Olo takes a flat 5% on delivery where DoorDash and Uber Eats charge restaurants up to 30%

An $85 dinner order came back $19.34 cheaper on the new Olo app than on a traditional delivery marketplace, and that was after Olo's fee ⁶. That gap is the business model of DoorDash▼−2.39% — DoorDash, down 2.39 percent today and Uber▼−1.07% — Uber, down 1.07 percent today Eats getting its first inside attack. On October 20, Olo, the restaurant software company that already powers more than 3.5 million orders a day for over 800 restaurant brands across 90,000 locations, launched its own consumer app↗, and its pitch is the menu price you thought was the restaurant's ⁵⁷.

The toll inside every delivery order

Here is the machine Olo is going after. Marketplaces charge restaurants commissions of roughly 15 to 30 percent per delivery order↗, and restaurants claw that back by marking up the menu ⁵.

Olo founder and CEO Noah Glass puts it at 20 to 30 percent, and says customers blame the wrong party ². A survey Olo commissioned found 74 percent of Americans expect delivery fees but only 27 percent expect the chicken itself to cost more on an app ⁷. On Olo's app, menus match in-store prices and the consumer pays one flat 5 percent network fee, plus delivery and tip when delivery applies ²⁵. Glass calls it "second-party ordering": marketplace convenience, direct-channel economics ⁶.

The disruptor hires its rival's drivers

The twist: Olo keeps no couriers. Its Dispatch product, about a decade old, shops third-party fleets such as Grubhub on cost and speed and buys fulfillment per order ¹⁶. Restaurants also keep the customer data, which marketplaces guard ⁵.

The app launched with more than 250 brands↗, Waffle House and Five Guys among them, aimed at 40 million existing Olo account holders ³⁵. Glass says the network has already beaten the chicken-and-egg problem every marketplace dreads ⁶.

What it means for DoorDash's November 4 print

At 250 restaurants the near-term revenue risk to DoorDash is small ⁴⁸. The quarter it reports on November 4 will be judged on the scale that carried second-quarter revenue of $4.45 billion, up 35.6 percent↗ ⁴⁸.

The real question is take-rate erosion over years, not weeks. Walmart▼−0.12% — Walmart, down 0.12 percent today began delivering restaurant orders earlier this year, so markup-free channels are multiplying ¹. Glass's own target, 1 billion orders a year through the app, says the ambition ⁶. Watch whether big brands follow Five Guys, and whether fulfillment pricing falls. Deep dive in below to learn more.