# To save their local small businesses, people are cutting out delivery apps such as Uber, Grubhub, DoorDash and Lyft



## goneubering (Aug 17, 2017)

https://www.inquirer.com/business/a...ng-out-middlemen-silicon-valley-20200513.html
These apps have proved hugely useful to many restaurants suddenly unable to host diners and switching to delivery models, as well as laid-off workers desperate for work. For companies, the apps make it easier to reach a wide audience and conduct online sales despite the pandemic, and put a staff of delivery workers at their fingertips instantly. But the convenience comes at a cost.

Diners and restaurants owners from across the country have become more aware of the issue during the crisis. Giuseppe Badalamenti, owner of Chicago Pizza Boss and a restaurant consultant, posted a receipt from another restaurant he was working with that showed seemingly exorbitant fees from Chicago-based Grubhub.

What started as $1,042.63 in food sales was reduced to $376.54 after Grubhub fees for delivery, commission, processing and promotions. Grubhub said that restaurants choose what services they add on and that the invoice was an extreme outlier.

"When you take away the diners all you're left with is this predatory, venture capital, third-party app as all of your business," said Badalamenti.

"Thirty percent on the very extreme end barely pays for your food. You still have to keep the lights on, still have to pay for the labor."

Controversy over the gig economy's business models, which provide workers few protections and typically collect 15% to 30% in fees as the middleman, have prompted soul searching by consumers and actions by local governments around the country.


----------



## ANT 7 (Oct 14, 2018)

This is what I suspected will happen on a much larger scale, once the Chinese virus is over. 

A lot of restaurants signed onto these services without doing any analysis. Now that there is no other traffic except delivery, the glaring extortionist costs of these delivery services has captured the attention of restaurant owners, as it's the only active line of the financial statement.


----------



## Mkang14 (Jun 29, 2019)

Small businesses should create 2 different menus. One for delivery apps and one for walkin customers. They can charge a few dollars more per item in the delievery menu. To try and make up the difference.


----------



## KevinJohnson (Mar 23, 2020)

Dear Mr. Restaurant Owner. Put ad in paper: Now Hiring Delivery Drivers. 

Any questions?


----------



## sellkatsell44 (Oct 25, 2015)

KevinJohnson said:


> Dear Mr. Restaurant Owner. Put ad in paper: Now Hiring Delivery Drivers.
> 
> Any questions?


Right and how do you get the customers who didn't hear of your restaurant prior to the food delivery app to know how to call your restaurant to place the order?

Gotta spend money on marketing and drivers.


----------



## KevinJohnson (Mar 23, 2020)

Exactly my point. Adding marketing costs money also. Owner is complaining about all the services he is getting that he did not do for himself.


----------



## NoPool4Me (Apr 16, 2018)

sellkatsell44 said:


> Right and *how do you get the customers who didn't hear of your restaurant prior to the food delivery app* to know how to call your restaurant to place the order?


The current delivery methods are a form of advertisement so that they might open up stronger down the road.

It will take a lot of cost cutting to survive in the meantime... but, might help in the long run. And, some won't make it. This is an era where perhaps, only the strong and well organized will survive. No matter the size.


----------



## Launchpad McQuack (Jan 8, 2019)

Mkang14 said:


> Small businesses should create 2 different menus. One for delivery apps and one for walkin customers. They can charge a few dollars more per item in the delievery menu. To try and make up the difference.


Some of the delivery apps (I have not kept up on all of their individual policies) do not allow the restaurants to charge more for food ordered through the platform vs. through other means. Some restaurants found a loophole in that policy and started providing smaller portions for orders placed through the delivery apps. So a "large" order of fries placed through Uber Eats would contain less fries than if you ordered it directly from the restaurant.


----------



## doyousensehumor (Apr 13, 2015)

Mkang14 said:


> Small businesses should create 2 different menus. One for delivery apps and one for walkin customers. They can charge a few dollars more per item in the delievery menu. To try and make up the difference.


Possibly another option is a "carryout special" or discount. Domino's was doing that for years


----------



## observer (Dec 11, 2014)

sellkatsell44 said:


> Right and how do you get the customers who didn't hear of your restaurant prior to the food delivery app to know how to call your restaurant to place the order?
> 
> Gotta spend money on marketing and drivers.


I tried to order a pizza the other day from a local pizzeria which I found by googling pizza near me.

I called the restaurant and they said that for delivery I had to order through Postmates.

I don't have the Postmates app, or any other food delivery app, so I called another restaurant.

The other restaurant did make deliveries but after getting my order and address they asked for my credit card number. I asked if they took cash, they said no. Just so happened that I had forgotten my wallet at home that morning and didn't have my card with me but did have plenty of cash on me.

No card, no pizza. Two strikes out. I decided I wouldn't eat until I got home.


----------



## sellkatsell44 (Oct 25, 2015)

observer said:


> I tried to order a pizza the other day from a local pizzeria which I found by googling pizza near me.
> 
> I called the restaurant and they said that for delivery I had to order through Postmates.
> 
> ...


Oh that sucks.

I know postmates work with google and so google pay, or DoorDash and uber eats so Apple Pay... even if I don't have card on me :x3:

I am, I have sadly realized, takeout champ.

but I guess that's also a sign?

how did you satisfy your pizza craving?


----------



## observer (Dec 11, 2014)

sellkatsell44 said:


> Oh that sucks.
> 
> I know postmates work with google and so google pay, or DoorDash and uber eats so Apple Pay... even if I don't have card on me :x3:
> 
> ...


