The Truth About Pizza Delivery Fees and Who Gets Them

Updated on May 23, 2014
Is the Pizza Delivery Fee a Tip?
Is the Pizza Delivery Fee a Tip? | Source

You may remember a time when you ordered a pizza from a pizza chain and the cost of the pizza was the price quoted on the phone plus tax.

You then tipped the driver when he or she came to your door and had a hot pizza to enjoy.

But the concept of free delivery of pizza has changed over the past few years and many chains are adding delivery fees to their totals.

These fees can range from two dollars to five dollars in most areas of the United States and the companies that charge them are quick to add that the delivery fees are not tips to the driver. So in addition to a delivery fee you are still supposed to tip your driver, possibly adding upwards of eight dollars to what you thought your total pizza bill would be.

Why are there delivery fees? Who do they go to? As with many hidden fees, the answer seems to be that no one is really sure.

Why Are There Delivery Fees?

Most restaurants claim to have introduced delivery fees in order to stay competitive in the delivery pizza market.

Tim McIntyre, a spokesperson for Dominos pizza, told Huffington Post that pizza prices have remained pretty much the same for the last 30 years despite the cost of the ingredients and operation rising.

McIntyre notes that the delivery fee is the best way to help cover the costs of the service rather than raising prices on the pizza itself. (Dave Jamieson, January 2014)

Others note that the fee covers liability insurance for the drivers and goes toward money they pay the drivers for gas and wear and tear on their cars during delivery.

But analysts note that this usually adds up to about half the amount of the fees taken and some drivers feel that their companies are pocketing the rest.

Driver tips are being affected by pizza delivery fees.
Driver tips are being affected by pizza delivery fees. | Source

Driver Tips Being Affected By The Fee

From message boards to interviews, drivers across the country believe that the delivery fees are hurting their overall tips.

First of all, customers mistakenly think that the delivery fee is part of the tip for the driver. Legally the companies are supposed to be up front about the fee and clear that it is not a tip but the disclaimer is often hard to spot---either in fine print on the website when you order, on the pizza box itself which no one really examines until after they've paid, or on the receipt.

Huffington Post noted that when they called over the phone and ordered pizza from Papa Johns, Dominos and Pizza Hut, none mentioned the delivery fee.

How Much Should You Tip A Driver?

Just like the question of where delivery fees go, this one seems to evoke emotions and opinions.

From message boards to business articles, most seem to think that you should tip the way you would at a restaurant: 15% to 20%

A minimum tip should be set as well and most seem to agree that it's around the $4 to $5 range depending on the order and the area of the country.

Delivery is a luxury and the job can be dangerous.

If your pizza is late or damaged, make sure you understand what happened before stiffing your driver of a tip.

A March 2010 Consumerist article by Chris Moran deals with this and other common tipping misconceptions.

A former pizza delivery driver noted that the tips cut into their bottom line. Many delivery drivers make just a few dollars an hour as it is expected to be made up in tips.

But others who have been working in the industry have noted that they are actually making less on tips since delivery fees were instituted and the correlation seems to be more than accidental.

On a recent order from Dominos a $2.75 delivery fee was added to my order of two large pizzas and a two liter of Sprite. With a tip of $5.00 added, I ended up paying almost $8.00 extra plus tax for my order.

While I was aware of the delivery fees and my obligation to tip the driver, many may face sticker shock and as a result are stingier with their tips.

Pizza Companies Say Delivery Fee Is Necessary

Pizza chains that deliver say that they face stiff competition. According to a 2008 USA Today article by Bruce Horovitz, the companies introduced the delivery fee as a way to stay in business in a very competitive market.

Part of the competition lies in, of all places, frozen pizzas. The frozen pizza market has grown exponentially as, according to Horovitz, the frozen pizza brands have found ways to "make their pizzas taste more like homemade."

Delivery fees are one way that the chains are trying to make up for the loss of income.

Pizza chains are also diversifying their menu, adding pasta choices, sandwiches, chicken, and desserts as a way to add more options and appeal to a wider audience.

