Three Ways Delivery Apps are Ruining Your Favourite Restaurants
Across the world, restaurants are hurting right now. Forced to shut their dining rooms at the start of Spring, everyone from fast-casual to fine dining is struggling. Without diners coming in every day, they are stretching to cover rent, payroll, and the many other expenses that go into running a restaurant. Without a regular income, many will have to close permanently.
Many of these restaurants have pivoted to offering delivery, and thoughtful customers are thinking about ways to help them get through this stressful time. Many customers are ordering delivery from their favorite restaurants - both because they love the food and because they want to help beloved local businesses.
Unfortunately, when customers open up their favourite delivery app for convenient ordering, they could be doing more harm than good to the restaurants they love. The delivery apps that claim to be lifesavers for the restaurant industry are actually taking advantage of this worldwide tragedy for their own gain. They are harming the restaurants and making it even more difficult for them to remain profitable while they are not able to serve people in their dining rooms.
Here's how they are doing it:
They Charge Huge Fees
Most of these apps charge a 30 to 40 percent commission from the restaurants. That means that if you order a $20 dish, the restaurant will only receive between $12 and $14. Those fees are challenging to manage in the best of times, and right now, they're impossible. Restaurants operate on tiny margins, and they set their prices as low as they can while still being profitable. When they are forced to cut their prices by nearly a third, they are not able to afford to pay their bills. They charge big fees on takeout, too - so just picking up the food yourself doesn't necessarily help the restaurants.
They Require Restaurants to Pay for Their Promotions
Sometimes, these apps offer promotions for their customers, such as waiving delivery fees. However, they don't actually reduce their own profit - they just require restaurants to cover that money instead. Restaurants don't get to decide whether or not they want to offer a promotion - the app just decides to offer it and passes the cost along to the restaurants. That can make it even less affordable for restaurants to work with delivery apps.
They Don't Let Restaurants Adjust Their Prices
These apps also don't allow restaurants to charge better prices elsewhere than they do on the app. That means that they can't offer better rates for people who order directly or dine in. Restaurants must charge people the same price no matter where they order, which means that the apps have a head start. Restaurants cannot compete with the apps on a price basis, which is why they need your help.
If you want to help your favourite restaurants stay in business long after coronavirus has passed, it's easy to do! When you decide to order delivery, order directly from the restaurant if they offer it. If they do not offer direct delivery, consider making the extra effort to pick up takeout. When you get into your car to drive over to your favourite restaurant, you are guaranteeing that they will get all of the money from your order without a portion of it going to the delivery apps.
Right now, restaurants have little option but to work with these apps if they want to sell food at all. The apps have done a great job positioning themselves as saviours of small businesses, as part of the solution to this great global program. But they are not. They are, instead, taking advantage of a painful time to make huge profits - at the expense of beloved local restaurants. Customers, however, can help save their favourite cafes, diners, and restaurants. They just need to decide and make sure they are ordering directly. Many times, all it takes is a call.