Earlier this week, Food and Wine unleashed a scathing article on multi-million dollar funded delivery apps like Grubhub (Seamless), Postmates, UberEats, or Doordash (Caviar).
Amidst the pandemic, there has been a resurgence of supporting small businesses in NYC. While consumers think that they’re supporting local restaurants by ordering delivery/takeout — the apps are taking a WHOPPING 20 – 30% commission from restaurants (which are already struggling to survive). The struggle is felt across all businesses, included famed restauranteur, David Chang of Momofuku who said he had to lay off over 800 employees from his 16 restaurants this past week.
RESTAURANTS BY THE NUMBERS
- New York restaurants accounted for $51 Billion in revenue last year and over 865,000 jobs or 9% of all employment in the state.
- Over 50% drop in restaurants spend since late March compared to 2019
- New York received $20 billion of the $350 billion in the Small Business Administration’s emergency coronavirus relief fund. The funds ran out within 5 minutes of launch.
While many apps have stated that they’re “deferring fees” from small businesses…restaurants will still be on the hook for those fees later on. Sadly, experts think that 75% of restaurants won’t be able to survive this pandemic.
In response to the fees, a TJ Hyder, manager of Benny’s Burritos stated:
“Our margins are minuscule, we only do delivery because our restaurant has been doing it for 30yrs…on average we see about a 3% profit in deliveries from using the apps if there’s no increase in product costs in imported items like avocado”
While apps like Postmates, Doordash, and UberEats send their own delivery personnel, some business owners have stated that it’s the only way to offer delivery since they do not have any staff at their restaurants. Additionally, for couriers, it’s a way to make money. Seamless and Grubhub however, only offer “exposure” to their 3 million+ customer base.
TJ Hyder responded,
“It’s a double-edged sword, but they do not have to charge these ridiculous rates because the guests end up paying for it. Many restaurants increase each product price on their menu by $1-$3 in order to survive these ridiculous commissions charged by these companies.
Meanwhile, in San Francisco, Mayor Breed dropped a 15 percent cap on commissions from food delivery apps. Grubhub in return, dropped this tone-deaf email to its users asking people to repeal the cause.
New York could follow in SF’s footsteps with a 10% cap, but no word yet. All in all, there’s no pretty answer. While yes, you can delete the apps, you might be f***ing over some businesses that don’t have delivery people or access to the audience or couriers in need of work.
Chef/Restauranteur Sean Olnowich had this to say:
“To abandon the apps is basically shooting yourself in the foot. Stick with the apps, try to steer people more towards Doordash / Caviar, and encourage people to push their local city council members, Mayor, local congressman, etc to push the bull through to put temporary caps on the delivery fees”
Here’s how you can you actually support small businesses
- Call up the restaurants and order DIRECTLY from them.
- Buy merch or gift cards for future use.
- Donating to a restaurant staff’s Venmo or GoFundMe, or a fund to feed frontline workers.
- Or by calling your representative (If the restaurant is only selling via delivery apps, Caviar seems to be the fairest option.)
Here’s a list of some restaurants still open and offering delivery/takeout options in Chinatown, and Flushing.
On a positive note: Some restaurants are finding clever ways of staying in business and doing good. A restaurant in Brooklyn kept its lights on by partnering with a senior citizen home to prepare meals for over 400 seniors who have to remain indoors. Spots like Regina’s, 886, Ho Foods and more are using donations to prepare foods for hospital workers.
