Uhh, wouldn't it be a lot easier for the restaurant owner to simply not partner with Grub/UberEats/Caviar/etc. Delivery cos can't charge a commission to the restaurant if you don't have an agreement with them.
Do they want the free advertising on networks but then disintermediate those same platforms in an effort to work directly with the customers who may have never found them in the first place? I'm all about supporting local businesses but me deleting GrubHub isn't going to stop other people from ordering on it from their restaurant.
Compare the price of the item online versus in store, you will easily see the actual cost of "free shipping".
I was shopping for vanities (very heavy furniture) selling for $300 online as "free shipping". The same item down the street was $150 with no markdown.
People keep saying that, but I paid the exact same price in restaurant and with delivery, since both have people that require a tip and delivery is free over a certain amount
Perhaps they could form a coöp which allowed members to use the app for a nominal not for profit fee that keeps the lights on. ‘Course easier said than done.
I don't get it. It's not like all other food ordering apps a very complicated, they are quite simple in fact -- and they are still operating at loss, as a businesses, not even able to "keep the lights on", as you propose. It's not like they are scrooge mcducks swimming in millions of profits. From what I understand, they still depend on VC money, mostly.
If there is a way to simplify app without serious UX damage, and dramatically lower costs, why it wasn't done already by the same players?
Microscopically, I'm very sympathetic to restaurant owners - especially now that they have few other options; their businesses and livelihoods are roughly speaking held hostage. It's not hard to imagine delivery apps choosing big fees when the restaurants have nowhere else to go and the delivery apps have market power.
Nonetheless, the delivery apps do provide some value: convenient interfaces which let you compare which restaurants are open and delivery ETAs thereof, order tracking, payment security, and so forth. As a user, I'm willing to pay for those features. Are restaurateurs able to price discriminate between different delivery options? E.g. the dish is $10 if you order from us but $12 if you use Grubhub? Or do agreements with the delivery apps of the world prohibit that kind of thing?
Not sure about the US, but here they definitely put different prices on different apps. Not only that, they often put entirely different meals on the apps, or premake the delivery only meals or sometimes, deliver then from entirely different locations.
I think if restaurants engage in more aggressive price discrimination against bad actors in the delivery market, the customers will respond in kind.
The situation is not unlike the restaurant choosing whether to pay more rent for a better location to get more foot traffic, or pay less rent but then need to spend more on marketing.
The apps may be convenient to the user, but they cause direct harm to restaurants. They have become a tax. These apps may have value in a world full of cloud kitchens, but until then, they are a parasite and represent a bad equilibrium.
How can you possibly know that, without details of restaurant books?
What if they are more than making up for the loss on individual orders by having much greater volume of orders, directly made possible by the convenience of all-food-one-app?
I do not have access to "restaurant books", but I do visit many in my area and I make a point to speak with both the restaurant folks handling take out orders and the loitering individuals running for these apps. The restaurants are universal in saying it is bad for their business, but they have no choice. The deliverers tend to not care -- they are focused on maximizing deliveries. Anecdotal, for sure, but it fits with what has been reported in WSJ and elsewhere.
Making up for losses on individual orders by ramping up volume is a tired and true way to lose even more money.
I talk to the local cart and restaurant owners when I pick up orders from them. The increased volume in orders is nice, but doesn't make up for the hassle of managing all of the different devices and vendors. One cart owner has memorably gotten her grandson to artfully arrange her half-dozen different phones and tablets into a little status panel. One restaurant has divided up responsibilities, with different people managing different order queues from different apps, so that Grubhub orders and DoorDash orders might as well be served from two different kitchens. (But of course it's just one single overworked kitchen.)
Food has aggressive margins. Everybody I've talked to in the business is overleveraged, trying to hold onto their cart or lease, and hoping that they don't get sick because they don't have the cash to pivot or close. The delivery app publishers are rent-seekers; nothing prohibits restaurants from employing their own drivers, as Italian and Chinese restaurants used to do, or taking carryout/to-go orders by default, like just about every food cart. Do not forget that the main appeal of delivery apps is that they effectively are cheap because they don't treat drivers as full employees, but we are hopefully soon exiting that era and as soon as we do, we will have to stop the cheap delivery.
