Food delivery platforms raising menu prices and squeezing restaurants in India

In food delivery, the opportunity is to rebuild choice—so restaurants aren’t forced to pay to be discovered, and consumers aren’t forced to pay extra for the same meal.

Lately I’ve been thinking about a simple question that doesn’t feel so simple anymore: is food delivery pushing the cost of eating out up for everyone? We don’t order in all the time, but I’ve noticed a pattern that keeps repeating—whether it’s my neighborhood or a vacation spot like Goa.

A restaurant down the road from my house sells a burger for 420 rupees if I walk in. But on a food delivery app, that same burger shows up at almost 20–30% more. I saw the same thing in Goa with a local place I could easily walk to. The menu price jumps by roughly the same margin the moment it’s inside a delivery platform.

What makes it even more concerning is what restaurant owners quietly point to: if they don’t give enough margin to the platform, their listings may not get visibility. In other words, it’s not just “pay a commission and get delivery”—it can become “pay a commission and maybe you’ll even be seen.”

Here’s the core problem. These platforms are logistics companies. They pick up food and deliver it. They’re not responsible for the quality of the food itself, but they’ve built the customer relationship through the app. Once customers are locked into a smooth ordering experience, the app becomes the default place to choose what to eat, compare options, and hit “buy.” That’s powerful—and expensive.

And now, it feels like both sides are getting squeezed. Consumers pay more for the exact same meal they could’ve bought for less directly from the restaurant. Restaurants give up 25–30% (or more once ads and promotions are included) just to keep orders coming. It creates a system where the platform wins by charging for access, while the people cooking the food and the people buying it carry the weight.

You can also see how the market is changing because of this. There are “restaurants” nearby that barely cater to walk-in customers anymore—basically kitchen setups that survive on platform orders. They might have a storefront, but most of their business is driven by the app. The platform becomes the main street, and physical location matters less than rankings, discounts, and visibility.

This is where I start asking: is there a way out? India has historically been a value-focused market. We like convenience, but we don’t like feeling squeezed. We’ve seen similar patterns in taxi aggregation. Uber, Ola, and others have been moving toward prepaid systems—daily passes or vouchers—something closer to a SaaS-like model than a pure margin-taking model.

So what could change on the food delivery side? One idea is unbundling: let consumers order directly from the restaurant, and then separately choose a delivery pickup—almost like selecting a courier after you’ve chosen the food. That would keep the restaurant-customer relationship intact, reduce the need for heavy commissions, and still give people the convenience of delivery.

This could work because most of us don’t randomly choose a new restaurant every time. We tend to rotate through the same few places and the same kinds of food. Even when we experiment, we usually know the restaurant we’re trying. If that restaurant had an easy way to accept direct orders and plug into a delivery network, a lot of customers would happily use it—especially if the price is fair.

The bigger point is this: I don’t want the small guy to get beaten up by big operators just because customers are stuck in one app. Convenience is great, but not at the cost of turning everyday food into a premium product and turning restaurants into ad buyers fighting for visibility. The opportunity is to rebuild choice—so restaurants aren’t forced to pay to be discovered, and consumers aren’t forced to pay extra for the same meal. If we can unbundle ordering and delivery, we might finally get back to what the market has always wanted: value, fairness, and convenience without the squeeze. And fewer of these messy rule breaking electric bikes on the road.

More blogs at https://dsouzaronald.in/

Share this post

Loading...