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Maryland restaurant owner: 'Delete all the delivery apps'
- jagged-chisel 7y ago“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.
- dave5104 7y agoI 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.
- dr_zoidberg 7y agoWhen 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.
- meritt 7y agoUhh, 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.
- mattbk1 7y agoAgree. Many of the restaurants around here only deliver through those apps.
- Godel_unicode 7y agoThis is a thieves paradox problem, if every other restaurant is on GrubHub, are you going to go out of your way to order from the one that isn't? Edit: The solution would be transparency in delivery fees, Amazon has made it pretty clear that "free shipping" will always win though.
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- tantalor 7y agoCompare 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.
- Fire-Dragon-DoL 7y agoPeople 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
- dave5104 7y agoYou'd think it'd be easy, but GrubHub at one point was making sure that didn't happen: https://www.theverge.com/2019/6/28/19154220/grubhub-seamless-fake-restaurant-domain-names-commission-fees https://www.theverge.com/2019/6/28/19154220/grubhub-seamless...
- paulcole 7y agoDon't some of the apps mark up prices themselves and get the money from the customer?
- matz1 7y agoOr just put different menu price on the delivery apps. Increase the price to whatever commission they charge.
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- orev 7y agoUsually 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).
- matz1 7y agoUsually 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.
- robrenaud 7y agoDoes 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?
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- listenallyall 7y agoPerhaps 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.
- prklmn 7y agoI 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.
- marcell 7y agoI 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.
- dave5104 7y ago> The 30% that Doordash/Uber Eats charge pays the cost of delivery and customer service. It's not free to provide food delivery. Then what do the $X flat delivery + X% "to keep DoorDash running" fees pay for? It feels like DoorDash is double dipping if it's simply to pay for the delivery and customer service.
- Godel_unicode 7y agoThe delivery service is a totally separate expense from developers, AWS, marketing, etc
- dave5104 7y agoYes, which is presumably what the X% service fee goes towards. Every order made on the platform assesses a fee ("Taxes and Fees" line item) to the consumer that goes to DoorDash (not your delivery driver), on top of charging the restaurant a 30% fee. I'm looking now, and I'm being charged a 5% service fee for an order on DoorDash. So DoorDash is charging 35% in fees on that order, assuming the 30% restaurant fee is correct.
- throwaway888abc 7y agoWhy fees in first place? Why not 1$ per delivery ?
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- Tarrosion 7y agoMicroscopically, 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?
- psswrd12345 7y agoThe 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.
- Godel_unicode 7y agoHow 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?
- psswrd12345 7y agoI 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.
- psswrd12345 7y agoThese 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.
- bradknowles 7y agoBut the restaurants don’t do delivery. If they did, then I wouldn’t need to use DoorDash or GrubHub, or whatever.
- psswrd12345 7y agoAnd 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.
- dariusj18 7y agoWhat 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.
- bluedevil2k 7y agoThat’s the restaurant jacking up the price for the food delivery services. Covers their tips and stuff.
- dariusj18 7y agoThis 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.
- Godel_unicode 7y agoThis attitude is the problem; consumers want the convenience but don't want to pay for it.
- dariusj18 7y agoI 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.
- falcolas 7y agoAre 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.
- psswrd12345 7y agoThat'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.
- listenallyall 7y agoDo you accept Amazon or Newegg or <name favorite store>'s offers for free delivery?
- falcolas 7y agoI 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.
- listenallyall 7y agoI 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. *excluding fast-food
- ilaksh 7y agoI'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.
- orev 7y agoWhile 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.
- lazylizard 7y agoDo restaurants not get to set prices?