The industry desperately needs an https://www.ecomdash.com/ for both ends of the equation. A way for restaurants to consolidate all their orders into one panel. And a way for delivery drivers to be accessible to multiple apps in one route. Even better would be the companies working together to trade orders to reduce overlapping traffic and more efficiently create routes.
This wont happen because its not in each apps best interest, but they should be relegated to what they actually are. A yellow pages. A middle man that connects a driver and a restaurant, and collects a referral and connection/dispatch fee.
This is one of the places where government intervention could benefit restaurants and drivers. Force all the companies to speak a single protocol that can be received by any compatible pos and dispatch app. Enforce some level of interoperability. Enforced swaps of food runs might be pushing it, but it really would benefit just about everybody except the food delivery apps. If banks can credit default swap, why cant food delivery apps be more efficient on the roads?
Even for the customer, I don't care which delivery app something is on, and its a pita to check them all and compare prices. I would much rather give loyalty to one that listed runs only their competitors have deals with. These food delivery service companies should exist more as a single technical contact a restaurant can call with issues. Outsourced IT, payment processing, service maintenance, troubleshooting, and ad hoc support. Restaurants having to support them all or lose business is ludicrous.
As a side note, I find the Virtual Restaurant concept to be another pollution. One kitchen being able to show up in the results three times because they list themselves as three kitchens. I get why, from a marketing perspective, that it helps to brand yourself as a specific niche, but its really a cheat of the system and limited screen real estate more than anything else.
Except local restaurants get around that by having continuous x% off coupons that only apply to orders direct to them. Now it's the same menu price, but consumers see the actual cost difference on the whole bill and can decide. Bonus, you can throw the initial coupon in the bag GrubHub delivers for you.
Learn to be a regular of the restaurants which you like.
Learn the menu items that you like. Be comfortable ordering the same thing most of the time. Learn when your body likes to eat. Take a walk to carryout.
Your rewards are simple and obvious. People will learn what you like to eat. They'll also learn your name, your surface affect, and what you broadly do with your life. You may find yourself with the opportunity to enrich yourself by being kind to others.
Macroscopically, I stopped using delivery apps because they didn't know where I lived and their app maps couldn't route to me. A while later, while walking to pick up dinner, I happened to save somebody from being hit by a car. I didn't plan that, but it happened because I wasn't trying to isolate myself from the world. You cannot predict how your choice to be a better community member will affect those around you, but you can choose to have the opportunities and effects.
While I really support and empathize with the restaurants, the apps only came about because there was a need. For DECADES, restaurant web sites have been absolutely awful. Every single one has some combination of crappy auto playing music, terrible pictures, and out of date menus that were impossible to read (on mobile) PDFs or bad fax copies. They always seemed to focus on some artistic vision of how the chef wanted you to feel about the food, with custom, hard to read fonts, flowery language that sounded good but actually said nothing, and daily specials from 6 months ago.
Online ordering through them is extremely difficult or just impossible. None ever adapted to mobile, even though that’s been around for 10 years. Most still have not bothered to claim their business on Google maps so you can get a good phone number.
The 30% markup can be seen in many ways as the fee for cleaning up their mess and making the menus and ordering actually usable for people.
This may have come off as more harsh than I mean it to be, but much like taxis and Uber, the restaurants left the door wide open by providing such a bad experience, and the apps solved it.
I feel for this guy. I have never used a delivery app.
But during a lockdown, restaurants ought to meet customers in the middle. Demand is down significantly, not a surprise when the product is sub-par (no service, semi-warm food, often missing condiments, clean up yourself, no refills, etc). In my experience, very few restaurants* are discounting or lowering prices in an attempt to boost the volume of business, or even passing along a part of the Grubhub fee to customers willing to pick up their own food.
I guess that's why they are restaurateurs and not economists.
“A plea from a local restaurant owner is asking customers to stop using food delivery apps and instead order directly from the restaurant.” ... “ it is an effort to avoid "25-30% commission rates" they're currently paying.”
I don’t blame him. People should be supporting local businesses, and siphoning off 30% isn’t a good way to do that.
I once used DoorDash's "order for pickup" option, not wanting to pay the delivery fees for something that was close by. Got asked very strongly by the restaurant at pick up to not do that again and instead just give them a call due to the crazy fees they need to pay for that. I haven't used that "order for pickup" option since.
