Due to the COVID-19 pandemic and stay-at-home orders across several counties in Southern California, restaurants have transitioned into offering their menus online. Some establishments are doing so for the first time ever.
Many restaurants throughout the country have closed their dining areas and have taken a cut in revenue in taking these measures to ensure the well-being of customers and employees.
However, the deepest cut to the restaurant industry has not been made by the loss of face to face interaction nor the fact that dining areas are inaccessible.
Restaurants have faced a deep cut in revenue from food delivery apps including DoorDash, Grubhub, Postmates and Uber Eats.
In late April, Giussepe Badalamenti, a pizza parlor owner in Illinois, shared an invoice from Grubhub on Facebook detailing the fees the third-party delivery app charged the restaurant for in March. Commission and delivery fees, as well as promotions are taken into account.
In the Facebook post, Badalamenti noted how in almost $1100 worth of orders placed through Grubhub, his business gained less than $400 from the app.
“Stop believing you are supporting your community by ordering from a [third] party delivery company,” Badalamenti said in the post.
Third-party delivery apps are taking advantage of restaurants that are facing an unprecedented obstacle.
I firmly believe that if we want to help our local restaurants, we should place our orders over the phone or on the restaurant’s website, or even order in person, while following proper social distancing and public health guidelines.
Directly ordering will not compromise any of the revenue for the restaurants we want to support. This is the best way we can support local businesses that are facing a tough challenge.
Another unsettling instance of delivery apps exploiting restaurants occurred in early April when Grubhub ran a promotion called “Supper for Support,” in which the app offered customers a $10 discount on orders over $30.
Although this may appear to be a sound idea for consumers, Grubhub was actually contractually obligating restaurants who opted into the promotion to cover the discount, in addition to paying the app its usual commission fees.
Public backlash and criticism forced executives to alleviate businesses that opted into the promotion. A tiny sum of $250 was put into restaurants, covering the discounts of up to 25 orders per each establishment, according to the terms and conditions of the “Support for Supper” promotion.
Once a restaurant expended this money, it was up to the eatery to cover discounts for additional orders during the promotion, yet again.
This dishonorable act is another sign of third-party delivery apps taking advantage of struggling businesses.
Although a federal loan program has been passed to aid small businesses during this pandemic, these same businesses that receive aid will be held accountable for paying back the loan with interest.
Small restaurants, including beloved “hole in the wall” spots and mom and pop places are sure to encounter difficulty in doing so.
“The small guys don’t have negotiating power and the leverage the big guys do but do not want to be forgotten about,” Badalamenti added in a comment on his Facebook post.
Seeing as this has come from a business owner that has been affected by delivery apps, I feel that we as consumers should be making better decisions when we choose to order food.
Even though the acts of Grubhub have gained notoriety and have been the most publicized, we should remain skeptical of other apps like Postmates, Uber Eats and DoorDash, as they are also charging commission fees.
The lesser of two evils does not exist when ordering through any of these apps.
We must support our local businesses and local joints we enjoy grabbing a bite from by ordering directly to our favorite eateries.
