Worcester restaurants wrestle with popular delivery apps

Rummaging through a drawer of takeout menus and calling a restaurant to place an order is so 2016 — it’s 2019, and that means consumers can order food to their doorstep just seconds after unlocking their smartphone.

While restaurants are still receiving calls for takeout orders, some Worcester restaurants say they have seen more orders come through apps like Grubhub, DoorDash and Uber Eats over the past three years.

These trending delivery options are commonly referred to by restaurants as “third-party food delivery services,” because they intersect the interaction between a restaurant and its customers. The third-party services can be used on a smartphone app or online, and they display every delivery option available to a customer based on their location.

The platform-to-consumer delivery market is expected to show an annual growth rate of 8.2% with a market volume of almost $12 million in 2023, according to Statista, an online data portal. A Grubhub associate said in an email that since 2015, the company has partnered with more than 100 restaurants in Worcester.

“There has been a rapid increase in the number of third-party deliveries,” Bob Luz, president of the Massachusetts Restaurant Association, said. “It’s something that restaurants have struggled to embrace.”

Kyle Wheaton, owner of Worcester Pizza Factory, said he felt coerced into using third-party delivery services, even though his business has its own delivery service. The Maywood Street pizza shop is just a short walk from Clark University, where students tend to order food on their smartphones instead of calling, Mr. Wheaton said.

“Millennials just don’t want to pick up the phone,” he said. “I think there is some anxiety issue or something.”

The restaurant has been on Grubhub for about three years and on Uber Eats for a few months.

For every order placed through a third party, the pizza shop is required to share the profit. Grubhub takes 20% on orders and Uber Eats collects 15%, Mr. Wheaton said.

Worcester Pizza Factory does not allow third-party drivers to transport food. That means Grubhub and Uber Eats make their 20% and 15% profit from facilitating the ordering process, not from picking up and delivering food.

“Anything that leaves here goes through my guys,” Mr. Wheaton said. “I have a secondary insurance policy on my drivers because they handle food outside of the restaurant.”

Paying extra for third-party orders is troubling for Mr. Wheaton, who manages his own online ordering website where he would receive full profit on orders.

“We do the deliveries and everything involved in it, and [third parties] literally just put up a website and collect 20% on the back end,” Mr. Wheaton said. “It’s a good deal for them and a bad deal for restaurants.”

Although companies like Uber Eats and Grubhub lessen profits on each order, as a whole, they add up to a large portion of daily sales, he said.

“If we dropped all of the third parties, we would lose at least 25% of our business overnight,” he said. “About 25 to 30% of our business comes from third-party apps, and it is not going down.”

Worcester Pizza Factory receives about 15 orders per day on the company’s website, compared to about 30 per day through third-party apps.

“We used to bring menus to every Grubhub order with our website [listed] right on the front, but they don’t care,” he said. “They do the same thing over and over, and I don’t think they know that it is costing us a lot of money.”

At Crown Fried Chicken on 4 Front St., owner Mohib Hashimi said his business does not see any profit from third-party food deliveries after Grubhub, Uber Eats and DoorDash collect their share. He said he only turned to third-party delivery services because he had no other option for delivery as a business located in downtown Worcester with no parking lot.

He will continue to offer third-party delivery with the hopes that customers might come into his store eventually, but he said third-party delivery was growing.

Fresh Way Pizza, on 96 Water St., uses Grubhub, Uber Eats, DoorDash and Slice in addition to their own online delivery system, much like Worcester Pizza Factory. But at Fresh Way, Uber Eats and DoorDash drivers make the deliveries themselves.

While having the third-party deliveries generates extra business for Fresh Way Pizza, the shop’s own delivery drivers are losing out the most.

“It’s revenue, but when [third-party orders] are the only orders coming in, [our drivers] get mad because they are not making money,” manager Kelley Cloutier said.

Uber Eats and DoorDash drivers might even receive a tip after delivering food, which Ms. Cloutier said is troubling.

“I would rather see my employees get the money than somebody else,” she said.