But at the end of the day, the problem still remains. Delivery fees are confusing and the drivers are the ones that are losing money.

Should pizza chains just increase the cost of their food rather than tack on hidden fees?
Should pizza chains just increase the cost of their food rather than tack on hidden fees? | Source

Should Delivery Fees Go Away?

Pizza delivery drivers around the country seem to agree that the extra operation costs should go into the menu prices of the items so that the customer gets a clear picture of how much his or her meal will actually cost.

But with the competition driving down the prices, it will take some convincing to get the major pizza chains on board.

The extra cost of the food may only need to be increase a fraction of what the delivery fee is in order to achieve the same profit.

If one of the big chains decided to drop delivery fees the others might follow. It could be part of an ad campaign noting that "the price you see is the price you pay."

Anyone who has ever faced sticker shock at the tacked on delivery fees plus tips plus tax might feel a little bit of relief at knowing what they will pay for their pizza up front.

Be Aware And Ask

But for now, most major pizza chains charge delivery fees. Don't be afraid to call and ask what the delivery fee is and what the restaurant uses the money for.

When ordering a pizza for delivery, know the full cost including tip and make sure you have enough to cover all of it.

If you don't want to pay delivery fees then you can always choose carryout, buy frozen pizza or make your own at home.

Finally, let the companies know how you feel about the delivery fees. Customers are their business and with enough feedback, they may change their practice.

What are your thoughts on pizza delivery fees?

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Questions & Answers

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      • profile image

        AB 

        4 months ago

        I delivered pizza for a local shop for years. At first, delivery was free...I got paid min. wage plus tips, plus the use of my personal car...then my boss decided to add a $2. delivery charge, which instantly made me lose money working this job. Everyone thought I was getting the delivery charge.

        I finally decided to talk to my boss and after a lot of back and forth, he agreed to give me $1. of the $2. delivery charge. I mean, I was using my car, my gas...and stop and go short trips ate gas, tires, starters, etc.

        I never told customers unless they asked if I got the full delivery charge.

        Once I left this job, my boss never gave another driver the $1. He kept the entire $2.

        I did work for him for over 14 yrs. so maybe that is why he compromised with me and not the others...but adding $3. delivery, then a $5. tip costs more than the sandwich your ordering for pete's sake!

      • profile image

        chris 

        9 months ago

        Pizza Owner here... we supply our own cars and insure the drivers ourselves at a cost of nearly 400.00 a month per driver. Gas costs us around 8k a year, we have 4 cars that cost about 3k a year to maintain as we go through a lot of tires. If I didn't charge a delivery fee, while paying my drivers the min wage of 13.00 an hour including payroll taxes, I'd be out of business. We can't build the cost of delivering into the cost of pizza because it would raise the price too much and punish those that don't get delivery.

        You guys are all welcome to risk everything you own and open up your own pizzeria, employee 15-20 people, and not charge for anything. Let me know how that works out.

      • wpcooper profile image

        Finn Liam Cooper 

        10 months ago from Los Angeles

        well you did make a good point when you said that most of the pizza places have not raised their prices in many years. However the profit margin on pizza is pretty good....and sometimes it's cheaper than frozen

      • profile image

        Summer Harris 

        2 years ago

        This is nothing but another way for the owners and franchises to line their pockets with more of the customers' hard-earned money and not only is it disgraceful and a bad business practice, it should be illegal! Shame on these greedy people!

      • Kristen Howe profile image

        Kristen Howe 

        3 years ago from Northeast Ohio

        Great hub LC on an interesting subject matter: pizza delivery prices. Voted up!

      • SixIRISHKids profile image

        SixIRISHKids 

        4 years ago from USA

        You should be told about the delivery fees. Something we have not been told and we kept thinking that the pizza price went up and that was not the case. So, we were being charged a delivery fee and tipping the driver nicely. Rethinking it because pizza is beginning to cost too much money unless you stop in the pizza place. Great hub.

