Are Food Delivery Apps Helping or Hurting Restaurants?
With everything going mobile and online businesses soaring, food delivery apps are on the rise. Everything is going mobile, nowadays. People are shopping online instead of crowding stores, playing from their smartphones on stars casino instead of navigating to casinos, and ordering food through delivery apps instead of dining in. Even though food delivery apps such as UberEats, GrubHub, and Doordash are super convenient for customers, are these types of apps helping or hurting the restaurants that they’re partnered with? Keep reading to find out!
Restaurants Get Access to App’s Customer Base
When it comes to many ‘mom-and-pop restaurants,’ having access to new customers can be the difference between staying open and going out of business. When restaurants partner with these third-party apps for delivery, they are allowing their menu to be put in front of the eyes of millions of potential customers. Eyeballs equal income. Some customers may have never even heard of a restaurant or know what they offer, but come across them as they’re scrolling through UberEats and decide to order from them. So, when you look at it this way, the restaurants are definitely benefiting from partnering with delivery apps since they have the chance to reach customers they may not have been able to reach on their own.
Apps Introduce Restaurants to New Consumers
As mentioned above, when it comes to introducing a restaurant to new consumers, the best way is through the app. Many times, a customer is on the app looking to get inspired to place a food order, but they don’t know what they have a taste for or can’t make up their mind. Well, this is where being partnered with these apps come in handy. A customer may not even know about your restaurant or menu, but they see you on DoorDash’s app, decide your food looks tasty, and places an order right there on the spot. If you were not on that app, this wouldn’t have otherwise been possible, unless the customer was surfing your website. Consumers are always searching these third-party delivery apps for food that looks appetizing to them, and many of them end up ordering from new restaurants that they didn’t even know existed.
Apps are Charging Restaurants Outrageous Fees
As you can see, there are some benefits to restaurants partnering with third-party food delivery apps. However, those benefits may be outweighed by the amount of fees that these apps are charging restaurants. Most delivery apps charge restaurants about a 30% commission on every order, and many restaurant owners say these apps are slow to offer support or even pay what they owe many times. When ordering from these third-party apps many customers are not aware of the hefty fees that the restaurants are being charged. These delivery service fees are heavily cutting into already-decreasing profits for many restaurants. Many consumers feel that they’re doing good and supporting restaurants by ordering through these apps, when in actuality, the restaurants are not benefiting much. Sometimes, after fees are taken out, the restaurants are barely even profitable and most of the time, only break even on each order placed through these third-party apps.
Apps Not Using Restaurant’s Permission
Some restaurants are upset because they say they never agreed to partner with some of these third-party apps and they’ve ended up on the app anyways. Many Canadian restaurants are in a fight with Doordash because Doordash has been adding restaurants in high demand to their app for a ‘trial run’ without permission. Doordash never even contacted the restaurant, but emphasized that they always attempt to get in touch before placing restaurants on their app. This leads customers to believe they can get delivery from these restaurants who don’t offer it and never promised that they did. This oftentimes leads to customers leaving negative reviews on the app, which in turn leads to other consumers not wanting to order from said restaurant.
As you can see, there are many benefits to restaurants partnering with third-party food delivery apps. Food delivery apps were supposedly created to help save restaurants, but it looks like they’re charging such huge fees that restaurants are barely seeing a profit. Unless third-party delivery service fees massively drop, it will be difficult for restaurant owners to keep using them and stay afloat. Restaurants are a business and while they want to serve their customers, no business can survive if they aren’t profitable. So, while there are some benefits to partnering with delivery apps, restaurants may be better off reaching their own customer base and offering dine in and curbside pickup options if they can’t do delivery. Really, ordering directly from a restaurant’s website and/or app is the best way to help it keep the profits and stay in business.