I don’t disagree.
But they refuse to truly acknowledge that reality when they charge restaurants fees that during these times basically eliminates the restaurants chance of turning a profit. They transfer their debts onto the chefs.
I have no desire to live in a ghost kitchen world
I know a couple of restaurants that had steady business before the pandemic and never needed to use any delivery service. They were thriving on dine in and pickups. Then when the lockdowns happened, they were forced to sign up with the various delivery services just to be able to generate some revenue.
They’re still just limping along hoping to survive but at least they have enough business to pay their employees. They know how much margin they’re losing but it’s either that or not have any revenue coming in at all.
It’s not a sustainable model in the long run especially with landlords unwilling to give a break on leases. The loans are going towards the big costs like that and the business coming in via delivery just covers cost of goods and labor. At least their employees can survive.
I’d imagine that’s the case for many restaurants that have been forced to rely so heavily on these delivery services.
Yes, fundamentally I see it as a monopoly issue. While I understand that these apps may grow the pie to some degree, I believe restauranteurs when they say the commissions charged make staying in business even more difficult, that they siphon off too much.
Haha you just won! Best post I’ve seen in a while.
Interesting
This is not the first time that @butteredwaffles @Ns1 and I have gone round and round on this. (But this is probably the most fruitful discussion. Thank you both. Also @ShadrackToussaint and @tailbacku)
Here is a link to my previous post about OLO hopefully turning the tides on “predatory” third party delivery companies.
This.
Delivery services were just supposed to be incremental revenue. Now that they’re essentially forced to rely on these companies that have the user bases for any business at all when dine in is effectively completely shut down, it’s crazy to expect the high commission fees wouldn’t be detrimental to the bottom line because they don’t have their (previously) primary source of revenue.
The unfortunate thing is that the restaurant raising prices isn’t the simple solution. Unless people are specifically seeking out a particular restaurant, they’re going to be presented with tons of options and let’s be real, they still don’t want to pay a premium for food that comes in a plastic container. That stigma around paying more for delivery is a big challenge to overcome.
Is it possible, though, that the 3rd party apps realized that, if they became the familiar “face” of on-line ordering, that most consumers would eventually “forget” that there’s the “real” restaurant’s website that might offer cheaper prices for the same items or where more of the $ goes directly to the restaurant (and thus funneling the vast majority of customers through the 3rd party).
And why bother using the phone to order directly from the restaurant when you can just use an app that’s on the same phone?
While I wouldn’t say that they are trying to shape consumer demand, I can’t help but think that they are well aware of consumer behaviors and use that to their advantage. Of course, every business “should” try to do that, but, for whatever reason, it just feels particularly gross in this situation. Maybe it doesn’t feel so gross to me in other situations b/c I’m not even aware of it.
A somewhat related point… On other, non-food related websites I peruse (which is heavily $ and business focused), there were some posters (and who knows how representative they are of the general population) that didn’t think mom-and-pop restaurants going under was a big deal. To them, food from cafe A is pretty much the same as the food from cafe B and, since that’s the case, there was no reason to care about restaurants going under since they’re a dime a dozen and easily replaced.
There are laws against unfair competition and abusive labor practices. DoorDash, GrubHub, Uber, and their VC co-conspirators have been ripping off restaurants and their employees, spending capital to operate at a loss in hopes of putting each other out of business, and spent over $200 million in capital to pass Prop. 22 so they could continue misclassifying their employees as independent contractors and pay them even less.
In LA, it’s illegal for third-party delivery services to jack up menu prices.
We haven’t once ordered delivery and always pick up food. We either call for our first preference, but sometimes order online for pickup. Question, some of the restaurants’ websites use Chownow (?) or postmates for pickup option. Are they still docking 20% from the restaurants? That would be pretty shitty considering I’m picking up myself. Many restaurants direct you directly to these platforms instead of a picture of a menu or such.
I’m a little embarrassed to admit I have never ordered delivery, not for personal consumption in any case. Initially, it was due to frugality but with today’s world of delivery, it’s now about making sure as little harm as possible is done to restaurants. I do not have a car, so walking or biking to pick up my food also kills the exercise/move my ass bird with one stone.
But I do order delivery for my mother. She is a retiree who isn’t fluent in English, doesn’t drive and is a luddite. She absolutely doesn’t understand the delivery model we now have–she thinks I’m arranging delivery with the restaurant. Sometimes she harangues me to tell the restauranteur to do this or that as if I’m calling in the order.
I just put in an order for her as I sat down to read this thread. I feel slightly guilty ordering delivery but the service provided for someone like mom, especially during Covid times, is pretty incredible. My mom lives alone and doesn’t drive–an occasional delivered meal is such a treat for her as we near the 1 year Covid slog.
She doesn’t really understand it all–I do not tell her the cost. She knows there’s a tip but doesn’t know about the other charges/fees. Sometimes, I prod her to order more food or higher end food because the fees/tip sometimes outnumber the cost of the food. But you know the immigrant moms, they can’t bring themselves to order a nice meal. I suspect she’s unaware because when she wanted to eat from The Duck House (as a holiday splurge) she refused delivery because TDH takes care of its own delivery and has a $2/mile charge outside of the 5 miles delivery area. She insisted I order pickup and she took the bus to pick it up. I tried to reason with her that the extra $4-6 was no big deal but she could not be moved. I dare not tell her $12 El Pollo Loco dinner tonight had $13 in charges/fees/tip.
Yep, same question. I wonder how much I’m helping restaurants with pickup but ordering through one of the delivery companies.
Also wanted to add, as much as I dislike the hit restaurants are taking from the online delivery companies–the experience they provide is seamless. My experiences are limited to Doordash and the interface and real time notifications are impressive. There’s a cost to all this, whether it’s equivalent to the fees to restaurant and customers is for debate. Clearly from my posts here, I have little knowledge. Is it big tech making money hand over fist, everyone else be damned? Or are customers unwilling to admit we don’t want to shoulder the true cost of delivery so the restaurants have to take the hit?
ChowNow charges a flat rate per month. No fees on individual orders. How delivery works through them I don’t know.
No, they’ve lost billions. See some of the links above.
There is a small credit card processing fee for each order (~3%), but the restaurant would be paying this for dine-in/takeout anyway.
Delivery is available as an add-on for Chownow. Delivery order are fulfilled by DoorDash under DoorDash’s “Small Order Fulfillment” program.
Here is the pricing (Source: POS and Delivery Partners | ChowNow)
Here is the flat monthly fee that restaurants pay for Chownow:
My experiences with ChowNow and restaurants that bypass GH/DD/UE only offer pick up.
But I have ordered pick up via GH/DD and there isn’t a fee for the customer. But is there a fee for the restaurant?
Most delivery services still charge restaurants a fee for pickup orders, with the exception of Chownow. It is essentially a referral fee, and pretty common online practice. Ordering directly is still the best way to support a restaurant.
Agree, but there are restaurants that refuse to take phone orders and direct you to online–and it turns out to be GH/DD, etc.
