Are Delivery Apps Hurting or Helping Restaurants?
Since the mandatory closures began in March, many restaurants have turned to delivery apps to keep their businesses alive. But are these apps actually doing the opposite?
Before the pandemic, most restaurants saw delivery apps as incremental revenue that didn’t require filling seats in their dining rooms. However, they now have different feelings. “It’s a huge, huge chunk of our money. Especially because people are just, for the most part, using this money to pay their staff,” Chef Ashish Alfred tells Marketplace. He owns several restaurants in Maryland and never used to have a problem with the apps, but that has changed since the pandemic hit. While the restaurant business has been mostly takeout and delivery for the past few months, tensions have risen between restaurant owners and the delivery apps.
In Chicago, third party food delivery apps are now required to list an itemized cost breakdown of each transaction for customers. Mayor Lori Lightfoot announced the new rule in response to mounting criticism over profits that food delivery companies take as commission. "It's very important for transparency," Lightfoot said. "I think the average customer who's ordering wants to know what the actual payment is, what the fee is going to be for the restaurant," she told news network ABC7.
San Francisco has enacted an emergency cap of 15% on delivery apps and several New York City lawmakers are pushing for a 10% cap (Marketplace). But some apps are insisting that their platforms provide needed services and that limiting fees would lower pay for delivery drivers (The Washington Post).
To help support your favorite restaurants, consider checking their website or calling to see if they deliver themselves. This way, there will not be any additional fees for them to pay and the money from your order will all go straight to the restaurant.
If you are looking for more information on how COVID-19 has affected the restaurant industry, read our previous blog post for more insight.