On-demand delivery apps have fundamentally transformed the sales landscape for small businesses, creating both unprecedented opportunities and significant challenges. The impact varies dramatically depending on how businesses leverage these platforms strategically.
The Scale of the Digital Shift
The market has undergone explosive growth that directly affects small business operations. The global online food delivery market reached an estimated $288.84 billion in 2024 and is projected to reach $505.50 billion by 2030. Uber Eats alone generated $13.7 billion in revenue in 2024, marking a 13.2% year-on-year increase. This expansion reflects a profound change in consumer behavior, with delivery sales growing at more than three times the rate of on-premises revenue. For small businesses, this shift has made delivery services virtually essential rather than optional.
Expanded Market Reach and Customer Acquisition
The most compelling advantage of on-demand delivery apps for small businesses is access to massive customer bases. These platforms provide exposure to millions of users who might never discover a restaurant or retail business otherwise. Third-party delivery services have been found to raise restaurant sales volume by 10 to 20%, and 60% of restaurant operators report that offering delivery has generated incremental sales. For businesses opening new locations or launching ghost kitchens, these platforms provide immediate access to market without requiring independent customer acquisition investments.
The visibility benefit extends beyond geography. Delivery apps function as built-in marketing channels, eliminating the need for businesses to spend heavily on digital advertising to reach local customers. This is particularly valuable for younger and smaller independent restaurants that lack established brand recognition.
The Commission Fee Challenge
The hidden cost structure of delivery platforms represents the most contentious aspect of this transformation. Commission fees range from 12% to 35% per order, with platforms like Uber Eats charging up to 35% plus additional fees. Most restaurants operate on profit margins of 50% or less, meaning that a 20-30% commission significantly reduces earnings on each delivery order. Small business owners report paying approximately 31% in fees for Uber Eats and 22% for Grubhub and DoorDash, despite recognizing the services’ value for business growth.
This fee structure creates a paradox: while delivery orders increase sales volume, the financial benefits are often outweighed by platform charges. For sectors like pizza restaurants that historically relied on delivery before apps existed, the impact has been particularly acute, with some pizza restaurants counting on deliveries for as much as 75% of their business.
Loss of Customer Control and Relationships
A critical but often underestimated consequence is the loss of direct customer relationships. Delivery apps retain all customer data and prevent direct marketing opportunities that could build long-term loyalty. When customers order through these platforms, the business never learns their contact information for future marketing, email campaigns, or loyalty programs. The app controls the customer relationship entirely, reducing opportunities for repeat business through direct channels. Additionally, customers who use these platforms typically shop for deals rather than specific restaurants, leading to low brand loyalty.
Operational and Competitive Pressures
Delivery platforms have fundamentally restructured how small businesses operate. Restaurants must redesign physical spaces to accommodate delivery driver pickup areas, invest in tablet systems for order management, and potentially face penalties if they don’t maintain adequate inventory for delivery orders. Many establishments report losing control over pricing, as apps adjust menu prices without consulting restaurants, directly impacting customer relationships and brand positioning.
The competitive dynamic has shifted dramatically. When delivery platforms enter a market, they intensify competition at scale, making survival harder for smaller establishments. Younger and smaller independent restaurants struggle more, as familiarity and consumer trust play crucial roles in delivery platform visibility. Some platforms employ pay-to-play visibility models, where only restaurants paying premium advertising fees receive prime placement.
Emerging Solutions and Strategic Alternatives
Recognizing these challenges, small businesses increasingly adopt hybrid strategies. Building branded online ordering systems allows restaurants to keep 100% of revenue from direct orders, own customer data, and maintain control over pricing and customer experience. Many successful restaurants now use delivery apps primarily as a customer acquisition channel—accepting lower margins on app orders to capture first-time customers—then converting those customers to direct ordering through loyalty programs, email marketing, and exclusive promotions.
The emergence of ghost kitchens (cloud kitchens or dark kitchens) represents another transformative trend. These delivery-only facilities eliminate the overhead of traditional dining spaces, reducing rent, utilities, and front-of-house staffing costs. The ghost kitchen market was valued at over $40 billion in 2022 and is expected to continue growing exponentially. This model allows small operators and established chains to test new concepts with minimal investment while maintaining higher profit margins than traditional restaurants using third-party delivery.
Regulatory Changes and Future Outlook
The regulatory landscape is shifting in response to concerns about excessive fees. Several major U.S. cities, including San Francisco and New York City, have capped delivery app commissions at 15% for delivery services, with additional limitations on advertising fees. Multiple countries are implementing new standards: China recently introduced national standards to curb excessive platform fees and aggressive sales tactics, while lawmakers in South Korea are pushing fee caps with penalties up to 10% of annual sales for violations.
These regulatory changes signal a structural shift in the industry. Delivery platforms are increasingly investing in value-added services for restaurants rather than relying solely on high commission rates. This trend toward lower-fee service models may improve profitability for small businesses using these platforms.
Strategic Implications for Small Business
Small business owners should recognize that on-demand delivery apps represent a double-edged sword. The platforms offer unmatched customer reach and marketing visibility, making them essential for new customer acquisition. However, relying heavily on these platforms without developing direct customer channels can erode profitability and business autonomy. The most successful small businesses increasingly employ a balanced approach: using delivery apps strategically as customer acquisition tools while systematically converting those customers to direct ordering channels where margins are significantly higher. Investing in branded online ordering systems, loyalty programs, and customer data ownership creates sustainable competitive advantages that reduce dependence on platform commissions and rebuild the direct customer relationships that form the foundation of long-term business success.