BIZ-FOOD-DELIVERY-DMT

Ordering food from third-party apps can hurt restaurants due to their already low profit margin.

Freshman year, my suitemates and I would religiously order Mr. J’s to our dorm every Sunday morning. Since freshmen aren’t allowed to have cars on campus, JoyRun was our go-to food delivery app. It made the boundaries of campus seem to shrink, as our comfort foods from Chipotle and Taco Bell were easily attainable. Even though the food ended up being more expensive, it was a small price to pay for when we were sick of D-Hub’s buffalo mash. 

Third-party food delivery apps have risen in popularity in the last couple of years. UberEats, Doordash and Grubhub are just a few of the options restaurants use for delivery. They do the most business in major U.S. cities like Los Angeles and New York City. 

In Harrisonburg, 88 restaurants list delivery services through Doordash. Some of these restaurants are small businesses like Urgie’s Cheesesteaks and Taste of Thai. The extra cost customers are paying for their cheesesteaks and pad thai are also being taken from the restaurant too. This is hurting small businesses and customers shouldn’t use these apps.

Now, New York City is taking a stand against one delivery giant Grubhub. In June, the New York City council’s small business committee spoke out against Grubhub’s high commission fees. Third-party delivery apps tend to charge restaurants between 15% and 30% for their services. When profit margins for restaurants tend to hover at 6%, the additional commission fees can hurt them. 

One complaint by Tiffin Indian Cuisine, a chain in Philadelphia affected by the fees, has called for a federal investigation. Restaurants claim that Grubhub is charging them extra fees for phone calls that don’t result in orders. Grubhub gives the restaurants it works with a special phone number for delivery orders. These calls are supposed to be monitored by an algorithm that can conclude if an order is placed or not. According to some restaurant owners, they’re being charged up to $9 for calls that don’t result in orders. 

Unlike UberEats which charges a flat rate, Grubhub has also been criticized for charging higher commissions for better visibility on platforms. An increase in online exposure makes it hard for restaurant owners to reject extra fees. The hope is that by gaining a customer through a delivery app, the customer will dine in next time. 

Third-party delivery apps have also been subject to data breaches. In September, Doordash announced it was targeted by hackers who stole 4.9 million people’s data from the app. For those who use multiple delivery apps, this puts their personal information in danger. 

Legislation should be passed to help protect restaurants from being charged high commission fees by delivery apps. Until this happens, restaurants should hire in-house delivery workers so they don’t have to rely on an app while still offering a delivery service. 

Customers should also stop using delivery apps and call restaurants directly to inquire about delivery services. If one doesn’t feel like waiting in a restaurant, they should ask for takeout instead. Some restaurants even offer special discounts for ordering take out. 

While delivery is a convenient service, it’s not worth it to negatively affect one’s favorite restaurant. 

Allison Baxter is a media arts & design and communication studies double major. Contact Allison at baxte2ae@dukes.jmu.edu