Delivery Apps Aren’t Getting Any Better

…Even if these apps aren’t charging for bogus calls, restaurants still need to contend with the huge chunk that these services take out of their bottom line. According to Chris Webb, CEO of ChowNow, some apps are charging as much as 50 cents per dollar ordered. Most hover between 15 to 30 percent per order. Seamless introduces a pay-to-play system — it allows restaurants to choose between four commission levels, but promises higher search results if restaurants choose a higher commission percentage. If a majority of a restaurant’s orders are take-out or delivery, those become incredibly tight margins to work with, especially when even take-out orders are routed through Grubhub phone numbers, allowing them to collect commission. When Gaslamp Cafe in San Francisco closed in February, it explicitly blamed delivery apps for its shuttering, and implored customers to go to the restaurants themselves, or at least call directly if they wanted take-out. “Ordering online does more damage to businesses than it helps,” they wrote in a sign after their closing. “Any profit from sale is stripped away by the fees they charge the restaurant, which leaves only enough to cover the cost of food.”

Taking on these delivery services requires major adjustments in terms of operations, pricing, and expectations. But even restaurants who don’t sign up for these apps have to get in on the fight, since some say they’re appearing on delivery sites without their permission. Canadian restaurants have been fighting Doordash, which says they add restaurants in high demand for a “trial period,” sometimes without contacting the restaurant first, but emphasizing “we’ll always attempt to get in touch.” This leads to customers thinking they can get delivery from restaurants that don’t offer it, and sometimes leaving negative reviews over something a restaurant never promised. In the U.S., Postmates is creating the same problem by sometimes not getting permission from restaurants before making their food available for delivery. Restaurant owners then can’t guarantee their food will be handled properly, and if customers aren’t happy with the quality, they blame the restaurant, not Postmates.

Overall there’s a lack of communication between these middleman apps and the restaurants, as apps focus on building their own profiles. One former employee of a major online delivery app anonymously told Eater that it takes the app days to respond to complaints about orders, and that it was difficult for restaurants to update their profiles to reflect new hours or closures, which could lead to restaurant fines if an order came in and they happened to be closed. “Our system was never set up to be easy for the restaurant; all the investments went toward consumer ends,” they said.

These issues are all exacerbated by the desperate attempt to snag loyal customers by any means necessary — low prices, no fees, free meals. Uber Eats still isn’t profitable, which has resulted in the recent slash in pricing. “Inevitably, Eats and its competitors, which all have similar offerings, will have to stop swallowing their losses and start charging more,” writes Recode. “And when they do, success will depend on which company has the most customers and restaurant partners.”


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