The Truth About Pizza Delivery Fees and Who Gets Them
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 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 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.