Price fairness in the online food delivery industry: a structural equation model of consumer perceptions

Abstract

ABSTRACT There exist concerns about the fairness of the revenue share model between food service establishments and delivery companies, which often charge a commission rate of 20–30%. As the third party in the multi-sided market, the perception of food consumers may have bearing on potential market and policy solutions. With 500 survey responses from English food consumers, we inform perceptions of interactional, procedural, distributional, and overall price fairness in the online food order and delivery industry. On average, there is a 5% difference in perceptions of the actual commission rate (20%) and a fair commission rate (15%). Per the results of a structural equation model, procedural fairness and distributional fairness respectively have negative and positive relationships to overall price fairness. Interactional fairness is not related significantly to overall price fairness.