[Stasis5001]

With pizza, your solution can't work. You have to pay the driver base pay, and they get tips on top. So the base pay has to come from the menu price + delivery fee, and if you get rid of the delivery fee, it has to come from the menu price. But if you raise that, you're distorting demand by making in-restaurant purchases more expensive.

[Sacho]

Arent in-restaurant purchases more expensive for the business, considering they need to rent space and employ waiters?

A large percentage of the pizza restaurants that deliver here offer a discount for online purchases, so tgey have essentially done what you describe.

[Symbiote]

Pizza places in the UK typically give a discount for collection from the shop, which presumably accounts for the delivery cost.

It's not expected to tip a delivery person, though some people do.