I don't mind paying a delivery fee or tipping the driver. I do however take issue with pretending that there is no delivery fee despite that clearly being an outright lie. Not that I'm overly inclined to do so (at the current fees), but it also makes it nearly impossible to compare pricing & shop around -- because you aren't going to see the actual delivery fee ("service fee") on a "Free Delivery" order until you're at the very end of the checkout/confirmation process.
It's obviously not very ethical, though it's unclear to me if it's illegal or not. It probably should be illegal though, and they should have to declare "cost = $0 delivery + XX% service charge" or similar IMO.