How Third-Party Delivery Regulations Are Impacting Restaurant Operations

Over the past few years, food delivery has gone from being a convenience to a cornerstone of the restaurant industry. Platforms like Uber Eats, DoorDash, and Grubhub helped keep doors open during the pandemic, and even today, delivery remains a critical revenue stream for food establishments. But with growth has come growing pains. 

Fast-forward to today, and these same platforms are in the headlines for lawsuits, fee disputes, and worker pay controversies. Uber Eats, for example, has faced multiple lawsuits around delivery worker wages and transparency in tipping. In response, cities like New York and Los Angeles have introduced regulations for third-party delivery platforms. While these laws aim to protect customers and workers, they also create ripple effects that land squarely on the shoulders of operators, particularly with labor costs, tip management, and scheduling.

Let’s break down what’s happening, why it matters, and how restaurants, QSRs, and cafés can stay agile.

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Real World Markups & Fee Surprises

When delivery apps were thrust into the spotlight during the pandemic, many operators welcomed the revenue boost. But now, evidence shows that convenience comes at the cost of customer trust, brand equity, and repurchase intent.

Let’s explore some real-world examples of how delivery apps have been impacting restaurants: 

• In Seattle, DoorDash implemented a “Seattle regulatory response fee” of around $4.99 on orders, causing a simple $9.80 burger and shake to jump to nearly $20 at the point of ordering. This resulted in a 65% drop in delivery volume for local restaurant Spice Waala.
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• A Federal Trade Commission case accused Grubhub of bait-and-switch tactics such as advertising low delivery prices, only to tack on additional “service” or “small order” fees late in checkout. The app ultimately settled, agreeing to clarify fee breakdowns.
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• Elli’s Great American Restaurant in Salinas, CA, shows carne asada fries listed at $15.99 and skirt steak from $31.99 in-store. However, DoorDash priced these dishes at $19.19 and $38.39, respectively. This is a 20% markup before fees or tip. Operators feel they are walking a tightrope: raising prices enough to stay afloat, but not so much that they turn away customers. 
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• A national analysis of McDonald’s orders found that the average in-restaurant cost, approximately $37, increased to $62-63 through DoorDash, Uber Eats, or Grubhub — a makeup of 65-71%. The app with the highest pricing? DoorDash, at about 71% above McDonald’s menu price. 
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• According to a study of national chains, delivery orders cost an average of 80% to 105% more than in-person pickup. Certain chains like Chick-fil-A saw delivery orders nearly double the menu price:
  
  • Postmates: 105% higher
  • DoorDash: 95% higher
  • Grubhub: 93% higher
  • Uber Eats: 80% higher
• A recent survey found that 58% of diners prefer ordering directly from a restaurant due to customization, convenience, and loyalty perks. Many customers said that lower costs and transparent pricing motivate that choice. 

These real-world scenarios highlight a clear trend: delivery apps can drastically inflate prices, squeeze margins, and frustrate customers.

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Rising Regulation and Platform Pushback

As cities respond to growing complaints from both diners and delivery workers, local governments are introducing rules to rein in platform fees and improve transparency. While these regulations are aimed at protecting customers and drivers, they also ripple through restaurant operations in unexpected ways. Operators are suddenly facing a patchwork of rules, caps, and reporting requirements.

Examples of Cities Fighting Back:

• New York City capped delivery commissions at 15%, plus up to 5% for promotions. Despite this cap, platforms are pushing to expand "enhanced services" fees, which could raise the total to 43% per order.
• DoorDash, Grubhub, and Uber Eats are suing NYC to overturn the cap, calling it “unconstitutional overreach” that will hurt both restaurants and drivers.
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These examples highlight a growing tension: operators are watching their margins shrink while diners face confusing markups and hidden fees — often blaming the restaurant instead of the app. As regulations tighten and platforms push costs onto restaurants and customers, operators need to reevaluate delivery strategies, manage margins proactively, and leverage tools that provide real-time visibility into fees and orders.

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The Ripple Effect on Restaurants

1. Labor Costs Are Getting Tighter

When delivery apps raise prices or restructure new fees to cover new regulations, the extra cost often trickles back to restaurants. For operators already managing razor-thin margins, that means less room to absorb rising wages, overtime, or seasonal staff costs.‍

What this means for you: Staying on top of labor costs is more important than ever. Having visibility into your actual vs. forecasted labor spend can help you make smarter staffing decisions when delivery demand spikes. 

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2. Rising Delivery Fees and Tip Perception

Delivery orders often include service fees and tips. But here’s the catch: customers often don’t know how much of that tip actually goes to the driver, or how much of the fee is kept by the platform. This lack of transparency has led to lawsuits and stricter regulations aimed at platforms like Uber Eats, DoorDash, and Grubhub.

