Many owner-operators still charge $2.99 delivery no matter distance.
That worked when costs were lower and labor was easier to absorb.
In 2026, distance and time need to be priced on purpose. If not, longer trips quietly turn high-volume days into low-margin days.
This guide gives you a fast delivery-fee calculator that is easy to explain to staff and customers.
Quick Summary
- Start from a per-trip cost floor, not competitor guesswork
- Use IRS mileage rate as your baseline for vehicle cost
- Add driver time, handoff time, and failure buffer
- Convert cost floor into zone fees and minimum order rules
- Recheck every quarter
2026 Baseline Signals
| Signal | Latest reference | Why it matters |
|---|---|---|
| IRS business mileage rate | 72.5 cents/mile (effective Jan 1, 2026) | Your distance cost baseline moved up |
| IRS commuting treatment | Ordinary commute generally not deductible under Pub. 463 | Separate business-trip math from personal commute assumptions |
| Restaurant inflation context | BLS Jan 2026 CPI: food away from home +4.0% YoY | Delivery underpricing is harder to absorb this year |
Delivery Fee Floor Formula
Use this per order:
Delivery fee floor =
(Roundtrip miles x 0.725)
+ (Driver minutes / 60 x Loaded hourly labor)
+ Handoff and packaging cost
+ Failed-delivery bufferIf you process card payment directly, include payment-fee drag in the same model.
Example: Three Delivery Zones
Assume:
- Loaded driver labor:
$22/hour - Handoff + packaging cost:
$0.75 - Failed-delivery buffer:
$0.50
| Zone (one-way) | Roundtrip miles | Mileage cost | Driver time | Time cost | Fee floor |
|---|---|---|---|---|---|
| 0-2 mi | 4 | $2.90 | 12 min | $4.40 | $8.55 |
| 2-4 mi | 8 | $5.80 | 18 min | $6.60 | $13.65 |
| 4-6 mi | 12 | $8.70 | 24 min | $8.80 | $18.75 |
If your market will not accept those fees, you need stronger minimum order rules or smaller service radius.
Minimum Order Formula (When Fee Alone Is Not Enough)
Minimum order floor = Fixed trip cost / Target contribution marginExample:
- Fixed trip cost:
$7.20 - Target contribution margin:
30%
Minimum order floor = 7.20 / 0.30 = $24.00That is why many operators pair zone fees with minimum-order thresholds.
What Operators Keep Reporting
Community posts from food-truck and small catering owners show the same pattern:
- travel and setup are often underpriced,
- long-distance jobs look profitable until final reconciliation,
- owners add distance fees late, after avoidable losses.
Set the rule first, then quote from the rule.
15-Minute Delivery Pricing Audit
- Pull 2 weeks of delivery addresses and order totals
- Calculate average roundtrip miles by zone
- Compute fee floor with current labor and mileage assumptions
- Set or update minimum order by zone
- Train one customer-facing script for distance fees
- Recheck cancellation and redelivery leakage monthly
FAQ
Should I offer free delivery above a threshold?
Only if threshold still protects contribution. “Free” should be a marketing label, not a margin loss.
Is mileage-only pricing enough?
No. Driver time often costs more than miles on urban routes.
What if my zones are too complex for staff?
Use 2-3 zones only. Simple rules outperform perfect but confusing models.
Can I use this for catering drop-offs?
Yes. Add setup and wait-time fields before final quote.
KitchenCost helps you compare delivery, pickup, and dine-in unit economics so pricing decisions match real trip costs.
Related Guides
- US In-House Delivery Fee Pricing Guide
- US Delivery App Pricing Guide
- US Credit Card Processing Fee Pricing Guide
- Grubhub Merchant Fees (2026)