As Restaurants Fight to Stay Alive, Delivery Services Continue Controversial Practices

I’d hoped this week to write a post rounding up the moves third-party delivery services are making to help restaurants as the COVID-19 crisis escalates and businesses are forced to end dine-in service.

Trouble is, delivery services are not necessarily helping. They more seem to be hiding behind frothy PR statements that sound great when they hit your inbox but in reality do absolutely nothing to alleviate or change the 30 percent commission fees per transaction restaurants have to pay to use these services.

And right now, restaurants must use delivery. Cities and whole states are mandating shutdowns of all dine-in service for unspecified amounts of time. The majority of industry people I’ve chatted with over the last few days say the same thing: restaurants need to pivot to a to-go-only model right now.

Delivery companies are making moves, some of them helpful, some of them less so, as it turns out.

Last week, Grubhub said it would be “temporarily suspending collection of up to $100 million in commission payments from impacted restaurants nationwide.” In actual fact, and according to the fine print displayed in footnote-sized font, this temporary suspension only applies to Grubhub’s marketing commission fees, and those aren’t even completely waived. Restaurants have four weeks to repay these deferred commissions starting April 13, and upon signing up for this so-called relief program, they are also required to keep Grubhub as a delivery service for one year after.

DoorDash said it will waive commission fees for 30 days for independent restaurants that sign up with the platform from now through the end of April. The service really does appear to be waiving the fees, not simply deferring them. But it doesn’t really define what “independent restaurant” means and, I hate to break it to you, but we’re going to be in this mess a lot longer than 30 days. Meanwhile, existing customers will pay “no commission fees” on pickup orders. The question is whether waiving commission fees on takeout orders will be of much use to restaurants, since people are being forced to stay home may not venture out even for to-go orders.

Postmates also announced it would temporarily waive commission fees for new independent restaurants signing up on the platform. That only applies to restaurants in San Francisco, though, where the company is headquartered. No mention has been made of a city like Los Angeles, which has banned dine-in eating and also happens to be one of the most popular cities for Postmates’ service.

Frankly, both the efforts from DoorDash and Postmates in this area now look like thinly veiled attempts to grab more customers and boost their numbers. DoorDash, too, is supposedly prepping for an IPO, though it’s anyone’s guess if that will actually happen anytime soon.

Uber Eats hasn’t announced any changes to its commission fees. The company this week only announced a plan to let restaurants get paid out for their orders daily rather than weekly. 

wrote last week that the survival of many restaurants partly depends on delivery services’ willingness to adjust commission fees and be of actual help to these businesses. As shutdowns continue and businesses struggle, this is now a crucial piece of the equation when it comes to the survival of restaurants.

Delivery companies, I don’t know if you got the memo that the restaurant industry is collapsing before our eyes right now, so let me again remind you. Billions of dollars in business is going to be lost. Millions of people will lose their jobs. Many restaurants will have to shutter permanently. Many more will emerge from this time (whenever that ends) in more debt and with fewer staff than ever before. 

You’re one of the few entities out there that could actually make a real difference and even in part save these businesses. What are you going to do today to fix this?

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