WASHINGTON (June 25, 2026) — A new report from the Progressive Policy Institute (PPI) explains the supply-and-demand dynamics behind the “three-sided markets” that power online food delivery and finds that Americans are spending far less time traveling to and from restaurants and bars, a shift driven in large part by the ease of delivery. The report cautions that a growing wave of state and local regulations could disrupt these markets, which benefit consumers, merchants, and delivery workers alike.
The report, “A Tale Of A Three-Sided Market: Understanding Online Food Delivery Services,” explains how platforms such as DoorDash, Uber Eats, and Instacart coordinate near-simultaneous transactions among three groups: merchants, delivery workers, and consumers, and why poorly calibrated rules on fees and pay risk hurting all three.
Drawing on Bureau of Labor Statistics time-use data, the authors estimate that Americans spent about 35.3 hours per person traveling to and from “eating and drinking” in 2023-24, down 16% from 42.1 hours before the pandemic. That adds up to roughly 2 billion fewer hours a year, reduced travel time, the report estimates, is worth about $46 billion at $25 per hour, a figure that does not even include the value of delivering items like groceries and prescriptions.
The “eating and drinking” industry appears to have prospered in the era of online food delivery. After dropping sharply during the pandemic, employment at restaurants and bars has recovered to about 11.4 million, close to an all-time high, while the number of U.S. eating and drinking establishments has climbed almost 10% from 2019 to roughly 670,000. Over the same period, DoorDash’s global orders rose from 263 million in 2019 to nearly 3.2 billion in 2025.
The authors argue that delivery fees, often criticized as “junk fees,” generally do not meet the definition. Junk fees are typically hidden, poorly explained, or unavoidable, the report notes, whereas major platforms usually disclose delivery and service fees early in the ordering process and explain what they cover.
The report points to Seattle as a cautionary case. After the city’s “PayUp” pay floor took effect in early 2024, platforms raised consumer fees to cover higher wages, and DoorDash reported that orders fell, wait times grew, and average hourly driver earnings dropped more than 20% from a year earlier.
“For consumers, time is money, and these platforms are saving people billions of hours a year,” said Michael Mandel, Vice President and Chief Economist at PPI. “Three-sided markets work because supply and demand stay in balance across all three sides. When price controls knock that balance out, everyone loses; consumers, merchants, and drivers alike.”
“Fees aren’t a glitch in these markets. They’re the mechanism that keeps drivers available and orders moving,” said Andrew Fung, Senior Economic and Technology Policy Analyst at PPI. “Policymakers who want to help workers and consumers should be careful not to disrupt the dynamics that make these benefits possible in the first place.”
The report urges policymakers weighing new rules on delivery commissions, consumer fees, or driver pay to be cautious before disrupting markets that now provide benefits to so many, accounting not only for what each group gains, but also for the pricing flexibility that has kept these markets stable and growing.
Read and download the report here.
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Media Contact: Ian O’Keefe – iokeefe@ppionline.org
