Third-party delivery commissions are rising. If you run a restaurant, you already know this. But how well do you understand the numbers underneath these rising prices? And do your customers understand exactly why they’re paying such inflated prices for your food every time they order with a third-party delivery service like DoorDash, Grubhub, or Uber Eats?
A recent proposal from the Federal Trade Commission (FTC) suggests there may be a lot we don’t know about these rising delivery fees. The FTC is the agency responsible for protecting consumers from abusive practices by commercial entities. In April, the FTC began investigating “Unfair and Deceptive Fee Practices in Online Food and Grocery Delivery Services.”
The goal of this investigation is to determine whether or not consumers are paying hidden food-delivery fees, and if so, how new food delivery app regulations might improve transparency. We are currently in the earliest stages of the rulemaking process. Turning a proposal into a new set of food delivery app regulations can take months or years, if it happens at all.
With that in mind, we wanted to understand:
- What this new FTC proposal is all about
- How the new rules might affect restaurant delivery commission fees
- What’s at stake for your restaurant
But first, let’s take a closer look at the delivery market and the issue of third-party delivery fees.
The Delivery Market Is Growing and So Are Delivery Fees
Online delivery has become a huge part of the restaurant business. A recent Toast survey of 850 adults offers some eye-opening stats:
- Roughly 40% of respondents use delivery apps or order takeout 3 to 5 times a month.
- An overwhelming majority of respondents – 75% – say they order takeout more often than (or as often as) they dine in.
- Younger consumers, those between ages 25-34, use food delivery apps most frequently, with 20% saying they order online 6-10 times a month.
Off-premises dining is a huge chunk of our business today, and it’s only growing. But that’s not all that’s growing. So are delivery fees. Some of the major third-party services may be charging you commission fees that are as much as 15 to 30% of the total order value for every delivery.
Not only are these fees crushing margins, but they may also be scaring consumers away. According to Toast, 40% of survey respondents say the most frustrating thing about third-party delivery apps is the significant upcharge on regular menu prices.
Uncovering Hidden Delivery Fees
These fees aren’t just rising. They’re also getting harder to understand. Third-party delivery services use a pretty complicated formula to calculate these fees.
This formula usually includes “service fees” and “delivery fees,” both of which can vary based on factors like:
- Location
- Distance
- Driver availability
- Current demand
Not only is the math behind all of this pretty complicated, but your customers don’t see any of these numbers until they get to checkout. As this article from CNBC points out, your online customer might fill a shopping cart with $15 worth of menu items. They won’t see the additional $10 in service and delivery fees until they’re checking out.
Suddenly, your customers are paying $25 for $15 worth of food.
Are these pricing strategies deceptive? And should third-party delivery services be required to display these fees with more clarity and transparency?
These are the questions that the FTC is attempting to answer right now.
What the FTC’s Rulemaking Proposal Is All About
On April 15, 2026, the FTC issued something called an Advanced Notice of Proposed Rulemaking (ANPR). This is the first step in the rulemaking process. The goal of this ANPR is “to address certain unfair or deceptive acts or practices relating to fees and charges for food and grocery items ordered through online delivery platforms.”
In an FTC request for public input on the proposal, Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection, explains, “The Commission’s enforcement track record suggests that consumers continue to face a suite of fees that prevent them from making informed comparisons.”
In other words, delivery services have a proven history of engaging in deceptive pricing, and the FTC has taken legal action to punish these businesses in the past. The main purpose of the new rule proposal is to find out if more rules are needed to “prevent persons, entities, and organizations from engaging in such unfair or deceptive acts or practices.”
Public Input on Unfair and Deceptive Food Delivery Fees
The April 15 proposal initiated a one-month comment period, where interested parties were invited to submit comment letters with data, evidence, analysis, and arguments related to hidden food-delivery fees.
In their request for public comments, the FTC shared the following prompt:
Consider the food delivery platforms and apps you use. Do they clearly display the total price of the items you order? Do they clearly disclose what fees, charges, or other costs you’ll have to pay, and tell you when they use variable or personalized pricing? Do they tell you if prices are higher online than they are in the store? Let us know.
The comment period closed on May 18, 2026. The FTC is currently reviewing comments for consideration and inclusion in a final set of rules. (If you missed the first comment deadline, don’t worry. You’ll get another chance to submit feedback once an initial rule proposal is published.)
How New Rulemaking Might Affect Restaurant Delivery Commission Fees
To be clear, even the most ambitious set of rules is unlikely to have any direct impact on the cost of third-party delivery commissions. The FTC is not proposing to place limits on what delivery services can charge. Instead, the goal is to eliminate hidden food-delivery fees. The most robust outcome would be designed to ensure that consumers know exactly what they’re paying for and your customers know all their options.
