, convenient service that customers were initially promised turns out to be much more expensive in the long run. Worse, customers are often unaware that the restaurants they love are losing significant profits every time they order through these platforms.

What’s Really Broken: A System Designed for Profit, Not Fairness

The real issue with today’s food delivery industry is that it has been designed not for the benefit of the participants—restaurants, drivers, or customers—but for the shareholders of these giant companies. With their monopolistic tendencies and insatiable drive for profit, the platforms have created a system where:

Restaurants are stuck paying exorbitant fees to remain visible.
Drivers work long hours for unpredictable pay and little protection.
Customers are subjected to inflated prices and hidden fees after the initial honeymoon period.

This is a broken system, designed to serve the interests of a few large corporations at the expense of everyone else.

The Solution: HamHam - A Fairer Future for Food Delivery

At HamHam, we’re on a mission to change all of that. We believe that food delivery can and should be a fair, sustainable system where everyone benefits.

For restaurants, we offer extremely low rates, allowing them to keep more of their profits while still reaching new customers.
For drivers, we ensure fair pay and better working conditions, treating them as valued partners in the process, not just a cog in the machine.
For customers, we promise transparent, fair pricing without the bait-and-switch tactics. You’ll always know what you’re paying for, and you’ll never be hit with unexpected fees.

We’re here to fix what’s broken, offering a fairer alternative to the big players in the market. Together, we can rebuild the food delivery industry into something that works for everyone—not just the monopolies.

HamHam - The best way to order food