      • Alphadogg16 profile image

        Kevin W 

        4 years ago from Texas

        Its ironic I came across this article as I just ordered pizza yesterday. I was under the impression that the delivery fee was the tip as well. I still tipped the driver, but in my opinion people want to know/see exactly what their money is being spent on, so hiding fees is never a good thing. Thumbs up on your hub LCDWriter.

      • jimmythejock profile image

        James Paterson 

        4 years ago from Scotland

        It works differently here in the UK, the delivery charge is actually handed to the driver after each delivery with tips on top. The delivery driver also gets a pre set amount of money to cover fuel costs.....jimmy

      • mlozinski profile image

        Mellisa L 

        4 years ago from Canada

        There's a pizza place that charges a $3.50 delivery fee(or what they call a processing fee) and it doesn't go to the driver at all. The process at that pizza place is, the delivery guy answers the phone, processes the order and starts the pizza. Then they get into their own vehicle(gas, insurance, car all paid for by the delivery man himself) and delivers the pizza. A lot of times people don't tip because they already paid the delivery fee that they think goes to the driver! It's really bad business in my opinion.

      • DzyMsLizzy profile image

        Liz Elias 

        4 years ago from Oakley, CA

        Oh, I agree. We no longer order delivered pizza; we're on a very fixed income, and cannot afford it. If we get pizza at all, we usually get the take-and-bake variety that you drive and pick up yourself; those places don't deliver.

        In my opinion, they should just be honest and raise the price of the food. I believe they are being disingenuous in claiming that it covers the cost of the drivers' gas and insurance. Every ad I've ever seen for delivery jobs state, "Must have own car." I think they expect the drivers to have that in place themselves. After all, in the end, it comes out exactly the same cost whether it's an added fee, or a more expensive item.

        The same exact principle applies to the practice of tipping in sit-down restaurants. It matters not whether you pay your employees enough to live on, and raise the price of the menu items to cover that, or whether the patron is expected to cough up another 20% in tips. I think tipping is an obsolete practice, and should be abolished in favor of living wages.

        Congrats on HOTD! Voted up, useful and interesting.

      • vandynegl profile image

        vandynegl 

        4 years ago from Ohio Valley

        Very interesting! Just about a month ago, I was wondering what the "extra" was in my total, when they told me the pizza was a different amount. We rarely order pizza anymore though. I can get a huge pizza at the grocery store for $4.99 and it is the same size as a large pizza that is being delivered for $15! (and that's not the delivery fee and tip either!). We have also chosen to make our own pizzas at home too! I realize that there is a convenience in having pizza delivered, but anymore, it is just so expensive!

        Thanks for sharing this information!!

      • VirginiaLynne profile image

        Virginia Kearney 

        4 years ago from United States

        I always go and pick up my own pizza--but if I did get it delivered, I'd certainly want the driver to get a fair share. I think it is reasonable to have a delivery fee but that should include a tip for the driver. Thanks for an interesting Hub!

      • FlourishAnyway profile image

        FlourishAnyway 

        4 years ago from USA

        Costs should be built in as overhead just like other expenses. I always try to tip generously. Once my young daughter went to the door and did not follow my direction about telling the delivery guy to keep the change. I felt so guilty, especially because he delivered in the rain, that I called the place up, got his name, and dropped an extra extra fat tip by the restaurant in an envelope with his name on it the next day. They have to navigate traffic, bad weather, rude customers, and do it all quickly. Congratulations on HOTD!

      • Au fait profile image

        C E Clark 

        4 years ago from North Texas

        I applied to work at Dominoes Pizza in 2008 when the minimum wage was the same as it is now. I was told I would receive minimum wage and $1 for every delivery. I would have to pay my own car insurance, gasoline, and wear and tear on my vehicle out of that $1 per delivery. Some deliveries could be as far as 10 miles one way.