When the quarantine started, restaurants and small groceries in my city have opened WhatsApp/Telegram/instagram channels of communication. Almost all of the have asked frequent customers for word of mouth recommendations. As a customer, I'm more than pleased with the results so far.
Big stores have handled the quarantine in an apalling way, while the small shops have managed to keep a high quality customer service (I mean, pretty much what they already offered) and haven't even hinted at raising prices -- as the big stores have implied or done already.
Are they delivering? No? Then sorry, I won’t delete it.
For a point of comparison, of the places I use Door Dash for, none of them deliver food. And perhaps rightly so, since there’s a pretty hefty cost associated with hiring delivery drivers.
The delivery service is just worth that much to me.
That's fine, but you should be paying those hefty delivery fees and not the restaurant. And these fees will only go up now that venture capital is less likely to subsidize losses.
I am paying those fees, albeit indirectly: the money I pay for the food is also going to cover those fees. Just as if they have delivery drivers; I’m paying for their driver’s costs as well when I order delivery.
If the prices being charged don’t yet include those delivery fees, they will soon. It’s no different than how prices went up to cover credit card fees.
I understand that 30% sounds like a lot, but this is a bit of "pie slicing" thinking, instead of "pie growing".
The 30% that Doordash/Uber Eats charge pays the cost of delivery and customer service. It's not free to provide food delivery.
The restaurants could attempt to provide the service themselves, but there's no real reason to think they can provide a better service at a lower cost than Doordash. If they could, then Doordash wouldn't exist.
Yes, which is presumably what the X% service fee goes towards. Every order made on the platform assesses a fee ("Taxes and Fees" line item) to the consumer that goes to DoorDash (not your delivery driver), on top of charging the restaurant a 30% fee.
I'm looking now, and I'm being charged a 5% service fee for an order on DoorDash. So DoorDash is charging 35% in fees on that order, assuming the 30% restaurant fee is correct.
I've said this before and been buried, but a decentralized free app can replace Uber Eats etc. and make the commissions close to or equal to zero.
Things like Bitcoin and Ether would really help to make that a reality.
You would not even necessarily need a map in the app. Just relay the GPS coordinates and the app can display the distance that the delivery driver is at.
What I hate about these delivery apps is the hidden markups. If I order the food and it says the price is X and the fee is Y, I'd like to be able to trust that. But if I look online and find out that the price of the dish I just ordered is jacked up by $2, that's turned me off from using them.
This is part of the problem. The delivery service shouldn't allow a markup, just like credit card companies of old didn't allow restaurants to pass on any of the transaction fees by contract. It really helped with adoption by consumers.
I don't mind paying for it, but I want to know how much I am paying. The other day I ordered from Instacart and saw the receipt from the grocery, I paid 25% of the total ($200) to get the delivery. There's delivery fee, service fee, tip all exposed, but the markup on the food items was more than all of that combined. That's a bunch of bullshit.
Usually when you think the solution is so obvious, other people actually thought of it too. In this case, the lawyers already added that to the agreements so they can’t do that. Same as with credit card companies saying you can’t charge a different price for cash vs credit (oil companies excluded because they have the power to refuse it).
Usually its so obvious that when people gave a suggestion, they actually thought it too. In this case there is no agreement that disallow restaurant to do that.
Does it have to cost 25%? What are restaurant owners getting from that app-store like markup? Is it merely access to an hungry market? Can someone simply come in, make a simple app, and compete on price?
Perhaps Fedex can start delivering food? I mean, it does cost something to motivate an uninterested party to drive from point-to-point with your veggie burger.
Or, you could always get off your butt and go get it yourself.
I wish we had a delivery app where all restaurants on the platform are partners in ownership, and they cannot deny other restaurants from becoming partners.
These food delivery companies are unnecessary middlemen, and generally leeches. Their revenue (note: not income, as they still lose money) comes at expense of restaurants. The economics simply do not work. Please stop using these apps and deal with the restaurants directly.
And the apps that offer deliver do so at a loss. The economics do not work so long as people need to get paid. You do not _need_ to use delivery services to pick up fro trendy restaurants that represent a bad equilibrium to all parties asides from yourself. This was a market inefficiency enabled by cheap capital.
Do they want the free advertising on networks but then disintermediate those same platforms in an effort to work directly with the customers who may have never found them in the first place? I'm all about supporting local businesses but me deleting GrubHub isn't going to stop other people from ordering on it from their restaurant.