To app or not to app– forhungry diners and restaurant owners, this is the question.
Since the start of the coronavirus pandemic, food delivery apps like Grubhub, Uber Eats,DoorDash, and Postmates (which was recently acquired by Uber)have found their way onto more smartphones than ever before. DoorDash alone nearly tripled its revenue in the first nine months of 2020 when compared to 2019, and many people who lost their jobs during the pandemicfound work as drivers for third-party delivery services.
But what's good for the customer can be bad for an owner'sbottom line, as the apps charge participating restaurants hefty commission fees.
"I don’t think you will be able to find any independent restaurant that likes or appreciates these third-party services," said Amy Costa, owner of Cluck'n Crabs in the Manahawkin section of Stafford. "We all resent them in some way because we pay 25% to 35%on each order, but we have had to find a way to work with them– even at zero profit margins – to compete."
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For frequent DoorDash customer Christine Jay of Freehold Township, theconvenience of using the apps keeps her coming back.
"I hate (its impact on) businesses financially, but the ease of having the app and my credit card on file has hookedme," said Jay, who uses the service two to three times per week."We also like that we can easily order from multiple places at once. My daughter won’t eat sushi, so we get her fast food."
Alexandra Boyer-Coffey of Brick has used the apps a few times, but "only if a particular restaurant doesn’t offer delivery or only offers it through DoorDash,and I learn that once I’ve already ordered.
"I actually actively try not to use them, as they often take a large cut of the order," she said. "I prefer to order from the local restaurant directly and let them pocket the entire profit.
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'A necessary evil'
For Costa, using delivery apps is a way to keep her restaurant at the front of customers' minds.
"We have noticed that consumer behavior is changing, and that customers now look on the third-party apps to see who is deliveringinstead of ordering directly from their favorite places," said Costa, who owns Cluck'n Crabs with her husband, John. "If we are not on these apps, we start to miss out on orders that we might have previously received.
"As a small business owner, we find that the third-party apps are a necessary evil," she said.
Costa hopes that once Grubhub, Uber Eats and DoorDash customers try her food, she can convince them to forgo the appin favor of the restaurant's own delivery service.
"They bring us customers that we wouldn’t ordinarily receive, which provides us with an opportunity to convert them from Grubhubor DoorDash customers to actual Cluck’n Crabs customers," said Costa, who includes a "We Deliver" business card with each third-party delivery order.
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Omer Basatemur, owner of Kaya's Kitchen in Belmar, began using DoorDash to deliver his vegan and vegetarian meals whenthe pandemic closed restaurant dining rooms nearly a year ago.
"We never delivered before," said Basatemur, who also ownsKaya's Cafe in Asbury Parkand Plated Plant in Princeton. "That's helped out a lot, even though it's not ideal from a business owner's (perspective). It keeps customers happy, keeps it easier to order."
For Deepak Sharma of Haldi Chowk Authentic Indian Cuisine in Middletown, delivery apps help him capitalize on his location in ahighly populatedarea.
"When we started out,we used to do delivery," he said. "But it never mattered how many drivers we had: Someone called out, or if they went 5miles one way and then for the second delivery, 10 miles, that customer usually got upset."
Negative experiences like this, he said, affected online reviews.
"So even though they take a chunk out (the price), it doesn’t interrupt the flow," he said of the apps. "I always have drivers, and customers' orders shoot straight to the kitchen printer."
'Brutal for businesses'
Doug Stehle, owner and chef of Cavé Bistro in Avon, doesn't offer delivery. He doesn't like putting his food– pan-roasted duck breast, braised short ribs, crispy sea bass– in takeout boxes, something he has had to do during the pandemic.
But he says he really doesn't like the tactics Uber Eats, DoorDash and Grubhub employ to bring restaurants on board, from aggressive salespeople who do not understand the food business – especially its small margins – to linking their apps to his website without his permission.
"I was approached about two years ago (by Uber Eats) to join their launch of their service in the Jersey Shore area," Stehle said. "I almost pulled the trigger, but then we really started crunching numbers and found that while yes, we would definitely be busier, at what cost?
"We work way too hard and put in a lot of passion to have some third-party company take a piece of any of it," Stehle said. "I am completely soured on any of them, and we are doing just fine without them."
Moving forward
In late June, nearly four months after the pandemic shuttered restaurant dining rooms in New Jersey, Gov. Phil Murphy signed legislation that capped third-party delivery fees at 20%. Officials inHoboken and Jersey City went even lower, setting a limit of 15%.
The cap willcontinue until three months after the end of the current state of emergency.
“Third-party services are no longer fringe experiments, but rather a mainstream piece of the restaurant business,”Assemblywoman Aura Dunn (R-Morris, Somerset) said last summer. “For all their hard work to keep afloat, this cap helps those restaurants stay in business.”
In January, California-based DoorDash announced to help restaurants affected by the pandemic. The money will be distributed in grants of $2,500 and $5,000 to restaurants that show a loss of more than 30% of their business.
In an emailed statement, Grubhub said it offers options to restaurants, from using the company's tech to offer online ordering to a marketplace that helps diners discover new restaurants and only generates money for Grubhub when orders are generated.
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"We know these are tough times for independent restaurants, and we’ve devoted hundreds of millions of dollars to support restaurants since the start of the pandemic," the statement read.
Early on in the pandemic, Chef James Avery of The Bonney Read in Asbury Park predicted the pandemic would call attention to issues that affect therestaurant industry – like the reality behind the easy-to-use apps.
"It shed light on things," said Avery, adding that he is not against third-party apps but thinks they should be priced appropriately. "I think the best thing to come out is that these third-party apps are literally taking every dollar of profit from you. Right now, the relationship is completely one-sided."
Sarah Griesemer joined the USA TODAY NETWORK New Jersey in 2003. Send restaurant tips to sgriesemer@gannettnj.com.
