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Food Delivery Apps Like UberEATS Are Hurting Restaurant Business

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In an article over at Tvo.org, analyst Corey Mintz has highlighted how popular food delivery apps like UberEATS, Foodora, DoorDash, Ritual, Just Eat, and many more, are hurting your favourite restaurants. The convenience that these apps bring to consumers comes at a high cost to restaurants, who are paying upwards of 35% commission on every sale.

Ubereats

Mobile apps allow hungry diners to get food from a wide variety of restaurants that don’t provide their own delivery, straight to their door without having to talk to anyone. However, not only does the food often arrive cold and cost more, when you order through food apps, restaurants take a major hit. 

When asked how much their services cost restaurants, Ritual and UberEATS revealed the range runs from 10% to 35%. UberEATs starts the highest, usually defaulting to 35% plus a $500 fee for the terminal. Some restaurateurs say they use these apps strictly for marketing purposes, hoping to break even on the high commissions while exposing their product to a larger audience.

“Uber is 30 per cent for us,” says Mollie Jacques, executive chef at Lambretta Pizzeria in Toronto. “And the app gets worse every time they upgrade; we now have no control over anything, and it is definitely losing us customers. Foodora is 25 per cent and DoorDash is a bit lower. Foodora has the best service. Doordash, we don’t make the food until the driver is in the door, as they are often so late the food is cold and we have to remake it.”

In 2015, California chain In-N-Out Burger sued Doordash in order to have their restaurants removed, with similar complaints now coming from restaurants in Ontario as well. 

To read the lengthy article in its entirety, click here.

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  • Joe

    Hate to admit it, but I’m guilty of this. I find it so much easier than going out in traffic to pick up food. The convenience of it is so awesome. But I do agree that restaurants and drivers are getting screwed and deserve better. Drivers should get an automatic tip for their gas money, and restaurants should pay way less than 35%.

  • So Young

    Its sad if uberEATS charge restaurants too much, but honestly, I love the service. Its even better than restaurants with their own delivery service. Its very quick, food is hot and drivers are cool… I’m really impressed with this kind of service.

  • Quattro

    You aren’t looking at the big picture. If you go into a restaurant, the restaurant has to account for the square footage you take up while in their restaurant. as part of their cost of doing business. That includes (hopefully) attentive staff to serve you. With delivery, those costs are GONE, plus the restaurant now gets more volume without having to increase real estate. It’s a big hit in listed price, but likely worth it.
    (I realize that this doesn’t apply to places that don’t have seating – but those typically have their own drivers)

  • Gerry Lee

    I had food delivered to me once while I stayed at a hotel during my visit when it was storming outside. Gave the driver a tip for him having to drive in that mess.

  • Olley

    don’t blame your insufficiency running a restaurant on customers. no one’s forcing you to join these apps in the first place. suck it up or get the fack out.

  • Dansk

    I love these services! Never had an order wrong because the waitress/waiter got it wrong, food always seems to arrive when it should! It’s always hot! The only person I deal with are the delivery people who are always super nice and chill! If restaurants are feeling the hurt it’s most likely due to poor in restaurant experience! Wrong orders, grumpy staff, long wait times for food or even just getting a basic drink sometimes.

  • Sam

    This doesn’t really make sense. These restaurants have to opt in to be part of all of these systems. If it is “losing them money”, then simply don’t participate.

    If it’s feasible for me to call the restaurant, make a take out order, and go pick it up myself in person, I still do that. People only pay the premium charged to use these services when that is not an option. Gaining new business with a 35% fee is surely better than no business at all? Otherwise why would any restaurant sign up in the first place?

  • Bafoon

    Also disagree with the article. The food is rarely more costly than the restaurant. Especially when you order during the discount periods. Yes some restaurants have delivery charges but that is offset by the amount of tip you dole out after your in restaurant experience.

  • Duncan Leung

    I understand these food delivery services are good for people who do not have the means or time to get to the restaurants. But I agree with the article that some restaurants want to get their name out there for marketing purposes. If their food is good, customers will come back for it. I am just afraid that there are so many options out there, the customer only differentiates by cheapest price instead of the restaurant name. When you take away the customer service and ambiance, what else is the restaurant going to compete with other than food quality, (which could be affected by the courier?)

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