As you’ve probably heard a hundred times, now is not a good time for restaurants. To contain the spread of the coronavirus, dining rooms in Illinois are closed, which means that restaurants must now rely on pickup or delivery.
For many establishments, that means that their customers are spending even more time engaging with food delivery apps like Grubhub, Uber Eats, DoorDash and Postmates. But there are some serious questions about whether these apps treat restaurants fairly, with some prominent local restaurateurs loudly decrying the high fees and the badly behaved delivery drivers.
Grubhub has also had to deal with backlash from a recent promotion, which was pitched as a way to help struggling restaurants. The offer was for $10 off an order of $30 or more. While Grubhub came up with the offer, any restaurant that opted to participate was supposed to eat that cost while also paying Grubhub a commission based on the original price of the meal. This led to negative articles from the Los Angeles Times, Eater, The Verge and even The New Yorker. Recently, Grubhub walked back somewhat, promising to give restaurants that participated $250 each.
This isn’t the first time that restaurateurs have called out food delivery apps like Grubhub. But with restaurants struggling to make money during a pandemic, many are becoming more vocal in their opposition.
While the amount differs slightly for each restaurant, it’s common for a food delivery app to have a commission fee of 20 to 30 percent of each order. In the restaurant business, where margins are already tight, that can be a nonstarter.
Cesar Gonzalez, the co-owner of L’ Patron in Logan Square, doesn’t use any of the apps because he doesn’t like that percentage. “I’ve had long conversations with them, but all those guys, they want 30 percent off the tab,” says Gonzalez. “It’s just too much. I sell tacos, tortas and burritos. I’m not making 30 percent off a taco. They are bullying restaurants.”Ads by Teads
Gonzalez decided to avoid online ordering altogether, so if you want delivery from L’ Patron you have to call. “I don’t want to pressure the kitchen to work faster than they already are,” says Gonzalez. “If it’s too busy, I just take the phone off the hook. Otherwise, everything just takes too long. You upset the customer on the phone, the customer in the dining room and you’re putting more pressure on the kitchen.”
But for restaurants that want online ordering, the delivery apps do provide a lot of appealing features.
“Think of all things you have to worry about for online orders,” says Jim Graziano, the owner of J.P. Graziano Grocery in the West Loop. “You have to have a website and a developer to create an ordering system. It needs to take orders, process credit cards, notify you and the customer. You need to figure out what happens when you get an order, and then time it all out so the customer gets it in a reasonable time. All of this happens while you have the business operating.”
Plus, Grubhub allows restaurants to reach many more customers than ever before. “The reach that Grubhub has is miles ahead of anyone,” says Graziano. “No single restaurant could have the reach of Grubhub.”
All the restaurateurs interviewed for this story admitted that third party apps brought in loads of orders. “We would turn on DoorDash, and then turn it off after 15 minutes because we had so many orders,” says Dave Bonomi, owner of the West Town pizzeria, Coalfire. “That was so appealing.”
“For a while, I was in one gear: sell as many sandwiches as I possibly could,” says Graziano. “Grubhub and Uber Eats would send me a ridiculous amount of orders. ‘Look at all this money!’ I’d say.”
But then he realized some of the downsides of the high commission fee. “When you look at the books at the end of the month, you realize how hard you worked, how little profit there was and how much you paid for these apps,” says Graziano. “Now you’re a third party for Grubhub. You’re working for them.”
Bonomi concurred: “You are making more revenue but not profit.”
More than the slim margins, a number of restaurateurs disliked giving another company control of their brand. “Yeah, the 30 percent sucks, but it goes so much deeper,” says Graziano. In particular, restaurateurs expressed how frustrating it was to deal with delivery drivers.
Joe Fontana, owner of Fry the Coop, says he had the most trouble with Grubhub. “They didn’t have enough drivers, and the ones they had weren’t trained,” says Fontana. “We’d get a ticket for a Grubhub delivery, make the food, and then it would sit for 30 minutes to an hour because the driver was so late. When the driver finally arrived, we’d have to refire the order so that it wouldn’t be terrible.”
Fontana says that sometimes a driver wouldn’t even show up, so the restaurant, known for its fried chicken sandwiches, decided never to complete a Grubhub order until the driver walked through the door. “But then the customer would be angry because the order took so long to arrive,” says Fontana.
Aaron Steingold, owner of the modern Jewish deli Steingold’s of Chicago, says that along with drivers never showing up, he’s had multiple occasions where drivers would curse out his staff and even his guests. “I’m a pretty relaxed guy, but I’ve had to kick them out of the restaurant,” says Steingold. “We have a packed restaurant and they are yelling for the food.”
Bonomi says that most of the drivers he dealt with had no regard for the food. “I’d put it at over 70 percent had issues,” says Bonomi. “They’d walk in without the warmer bag for the pizza. I’d ask them politely to grab a warmer bag, and then you get an attitude. They’d say, ‘Other restaurants aren’t as strict as you.’ But why does my food have to suffer because you don’t do things correctly?” Bonomi knew that if a pizza arrived cool, customers wouldn’t blame the delivery person, he or she would call the restaurant. “Every night there was something,” says Bonomi. “I can’t spend my life in the office instead of out front, just to fix your orders.”
The experience at the restaurant changed, too. “The kitchen would be slammed with tickets,” says Bonomi. “Delivery drivers would crowd the dining room and talking on their speakerphone, ruining the atmosphere for the diners. Then you are paying the company a commission on top of it.”
Fontana agrees that Grubhub started hurting his restaurant’s image. “We were calling customers, giving them gift cards, but it made us look bad. They weren’t mad at Grubhub, they were mad at Fry the Coop.” He got so fed up he canceled his Grubhub account, but even that was a hassle. “I called them and said, ‘We have to cancel. This is not working out.’ Next day, more Grubhub orders arrived.” Fontana says it took three weeks for GrubHub to finally take Fry the Coop off its service. “It was a nightmare,” says Fontana. He says that the drivers at Uber Eats have been much better, so he continues to use that service.
After restaurant dining rooms had to close, Steingold decided to get rid of all the delivery apps. “It’s been the best thing I’ve ever done,” says Steingold. “I realized that you can’t serve high quality food while giving up 30 percent. That was our issue. We could never sacrifice the quality.”
Steingold now uses an ordering app developed by ChowNow, which charges a fixed monthly rate, instead of a commission fee on every order. And he’s using his own delivery drivers. “We are now able to operate with a smaller staff in the restaurant, yet employ more people, because we use our own drivers,” says Steingold. “People who would have been laid off are driving now and making more money.”
Bonomi also decided to hire his own delivery drivers for Coalfire, so that he can make sure they are providing the right kind of service. “Our accounts are now better,” says Bonomi.
Graziano decided to get rid of all the third-party apps and create his own online ordering system. “I still don’t have the reach of Grubhub,” says Graziano. “But I don’t need the whole city. I need a good base.” For deliveries he uses a local delivery company. “Now when I sell a sandwich, I get 100 percent of that money,” says Graziano. “The customer pays the delivery fee and tips the driver. I don’t have to pay that.”