![]() In Denver, New York City, Los Angeles and elsewhere, officials voted to enact a pandemic-related emergency 15% cap on third-party delivery fees. To help restaurants with the pain that some apps might cause, cities across the country have started limiting the fees that delivery apps can charge restaurants. A report released by market research firm Technomic and Uber Eats in July found a 27% jump in restaurant operators using third-party delivery services since mid-March, when some municipalities went into lockdown. And like them or not, restaurants joined delivery platforms in droves: During a May conference call with analysts, Grubhub CEO Matt Maloney mentioned that many new restaurants have signed up for its services since the pandemic reached the United States. Since the pandemic hit, forcing Americans to stay home and restaurants across the country to limit capacity or close their doors entirely, delivery has become a lifeline. Many restaurants are finding themselves tied to delivery services they hate, without a clear path out.ĭelivery has never mattered to restaurants as much as it does now. Those efforts are helping, but they’re not enough to tip the scale. So restaurants are coming up with alternatives to help complement the big players, like perks for customers who order directly and DIY delivery services. And if they choose to outsource delivery to these platforms, restaurants also hand off valuable customer data and control over how delivery orders show up at their customers doors.ĭelivery has become a lifeline for restaurants during the pandemic Alexi Rosenfeld/Getty Images But profit margins in the restaurant industry are often razor-thin, so these fees can wipe out the restaurant’s profits or put them in the red. For these services, they often charge restaurants around 30% per order. These platforms offer a way for customers to order from local restaurants, process restaurant payments and provide contract drivers to pick meals up from restaurants and deliver them to customers. Restaurant operators complain that third-party delivery providers like Seamless, DoorDash and Uber Eats are prohibitively expensive. You’re not there.” Because so many people order through the app, turning it off would mean losing about 80% of his business overnight, he said. If you’re not on Seamless, “you no longer exist online. ![]() But now, he feels that opting out of Seamless is not an option. Palombino used to do just fine with his own delivery fleet, he said. “The worst thing that has ever happened to us is them,” said Mathieu Palombino, owner of the small New York City-based pizza chain. ![]() Frank filed a federal lawsuit in Manhattan last month seeking class-action status accusing Grubhub, Doordash, Postmates and Uber Eats of ripping off both customers and restaurants.įrank points to a clause in the contracts restaurants and the food delivery apps agree to that prohibits owners from charging delivery customers more than people who dine in, even though delivery costs more.If you visit Motorino Pizza’s website, you’ll be greeted with a plea: Don’t order through Seamless. Lawyer Gregory Frank is skeptical about this reasoning. We also believe that any cap on fees represents an overstep by local officials and will not withstand a legal challenge."Ī spokesperson for Postmates said in a statement that limiting commissions makes it harder to operate and "kills the whole industry's ability to provide the services restaurants need to stay open during this national emergency." ![]() "Delivery workers would have fewer work opportunities and lower earnings. "Any arbitrary cap - regardless of the duration - will lower order volume to locally-owned restaurants, increase costs for small business owners, and raise costs on customers," Grubhub spokesman John Collins said in a statement. New York's fee cap was passed as an emergency measure and applies for as long as restaurants remain closed and for 90 days after eateries are able to reopen. The Salt Uber's Online-Only Restaurants: The Future, Or The End Of Dining Out? ![]()
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