- A week after Waitr announced new terms for its partners that include a performance-based rate structure, roughly 20 restaurant owners are planning to boycott the delivery company, according to The Advocate.
- Waitr plans to take higher commissions for restaurants that have a smaller volume of sales and a lower commission for those with larger volumes. Specifically, if food sales from the Waitr app exceed $20,000 per month, restaurants will be charged a 15% commission for every transaction. Those with monthly food sales at or below $1,000 will be charged the 25% cap for commission.
- Many of the restaurants that plan to protest this weekend have been with Waitr since its 2015 launch.
Waitr’s fee structure change could end close relationships it’s had with restaurants that have been with the company from the beginning. One such operator, Mitch Rotolo, told The Advocate that he will end the exclusivity he has with Waitr because of its recent fee structure changes, suggesting that the company should charge customers more for the service instead of restaurants. Rotolo’s suggestion isn’t that outrageous — a recent study from Tillster Delivery Index shows that 83% of customers are willing to pay more for fast food delivery.
But Waitr’s move may be a necessary one considering its profit margins were nonexistent as of March 31. Now that Waitr is a public company and has an acquisition under its belt, it will need to start making money soon. The company already laid off a number of employees in late June following the completion of its Bite Squad acquisition. Targeting higher-volume restaurants also is likely the way it will try and do so, but not without backlash.
…There are plenty of delivery companies in the space for discontented operators to turn to and, with such a public outcry, no doubt some will move into Waitr’s territory. But that doesn’t mean it is going to get any easier for smaller operators, especially since all third-party operators charge a commission. At the end of 2018, for example, Uber Eats was charging 40% commissions in Los Angeles. These providers also aren’t without criticism. Grubhub was recently criticized because of accusations of hidden fees and cybersquatting.
Small restaurant chains and independents that simply can’t take the margin hit from higher delivery commissions could be in trouble. As delivery continues to evolve into an expectation, restaurants are going to grow increasingly dependent on these types of companies. If this weekend’s boycott erodes a big chunk of Waitr’s revenues, however, it could prove that the restaurants themselves are the ones in control.