 I didn't.

I stopped for tacos on the way home.


----------



## Uberisfuninlv (Mar 22, 2017)

Restaurants should take a stand and up their prices 20%.

Offer a 20% discount if you do:

dine in 
carry out
drive thru
pick it up yourself
use the restaurants delivery service (their own employees)

Also put flyers in the bags when they order from a 3rd party


----------



## eazycc (Apr 5, 2019)

I've noticed that some restaurants, what they do is hand or attach menus or flyers to their app orders that encourage customers to order,_* on their own website, sometimes with discounts or incentives*_. Some offer their own delivery service too. And that's exclusive of any tricks that the apps use like uncharging on random items vs eating in.

But apps like Grubhub et all do offer a good portion of the marketing, and reduces the liability of hiring a delivery driver, and handle the logistics of last mile delivery (that's a big time suck in itself. ) There's a cost to that convenience, and when the bulk of orders are coming via app the cost can be quite large.


----------



## BigBadDriver (Sep 12, 2017)

ANT 7 said:


> A lot of restaurants signed onto these services without doing any analysis.


Incorrect.

The analysis was done by most restaurants (I'm speaking from a NYC point of view). The bar to entry for restaurants in NYC is substantially higher than say, the bar to being an Uber driver. Labor costs AT A MINIMUM are $15 per hour in addition to the highest PSF rental charges in the US.. And for $15 an hour you get burger flipper rejects, the one's currently being replaced by automation. NO ONE operates a NYC restaurant without CONSTANTLY analyzing ALL COSTS. If they do, they are out of business before they are out of the gate.

So why do business thru the apps? For customer convenience. Do you know what the term "loss leader" means? That's what the apps were. At best it's a break-even proposition. This model is sustainable in conjunction with dine-in customers - the same customers who order thru the apps. As a stand-alone model, third-party apps charging 30% in addition to hidden fees is absolutely not sustainable.

Capping the apps was in legislation 6 months before the Wuhan Flu (in NYC). On Thursday the NYC City Council passed legislation capping apps at 20%. This is a move in the right direction, but it stops short of a solution. 10% is reasonable and that's what will happen. The momentum is on.

I don't know you or what market you drive in. Maybe you're lucky and Uber only takes a small percentage from your fares. Did you do your "analysis"? Or are you happy with Uber taking 30%? 40%? 50%? Because that's what they take in NYC.

The tide is turning against the gig app overlords. AirBnB is done. The delivery apps are next. But keep driving for whatever crumbs Uber deigns to throw at you...


----------



## Wolfgang Faust (Aug 2, 2018)

goneubering said:


> https://www.inquirer.com/business/a...ng-out-middlemen-silicon-valley-20200513.html
> These apps have proved hugely useful to many restaurants suddenly unable to host diners and switching to delivery models, as well as laid-off workers desperate for work. For companies, the apps make it easier to reach a wide audience and conduct online sales despite the pandemic, and put a staff of delivery workers at their fingertips instantly. But the convenience comes at a cost.
> 
> Diners and restaurants owners from across the country have become more aware of the issue during the crisis. Giuseppe Badalamenti, owner of Chicago Pizza Boss and a restaurant consultant, posted a receipt from another restaurant he was working with that showed seemingly exorbitant fees from Chicago-based Grubhub.
> ...


https://www.inquirer.com/business/g...-commission-tiffin-philadelphia-20190312.html


----------



## islanddriver (Apr 6, 2018)

Easy 2different menus one for take out and one for eat in and pickup. I know diner's and restaurants that have been doing it for years.


----------



## UberBastid (Oct 1, 2016)

Launchpad McQuack said:


> Some of the delivery apps (I have not kept up on all of their individual policies) do not allow the restaurants to charge more for food ordered through the platform vs. through other means. Some restaurants found a loophole in that policy and started providing smaller portions for orders placed through the delivery apps. So a "large" order of fries placed through Uber Eats would contain less fries than if you ordered it directly from the restaurant.


There may be legal problems associated with that.


----------



## Bob Reynolds (Dec 20, 2014)

The restaurant owners are getting treated the same as the Uber and Lyft drivers. That should tell you everything you need to know.


----------



## NoPool4Me (Apr 16, 2018)

islanddriver said:


> Easy 2different menus one for take out and one for eat in and pickup. I know diner's and restaurants that have been doing it for years.


If I were to order from a restaurant that I'd just seen on an app it's unlikely I'd order again or go for dine in if I got a small order in delivery. For maximum benefit in advertising they should send take out that is the same as dine in. As someone else said... as a loss leader of sorts. Use these temporary deliveries to try and get new customers for the long term.


----------



## Canuckto (Oct 30, 2020)

ANT 7 said:


> This is what I suspected will happen on a much larger scale, once the Chinese virus is over.
> 
> A lot of restaurants signed onto these services without doing any analysis. Now that there is no other traffic except delivery, the glaring extortionist costs of these delivery services has captured the attention of restaurant owners, as it's the only active line of the financial statement.


It is over now. But the media and government pushes the lies.


----------



## Garlifld (10 mo ago)

It is a global problem because of the economy that has been affected in every part of the world. People did not work, had no income, and did not go out of business or use paid services as intensively as before. I know what I'm saying; I have a small business that was basically going to be swallowed up by this pandemic. But thanks to Cost Transformation Service, I decided to create a cost reduction and optimization plan.


----------

