Ronan begging customers not to use third party delivery services

I agree with this post 100%. The tech companies applying big business tactics to take over the market is not fair to restaurants.

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:shrugs:

well they know they’re losing money on every sale, might as well sign up with every delivery company and make it up in volume

/s

My issue is that consumer demand is there because of the DD/GH/UE shady business practices. Those are what really helped them grab hold and insert themselves into the market.

Who wouldn’t want a convenient platform for restaurant searching and ordering? Oh wait, we forgot to tell you this is mainly possible because we exploit the restaurants on our platform? Have a coupon.

IMO this is a false narrative. DD/UE/GH came about first to offer consumers delivery from restaurants, for restaurants that did not offer delivery for whatever reason.

TBH and an an example, I don’t know why people order Prime Pizza from doordash given that Prime has it’s own in house delivery drivers. But if people are getting to Prime Pizza over it’s competitors because of prime placement in their app, to I believe Tailback’s point, there is value there.

This is me. I have done this exact thing on multiple occasions. Why? I am outside of their in-house delivery zone. Would I have chosen to get Prime Pizza those nights if they were not available via delivery on DoorDash? No.

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In this case, how does one argue that DoorDash/GrubHub/UE does not offer a service and expand the pie? They are offering delivery to a new set of customers.

Yea that’s how they started out but they grew to the size they are now by doing a bunch of shady shit. And when called out they act like they’re the victims because they got caught.

I don’t not think these services should exist but with their current framework the only way they can exist is by exploiting chefs. And I believe we shouldn’t ignore that just because we’re on the consumer side of the fence.

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Sounds like you and @ShadrackToussaint are both arguing that the third party delivery companies used their deep pockets to game the system–to shape consumer demand based upon a premise of artificially cheap delivery fees. If that is true, then that is wrong.

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I mean, couldn’t the chef just…not sign up with the service if they don’t want to lose 30% of every sale?

If it were possible for GH/DD/UE to offer their services at a lower rate, don’t you think they would to gain market advantage over their competitors? Those three companies are currently in very fierce competition. Postmates and Caviar have already been gobbled up.
Unless there is something akin to price-fixing going on, I am not sure that the service can be offered for cheaper.

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the simple truth here is that most customers refuse to pay what delivery actually costs - someone has to eat it - the restauranteur, the VC, the 1099 delivering the food…

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That’s easier said than done. People tend to choose convenience. And these days that’s apps on your phone that let you do whatever you want with a few button presses.

We give these companies power in exchange for convenience.

I think most chefs would call them a necessary evil.

That’s why they’re hope is after you’ve found the restaurant through the app you might like it so much you make decisions that still get you what you want but also better support the person providing you the service.

Also like I said above, chefs have spoken out about this for a while but it became more serious during the pandemic. When DD/GH/ UE sales were ~5% of total sales its not so bad but when they’re ~50 or ~75% of sales that 20% eats into or completely erases already slim margins.

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I don’t disagree.

But they refuse to truly acknowledge that reality when they charge restaurants fees that during these times basically eliminates the restaurants chance of turning a profit. They transfer their debts onto the chefs.

I have no desire to live in a ghost kitchen world

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I know a couple of restaurants that had steady business before the pandemic and never needed to use any delivery service. They were thriving on dine in and pickups. Then when the lockdowns happened, they were forced to sign up with the various delivery services just to be able to generate some revenue.

They’re still just limping along hoping to survive but at least they have enough business to pay their employees. They know how much margin they’re losing but it’s either that or not have any revenue coming in at all.

It’s not a sustainable model in the long run especially with landlords unwilling to give a break on leases. The loans are going towards the big costs like that and the business coming in via delivery just covers cost of goods and labor. At least their employees can survive.

I’d imagine that’s the case for many restaurants that have been forced to rely so heavily on these delivery services.

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Yes, fundamentally I see it as a monopoly issue. While I understand that these apps may grow the pie to some degree, I believe restauranteurs when they say the commissions charged make staying in business even more difficult, that they siphon off too much.

https://www.washingtonpost.com/outlook/2020/05/29/delivery-apps-restaurants-coronavirus/?arc404=true&itid=lk_inline_manual_1&itid=lk_inline_manual_20

https://www.washingtonpost.com/business/2020/07/09/uber-postmates-merger-will-only-deliver-bad-tiding-restaurants/

Haha you just won! Best post I’ve seen in a while.

Interesting

This is not the first time that @butteredwaffles @Ns1 and I have gone round and round on this. (But this is probably the most fruitful discussion. Thank you both. Also @ShadrackToussaint and @tailbacku)
Here is a link to my previous post about OLO hopefully turning the tides on “predatory” third party delivery companies.

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This.

Delivery services were just supposed to be incremental revenue. Now that they’re essentially forced to rely on these companies that have the user bases for any business at all when dine in is effectively completely shut down, it’s crazy to expect the high commission fees wouldn’t be detrimental to the bottom line because they don’t have their (previously) primary source of revenue.

The unfortunate thing is that the restaurant raising prices isn’t the simple solution. Unless people are specifically seeking out a particular restaurant, they’re going to be presented with tons of options and let’s be real, they still don’t want to pay a premium for food that comes in a plastic container. That stigma around paying more for delivery is a big challenge to overcome.

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Is it possible, though, that the 3rd party apps realized that, if they became the familiar “face” of on-line ordering, that most consumers would eventually “forget” that there’s the “real” restaurant’s website that might offer cheaper prices for the same items or where more of the $ goes directly to the restaurant (and thus funneling the vast majority of customers through the 3rd party).

And why bother using the phone to order directly from the restaurant when you can just use an app that’s on the same phone?

While I wouldn’t say that they are trying to shape consumer demand, I can’t help but think that they are well aware of consumer behaviors and use that to their advantage. Of course, every business “should” try to do that, but, for whatever reason, it just feels particularly gross in this situation. Maybe it doesn’t feel so gross to me in other situations b/c I’m not even aware of it.

A somewhat related point… On other, non-food related websites I peruse (which is heavily $ and business focused), there were some posters (and who knows how representative they are of the general population) that didn’t think mom-and-pop restaurants going under was a big deal. To them, food from cafe A is pretty much the same as the food from cafe B and, since that’s the case, there was no reason to care about restaurants going under since they’re a dime a dozen and easily replaced.

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