        I turned the job down. If my auto insurer discovered I was using my car for commercial purposes in city driving several hours a day, it's likely my minimum pay AND $1 per delivery would not have covered the hike in my car insurance let alone any other bills I have just to stay alive. I told them I didn't believe employees should have to subsidize their business by contributing the expense of delivering their pizzas offset by a mere $1 per 8-20 mile round trip. Gas was at least as high as it is now per gallon, $3.41 this morning (North Texas). Most vehicles suck it up in city driving.

        I understand the delivery charge because they have to pay someone to drive a vehicle to your home and back and that driver isn't contributing much during that time. Not mopping floors, putting boxes together, making pizzas, taking orders, or anything else. Just driving for $7.25 an hour. Most round trips here would probably take 45 minutes depending on traffic. A delivery kills the better part of an hour in most cases and that means there isn't much left of a $13 pizza after subtracting the wages of the deliverer. Then there's ingredients and overhead.

        The delivery charges here are reasonable I think, but what the delivery person receives . . . not so much. So tip generously.

        To find out what pizza restaurant employees are getting per delivery at the different pizza restaurants (and it does vary a little), just call the pizza place on the phone and ask them. It isn't usually a secret.

        Congrats on HoTD!

      • Justin Earick profile image

        Justin Earick 

        4 years ago from Tacoma, WA

        I deliver sandwiches for minimum wage. I do get the delivery fee as well as the tip. Unfortunately, the delivery fee is only about $0.35 per item. Certainly not worth it in the end, considering the wear and tear on my car aside from fuel costs. (The other day, I drove 15 minutes to work, made two deliveries in a half hour, and had gotten 50 cents in tips, plus maybe 90 cents delivery fee. 45 minutes and 15 stop-and-go miles driven for maybe $5 after taxes. That's how you lose money at work.)

        It's an unfortunate business model, where the employer externalizes the costs of vehicles (licensing and maintenance), insurance for vehicles and drivers... directly onto the (minimum wage) employees, with the hope that customers will kindly make it worth while for the driver with a generous tip. Highly variable.

        If servers 'deserve' 15%-20%, how much does a person who uses their vehicle for their minimum-wage job 'deserve'?

        My suggestion is this - if you cannot afford the tip, then you cannot afford the order.

      • Thelma Alberts profile image

        Thelma Alberts 

        4 years ago from Germany

        Congratulations on the HOTD accolade! I can´t remember that we have to pay a delivery fee for ordering a pizza in Germany. Of course the menu you have to order should be more than 10-20€ before it can be deliver to our home. Thanks for letting me know on how it is in USA.

      • bravewarrior profile image

        Shauna L Bowling 

        4 years ago from Central Florida

        L.C. those fees should be built into the cost of the pizza as overhead expenses, just as in any other retail environment. The listed prices should cover all overhead included cost of food, payroll taxes, overhead of the building, w/c taxes, etc. That's the way business works. Don't show it as an extra cost - especially if free delivery is declared. (Who pays for the gas and insurance?)

        I usually tip the driver 20%. Better yet, I have my son pick the pizza up to avoid the additional cost altogether. BTW, I rarely order from a chain; I prefer mom and pop operations.

      • OldRoses profile image

        Caren White 

        4 years ago from Franklin Park, NJ

        I haven't ordered pizza in years. I had no idea they were doing this now. Thanks for the info. I'll continue making pizza at home.

      • kenneth avery profile image

        Kenneth Avery 

        4 years ago from Hamilton, Alabama

        Hi, LCDWriter,

        I have always wondered about this topic. Thank you for explaining this to me. I voted Up and away on this fine work. Keep up your writing and do not quit for any reason or anyone.

        I cordially-invite you to head over to my place and checkout two of my hubs and then be one of my followers.

        I would sincerely love it.

        Kenneth/ from northwest Alabama

      • LCDWriter profile imageAUTHOR

        L C David 

        4 years ago from Florida

        I think many people just order pizza every once in a while or for a special occasion so they may be both surprised and confused by the delivery fee and who gets the money.

      • ologsinquito profile image

        ologsinquito 

        4 years ago from USA

        I had no idea....We don't order pizza, but this is good to know if we ever ordered something else.

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