Uber Eats Service Fee vs Tip: Everything you need to know

On Uber Eats and basically most food delivery platforms, there are a number of charges you need to look out for. From the delivery fee to the service fee, and then as a customer, you’re sometimes recommended to tip.

It’s only easy to question these fees, what actually they do, and most importantly, what percentage of them go to the drivers.

Well, this article will take deep dive into this comprehensively.

Understanding How the Service fee works on Uber eats

The service fee is one of the fees you’ll see come up frequently on your checkout page when finalizing an order on Uber eats;

Uber Eats introduced this fee around 2019, after making an official announcement that they’d be splitting their initial booking fee into 3 parts — delivery fee, service fee, and a small order fee for deliveries with a total sum below $10.

Basically, they initiated DoorDash, their rival company, in this move.

According to Uber Eats, the service fee is essentially a charge applied to help cover various operational costs associated with running the platform. In their own term, it goes towards operational costs.

This includes things like app development, customer support, and payment processing, among other expenses.

The amount of the service fee can vary, but it’s generally calculated as a percentage of the order subtotal (before tax and other fees). So, the more you spend on your meal, the higher the service fee will be. In other words, there’s no fixed values, as it varies.

However, you can find the exact amount of the service fee in the order breakdown on the Uber Eats app or website.

Most importantly, keep in mind that the service fee is nowhere related to what drivers earn. The amount drivers earn is independent of these fees. Uber Eats does its personal calculation to determine that.

But is the service fee on Uber Eats a tip?

Unlike popular speculation, the service fee is not the same as tips. They’re two different charges. In the next section, we talk about tips properly.

Understanding How Tips Works on Uber eats

Now, we all know about tipping…

At least in the US, we tip in basically every service-rendering industry from saloons to coffee shops, restaurants, hotels, and the list goes on.

The same idea applies to Uber Eats and most delivery platforms, with a few exceptions.

On Uber Eats, tipping still maintain its major drive— to sort of incentivize delivery and serve as a thank-you note to drivers.

However, unlike what we have in other industries, on Uber Eats customers are required to tip before delivery. The rationale here is to lure drivers to accept customer orders faster.

Unfortunately, this has grown to serve as a supplement to the bad pay company pays drivers per delivery. This is the reason drivers usually look up to tips from customers.

Keep in mind that 100% of the tip goes to drivers. This is in contrast to the service fee we discussed earlier, which goes to Uber Eats to help with operational costs.

Now, how much should you tip?

On the app, you’ll find suggested tip amounts, typically ranging from 10% to 20% of the order total, and there’s also an option to input a custom amount.

If you’re satisfied with the service, it’s customary to lean towards the higher end.

Uber Eats Service fee vs tip: Can you avoid the other?

The biggest difference between service fees and tips is the fact that the service fee goes to the company while tips are for drivers.

However, the reason you’re reading this article is most likely because these fees are just so much and perhaps, you may be looking out for which one to avoid.

For the service fee, it’s mandatory.

In other words, it applies to every order made on the platform, and can’t just be erased.

You can’t do anything about them. As we said earlier, they’re made to cover the operational cost on the platform.

So what about tips?

Well, tips are actually optional on Uber Eats as they’re generally recognized. However, it’s not advisable to not tip.

It’s important to consider the effort put into delivery – from traffic jams to unpredictable weather, and even worst, the bad pay the company pays drivers.

Generally, while it’s at your discretion to tip or not, it’s best to show gratitude for the service received.

You also want to keep in mind that tipping helps your order get accepted faster by drivers.

Final Thoughts