The #1 Thing You Can Do to Help Your Favorite Restaurant
Ordering a meal from your favorite restaurant during the coronavirus pandemic seems a win-win situation. You get great food delivered to your door and your local eatery gets critical revenue in hopes of keeping their business afloat. However, a new report explains how reliance on third party delivery apps is doing restaurant owners no favors, and, if you really want to help out your favorite dining establishment, you should be ordering directly from them.
There is no question that the vast majority of independently owned and operated restaurants are in dire financial straits due to the coronavirus shutdown that has made dining out nearly impossible. Yes, many of these eateries have pivoted to offering more aggressive delivery and takeout options, most of whom have relied on third-party services like GrubHub, Seamless, Instacart, and UberEats. But, according to a new report by NPR, the increased percentage take by these services are cutting into restauranteur's bottom lines.
Anil Bathwal, owner of the Kati Roll Company in New York, tells NPR that he relies on food apps like Grubhub-owned Seamless, Uber Eats, Postmates and other food-ferrying services to supplement his dining-in purchases, despite the hefty commissions the apps tack onto every sale.
For an order of $12, the apps take roughly a 17% commission, which is on top of a fee for delivering the food to someone's door. "In the end, Bathwal said, that Kati roll purchased on the delivery app would net his restaurant about $7," says the report. But, "App commissions were more manageable when it represented a smaller segment of overall revenue. But the pandemic changed that."
"That's the only game right now. There's no other way for people to get business because of the lockdown," Bathwal tells NPR. "If it starts becoming 30%, 40%, 50% of your business, it is not incremental business—it is your business."
So, while GrubHub, Seamless, Instacart, and Uber Eats are helping provide a necessary service to many outlets, the amount of money going to these middlemen delivery apps is cutting deep into the already razor-thin profit margins of independent eateries.
As a result, urban municipalities where these third-party apps flourish are looking at capping commission structures in a bid to help save a struggling industry in which one in four restaurants may not survive.
If you truly want to help your favorite dining establishment survive, forego the convenience of the food ordering app and order directly from the restaurant—whether that means calling them to place your order or popping in with a mask to place an order and pick it up curbside. That minor change may be the difference between helping keep a restaurant in business and them having to shut down for good, like these 5 destination restaurants that may close.