You’ve probably seen and heard about how the hospitality industry is in turmoil thanks to the coronavirus pandemic. Perhaps you’ve been doing your part to support your local Houston bars and restaurants, ordering takeout food and beverages as often as your wallet can justify.
But are you hitting a few buttons in your Grubhub/Uber Eats/DoorDash/Favor app to schedule a delivery? Or are you calling in your order directly to the restaurant? This choice makes all the difference.
In a critical period where restaurant sales are already down from lack of dine-in business, third party delivery apps can take up to a 30 percent cut from takeout orders.
“Right now, everyone is running on such thin margins—a lot of people are doing specials, discounts and there’s not much left. Everyone can use that 30 percent. It makes a big difference,” said Alex Au-Yeung, Chef-Owner of Phat Eatery, a Malaysian street food restaurant located in Katy Asia Town.
“We really don’t make money when customers order from Uber Eats,” echoed Stephanie Rich, owner and chef at Verdine. “If they’re taking 30 percent, we have very little margin to work with. There’s no way we’re going to make money if everyone does to-go orders through Uber.”
In addition to shaving already thin margins, third party delivery services can add the extra burden of dubious technology systems and arduous communication channels that can lead to poor customer experience.
“We only have DoorDash right now and we’re having issues—the tablet they gave us isn’t working, so I have to check email every couple minutes for new orders,” said Au-Yeung. “By the time I see the email, the driver might be here already and we have to crank out the food right away.”
Last year, Phat Eatery had partnered with a number of third party delivery apps, but they had so many issues that they eventually cut them all off.
“For example, someone might place an order and ask to sub broccoli for yu choy, but we don’t have broccoli—so we have to call DoorDash, who calls the customer to explain the situation. DoorDash then calls us back, and on the weekends, we don’t have time for the back and forth,” said Au-Yeung. “With late pickups, by the time the customer gets the dish, the quality is poor. Though lately, the driver show up time has been very quick for DoorDash.”
Rich has been seeing similar issues with third party delivery services.
“We got rid of DoorDash,” said Rich. “Not only are they charging delivery commission, but they also charged $5/week for the tablet that never held a charge—in less than 6 months, we had to replace it 2-3 times. We weren’t getting a lot of customers through them.”
Rich says they also curated Verdine’s third party delivery service because having three tablets going off while also trying to balance in-person customers and customers calling in direct takeout orders was too hectic.
The good news? The choice of third party delivery app can make a difference. For example, Verdine currently offers delivery through both UberEats and Favor. But on their website, Verdine requests that customers use Favor if possible.
“A few weeks ago, Uber had a huge media splash about waiving delivery fee for independent restaurants. What this really means is delivery fee for the customer is waived. They didn’t give the restaurant a deal; the 30 percent we pay is roughly the same as what the customer pays, so we’re absorbing the loss,” said Rich. “Uber’s theory is that the free marketing with low delivery fees will incentivize people to order from you more. I have a hard time buying into that. If Uber Eats was really worried about helping independent restaurants, it would have customers continue to pay delivery fees and waive commission for restaurants.”
However, Rich favors H-E-B-owned Favor for its superior customer support and delivery method (involving a physical person placing an order rather than another tablet), as well as the fact that Favor has rolled out a temporary commission fee-eliminating program for all independent restaurant partners in Texas.
“Customers expect you to have a delivery option in this day and age and I don’t have the infrastructure/wherewithal to do delivery myself. I don’t mind outsourcing but you just want it to be a little more fair,” said Rich.
And in terms of why calling in your takeout orders directly to the restaurant will benefit you? A tailored experience, for one.
“Customers should order directly with us through our website as we can form a much more tailored experience than the third parties can for our specific guests,” said Trent Patterson of Dish Society.
Plus, at Dish Society, there’s no order minimum via their direct delivery, and you can also order virtual farmers market items exclusively through their website and not through third party delivery—a benefit several other restaurants share.
Last Friday, San Francisco Mayor Breed gave an emergency order to temporarily cap 3rd party fees to 15 percent as long as shelter in place is in effect—a move that many restaurants in Houston could benefit from. To support this move, consider signing this letter from the Texas Restaurant Association. Addressing third party delivery issues in particular, the letter includes two requests to Texas mayors: one to cap delivery fees for restaurants on third party delivery and one to prevent third party delivery companies from charging surprise or hidden fees.
How you can help:
– Sign the Texas Restaurant Association letter
– Keep ordering takeout and gift cards from local, non-chain restaurants
– Order directly from the restaurant whenever possible (ESPECIALLY if you are planning to pick up anyway)
– Sign up for virtual cooking classes offered through local restaurants and organizations
– Use pop up farmers markets or mini in-restaurant “bodegas” for your grocery shopping. Examples locations include Local Foods, Dish Society, Goodnight Charlie’s and Bernie’s Burger Bus, which all offer items like fresh produce, eggs, meat and more
– TIP GENEROUSLY!
– Since you’ll likely be eating at home, consider asking for no utensils to prevent excess waste
This article appears in Jan 1 – Dec 31, 2020.