While restaurants don’t manage or distribute tips for third-party drivers, these changes still affect operators indirectly. Higher service fees and delivery charges can make your menu look less competitive on the app, and customers frustrated with fees might spend less or blame your restaurant for costs you don’t control.

‍What this means for you: Be transparent about pricing on your own channels so guests understand the difference between direct and third-party ordering. Encourage direct ordering when possible to build stronger relationships and keep more of the revenue. Use insights from your POS and scheduling systems to adjust labor in response to delivery trends so that those orders remain profitable even as costs fluctuate.

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3. Scheduling Is Harder To Predict

Third-party delivery can create unpredictable demand surges. Friday nights might bring in a rush of takeout orders, while rainy afternoons could trigger a wave of delivery requests. Balancing your front-of-house, kitchen staff, and delivery fulfillment is no small task. 

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What this means for you: Smarter scheduling tools can make a world of difference. Push’s scheduler, for example, uses historical sales data and even weather forecasts to help you predict demand more accurately. That way, you’re not stuck overstaffed during a lull or scrambling for help when delivery orders spike. 
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4. Indirect Compliance Risks and Rising Costs

While restaurants aren’t directly liable for how delivery apps classify or pay their drivers, these lawsuits and new regulations often trickle down to operators. When platforms like Uber Eats or DoorDash face increased labor costs or fines, they frequently pass those costs along, either through higher commission fees for restaurants or service fees that frustrate customers.

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What this means for you: Even though you’re not legally on the hook, staying informed is critical. Monitoring your delivery costs and maintaining accurate reporting on commissions and fees helps you understand how these changes are impacting your margins. Tools like Push can centralize labor and cost data, giving you a clear picture of how delivery partnerships affect your bottom line, so you can make smarter, data-driven decisions about which platforms to keep or drop.

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Don’t Forget the Guest Experience

Regulations may be focused on fees and worker pay, but there’s another stakeholder to consider: your guests.

If delivery quality slips — late arrivals, cold food, missing items — it’s your brand that takes the hit, even if the issue stems from the app. Research shows that negative delivery experiences can reduce repeat business, and customers often blame the restaurant, not the platform. 

That’s why it’s important to treat delivery like an extension of your dining room. Every order should reflect the same care and quality as if the guest were sitting at your table.

Simple steps like:

• Using clear, tamper-proof packaging and labels to prevent mix-ups.
• Training staff on how to prep delivery orders for maximum freshness and accuracy.
• Regularly monitoring online reviews and addressing complaints quickly to protect your reputation.
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Balancing in-house and off-premise service is no easy feat, but it’s critical for customer loyalty.

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How Operators Can Stay Ahead

The good news? While regulations add complexity, operators can stay agile with the right systems in place.

Here are a few tips:

• Stay informed on local laws: Regulations vary by city, so know the rules where you operate.
• Audit your payroll & tip tracking: Ensure compliance with FLSA requirements and local tip transparency laws.
• Use labor forecasting tools: Align staffing with both dine-in and delivery demand.
• Train managers to adapt quickly: They’re the bridge between compliance requirements and daily operations.
• Protect guest experience: Treat delivery orders with the same quality standards as in-house service.
• Leverage cloud-based systems: Solutions like Push centralize scheduling, payroll, and compliance so operators can pivot quickly as new rules roll out.
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That’s where a cloud-based solution like Push can help. With integrated scheduling, payroll, and tip management tools, operators can adapt quickly to changing regulations without getting buried in spreadsheets.

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Final Thoughts on the Impact of Third-Party Delivery Apps

Third-party delivery isn’t going anywhere. If anything, it’s becoming more regulated and more ingrained in how customers choose to dine. Additionally, demand will keep growing as consumers prioritize convenience. But with new regulations reshaping how delivery apps operate, restaurants need to be ready for the ripple effects on labor and payroll. Labor management and payroll compliance are no longer back-office tasks, they’re central to staying competitive in the dynamic landscape.

By monitoring regulations, protecting staff, and streamlining operations with the right tools, operators can not only stay compliant but also deliver a consistent guest experience, whether customers are at the counter or on their couch.

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Ready to Stay Ahead of Delivery Regulations?

As regulations continue to evolve, restaurant operators who take a proactive approach will have the advantage. That’s where Push comes in.

Our all-in-one, cloud-based platform helps restaurants, QSRs, and cafés:

• Track and distribute tips accurately to stay compliant.
• Automate scheduling and payroll so labor costs don’t spiral.
• Monitor compliance in real time across all locations.
• Give operators the flexibility to pivot quickly when new rules roll out.
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Want to see how Push can simplify compliance and labor management for your restaurant? Book a demo today and discover how you can save time, reduce stress, and keep your business running smoothly, no matter what regulations come next.

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