Consumer Reports submitted a comment letter, recommending new transparency requirements for food delivery apps. Here’s a quick look at what Consumer Reports hopes to see included in the new set of rules.
- Advanced estimates for delivery service costs: Provide a clear, easy-to-understand estimate of the service fees customers will pay before they begin building their order.
- Running total: Display an actual “all-in cost” for customer orders that includes all mandatory fees, throughout the ordering process.
- Clearly itemized mandatory fees: Use standardized terminology to identify all the individual fees that are used to calculate commission totals.
- Online vs. in-store price differences: Display each food item with both the in-store price and the price customers pay when ordering online.
- Alternative channels: Inform customers of additional ordering options, including other first-party and third-party providers, at the beginning of the shopping process.
Of course, these are just the recommendations of one group. We’ll have to wait to find out if any of these ideas are included in the final set of rules. But it does seem like some combination of these rules would help improve the delivery landscape for consumers and restaurant operators.
Subscribe to Our Weekly Back of House Newsletter
Short and sweet summaries for busy restaurant operators. Subscribe to the Back of House newsletter to get updates delivered straight to your inbox.
What’s at Stake for Your Restaurant
Here are a few ways we see these rules helping your restaurant.
- Better comparison shopping: More price transparency gives consumers a chance to compare delivery service prices. Ideally, this visibility would force big third-party apps to compete for customers with better pricing.
- More competitive business landscape: With better comparison shopping, restaurants can incentivize customers to use first-party delivery services that simultaneously offer better customer pricing and better restaurant profit margins.
- Improved dine-in traffic: Displaying dine-in prices may encourage a portion of customers to visit the restaurant instead of paying high delivery charges.
- Total disclosure of hidden fees: Consumers can see at every step of the way how much they’re paying and what they’re paying for. This gives your customers the power to make better-informed decisions about how they order your food.
The last of these benefits might be the most important. That’s because no matter how you slice it, your menu items cost a lot more when customers buy them through third-party delivery services. By requiring these services to display and itemize any added charges upfront, the new rules would help restaurants explain the higher prices to their customers.
What Comes Next for the FTC
The FTC has a specific procedure for turning a rule proposal into a new set of rules:
- Notice of proposed rulemaking (NPR): The FTC will post a proposed set or rules on its public website. This will be your second chance to send in a comment letter with feedback about the initial set of rules. Interested parties can also request informal hearings with the FTC during this time to share feedback.
- Final rules: After reviewing and hearing feedback, the FTC will publish a revised set of rules in the Federal Register. The rules typically take effect 30 days after publication.
- Judicial review: Parties that disagree with parts, or all, of the final rule can argue their views in the courts.
There is no specific timeline for these steps just yet, but rulemaking can take months or years to complete. Legal challenges during the judicial review stage can make the process take even longer.
What Your Restaurant Can Do Right Now To Offset High Fees
Obviously, we have no way of knowing what the final rules will look like nor how impactful they will actually be. And once again, no matter how they turn out, the new rules won’t directly lower third-party delivery commissions.
So we wouldn’t necessarily recommend a wait-and-see approach with the new set of rules. It’s really about taking action now. Here are a few ways you can do that:
- Negotiate with your providers: Believe it or not, those high third-party delivery commissions may be negotiable, especially if you do a higher volume of business. Don’t be afraid to reach out to these third-party services to discuss the possibility of lowering your fees.
- Offer first party or hybrid delivery options: Promote your alternative delivery channels like vGrubs or ChowNow and reward customers with loyalty points, discounts and exclusive offers for using your preferred delivery service (the one that offers you the best profit margins).
- Create a delivery-specific menu: Feature items that travel well, have higher profit margins, and are popular enough to continue selling even at a higher price.
- Make the most of your customer data: One big advantage of using first party or hybrid delivery (as opposed to third-party delivery) is that you get direct access to your customer data. Make sure you use this data to create targeted marketing and outreach with a focus on your preferred delivery channels.
Implementing Your Own Delivery Service
We are hopeful that a new set of rules would help to create a more transparent and competitive delivery landscape — one where consumers feel they have more choices, and where restaurants have more control over their delivery operations and profit margins.
In the meantime, it’s really up to you as a business owner to take the initiative. There are all kinds of restaurant tech solutions that can help you take more control and provide more value to your customers. But the right set of solutions is different for every restaurant.
Schedule your free, personalized consultation with one of our in-house restaurant tech pros and we’ll work together to figure out exactly what you need.
