Chipotle delivery service doesn't come cheap

Kathy Cherpelis

OMG! CMG [Chipotle Mexican Grill] now delivers right to your door and you can use your new Apple (AAPL) Watch to do it.    

The Mexican fast-casual chain very popular with Millennials is offering delivery service in the 67 U.S. cities where Postmates [a San Francisco-based start-up company] operates. Chipotle made the announcement in its earnings call earlier this week.

For a list of the 67 cities where Chipotle delivery will be available through Postmates click here

Yahoo Finance Columnist Rick Newman says it’s a great idea but the rub is the price for delivery.

“If you can get free delivery of Chipotle It would be a no brainer, but $5 dollar and up based how far away from the outlet you are…this will test how much pricing power Chipotle really has,” according to Newman.

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Meantime, Yahoo Finance Senior Columnist Michael Santoli thinks Chipotle definitely has a shot at making this work. 

“They’ve basically carved out this premium spot in the fast-casual area.  It will work in this limited way,” Santoli adds.  

Chipotle is not alone... Starbucks (SBUX) is also teaming up with Postmates to provide an app-based delivery service in selected cities at the end of this year. 

Taco Bell (YUM) is planning to test a home delivery service this year to meet the demands of millenials. And other chains, such as Burger King which is owned by Tim Hortons  (THI.TO) and Panera (PNRA), are experimenting with delivery in select markets. 

Related:  Taco Bell's home delivery experiment

Related:  Starbucks' yogurt kale smoothie