Why Convenience is More Expensive than You Think

It starts with a $12 burrito and ends with a $28 receipt. This raises an important question: Is the convenience of having food delivered to your door worth it financially, especially when it becomes a frequent habit? Services like DoorDash and Uber Eats save time, but at what cost? Some costs stand out right away, while others go unnoticed. The real question is how much we are truly paying once both the seen and unseen costs are considered.

When the pandemic began, the message was clear: stay home and stay safe. Even routine tasks like grocery shopping felt risky, leading many to turn to online delivery. What began as a necessity has, five years later, often solidified into an expensive habit.

The chart below shows the growth of the food delivery industry in major markets from 2018 to 2021, with a sharp increase appearing in the middle of 2020.

 

(Source: McKinsey & Company, 2021)

 

The Hidden Math of Delivery

As delivery services have grown, many restaurants have raised their app-listed prices to offset the 15–30% commissions charged by third-party platforms. Consequently, you often pay a “hidden” premium on the food itself before the fees even begin. Many restaurants have raised the prices of items listed on delivery apps to offset the additional costs of using third-party platforms. As a result, customers often end up paying more for the same food when it is delivered than they would if they ordered directly from the restaurant¹.

A typical delivery order is comprised of four main costs:

1. Menu Markups: The premium price listed on the app vs. in-store.
2. Delivery Fees: The charge for transportation, which often surges during peak hours.
3. Service Fees: The platform’s operating margin, usually a percentage of the total.
4. Driver Tips: A vital 10–20% that goes directly to the person at your door.

 

When totaled, a $25 meal frequently transforms into a $35+ expense². While the convenience is undeniable, the “sneaky” nature of these incremental charges can quietly turn a simple dinner into a financial splurge.

Below you can see a graph that shows a detailed breakdown of what goes into the cost of a food delivery order.

(Source: McKinsey & Company 2021)

 

The Path to Mindful Spending: Turning Habit Back into Treat

At Alaska Wealth Advisors, we often talk about Financial Harmony, ensuring your spending aligns with your long-term vision. Avoiding the “convenience trap” isn’t about deprivation; it’s about reclaiming control over your cash flow.

Here are a few strategies to help you navigate the convenience economy more intentionally:

• The “Call Direct” Rule: Many local restaurants prefer you order directly through their own website or by phone. This often avoids menu markups and ensures a larger portion of your money stays with the local business owner.
• The “Pick-Up” Ritual: Use the drive to the restaurant as a moment to decompress or listen to a favorite podcast. By picking up the food yourself, you save the delivery and service fees, often enough to pay for your next meal entirely.
• Batch Your Convenience: If you know you have a high-intensity week ahead at the office, plan for one specific “Delivery Night” as a reward. By scheduling it, you transform it from a mindless default into an “elevated experience” you actually enjoy.
• The 24-Hour Review: Before hitting “Place Order,” look at the final total and ask: “Is the 20 minutes I’m saving worth the $15 premium I’m paying?” Often, that moment of pause is all it takes to realize you’d rather put that $15 toward your next Kenai getaway or your retirement catch-up contributions.

 

The Benefit of Intentionality

When we choose to avoid the automatic habit of delivery, we aren’t just saving dollars; we are practicing disciplined awareness. Every $15 saved on fees is $15 that can be redirected toward your “Future Self.” Over a year, swapping just one weekly delivery for a home-cooked meal or a self-pickup can save over $750, enough to fund a significant portion of a Roth IRA contribution or a special family memory.

Convenience is a tool. When used mindfully, it adds value to our lives. But when it becomes an unexamined habit, it can hinder our progress toward the vibrant financial future we are working so hard to build.

 

Rama Dandekar
Associate Financial Advisor

 

Alaska Wealth Advisors, LLC is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Alaska Wealth Advisors’ investment advisory services can be found in its Form ADV Part 2 and/or Form CRS, both of which are available upon request.

¹Pourrahmani, Elham, et al. “Modeling the Online Food Delivery Pricing and Waiting Time: Evidence from Davis, Sacramento, and San Francisco.” Transportation Research Interdisciplinary Perspectives, vol. 21, 1 Sept. 2023, p. 100891, www.sciencedirect.com/science/article/pii/S2590198223001380, https://doi.org/10.1016/j.trip.2023.100891.

²Ahuja, Kabir, et al. “Ordering In: The Rapid Evolution of Food Delivery.” McKinsey & Company, 22 Sept. 2021, www.mckinsey.com/industries/technology-media-and-telecommunications/our-insights/ordering-in-the-rapid-evolution-of-food-delivery.