Ms. Cloutier said it is also frustrating when the restaurant receives negative reviews online because of the Uber Eats and DoorDash drivers, since what they do is out of her control. She said she has seen Uber Eats drivers carry a pizza box on its side, sending the cheese to the bottom of the box, when delivering on a scooter.

Because third-party drivers typically do not carry insulated bags — especially ones that would fit a pizza — food is often delivered cold and soggy, she said.

“I’ve heard customers say they never receive their order,” she said. “Last week, a $45 order was sitting on my oven, and the Uber driver finally showed up at 2:30 a.m.”

Uber Eats provides a series of instructional videos on its website for their drivers, ranging from how to pick up and order to how to get help if an issue arises. In a video on how to deliver and order, an Uber Eats driver is shown carrying an order, which was packaged in an Uber Eats bag, in an insulated backpack while riding a bike. The backpack does not appear as if it would fit a pizza box.

Grubhub said in an email that their drivers receive an insulated bag after clearing a background check.

“Each driver receives an insulated Grubhub bag to transport food deliveries of all cuisines and sizes,” Demarquis McIntyre, a public affairs associate said in an email.

Mr. Wheaton said he would be wary of Worcester Pizza Factory food being delivered by someone he did not hire himself.

“With strangers from Uber who sign up to make a few bucks, you have no idea what is going on,” he said. “You don’t know if they are smoking in their cars.”

Uber guidelines state that passengers cannot smoke in an Uber car ride, but it is unclear whether Uber or Uber Eats drivers are prohibited from smoking.

Ms. Cloutier could not speculate as to why a customer would use a third party, which she said was more expensive, slower and not under the supervision of the restaurant.

“It makes no sense,” she said. “I would call the place directly.”

Despite its flaws, ditching the third-party system is not an option for the pizza shop, which relies on the extra orders for more than half of its business.

“It would probably put the store out of business,” she said about the services that have only been used for about three years.

However, for restaurants that don’t want to — or can’t — deal with the headache of starting a delivery service, third-party apps are welcomed with open arms.

Brie Swift, general manager at NU Kitchen on Chandler Street, said third-party delivery services help make her restaurant more accessible.

“We wanted people that couldn’t come here, like if they didn’t have a car or were at school, to still have access,” she said.

That doesn’t alter the fact that the company makes less money when customers use third-party apps to pick up in the store themselves.

“Some people use the app to do in-store pickups, but the restaurant already offers online ordering, so they lose money when customers opt for the third party,” Ms. Swift said.

Although NU Kitchen pays for third-party delivery services, Ms. Swift said the long-term effect of gaining new customers could offset the cost.

“We also use them because they get our name out there,” she said. “Maybe people haven’t heard of us and that is the first time.”

NU Kitchen uses Grubhub and Uber Eats, and Grubhub makes up 90% of their third-party orders. The restaurant received at least 50 orders per day between the two services combined.

“Some people order catering size orders, so you can tell it is an office ordering lunch,” Ms. Swift said. “Overall it keeps us busy.”

Crust Artisan Bakeshop on Main Street has been using Grubhub since the beginning of the year, and manager Nate Rossi said the bakery receives two to six delivery orders per day.

“It’s super simple, that’s why we use it,” he said.

Mr. Rossi said the bakery doesn’t face some obstacles that other restaurants might face when doing deliveries. Most items on the bakery menu can be made quickly, like breakfast sandwiches and coffee, and they don’t have their own delivery service.

“If there were more moving parts to this business, I could see the drawbacks,” he said. “Right now it’s just extra money, an extra $1,000 check every month.”

Whether or not a restaurant sees benefits when using third-party delivery services, they are not going anywhere anytime soon.

“Restaurants are realizing that it is an evolving business space that they have to adapt to,” Mr. Luz said.

Mr. Wheaton said he thinks customers are not aware of what negative effects apps like Grubhub, DoorDash and Uber Eats might have on Worcester restaurants, and that their tendencies could change.

“It’s convenient for customers to go to the apps and see all of the restaurants in the area, but if people knew that we were paying a lot of money, tens of thousands each year, they might think again,” he said.


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