Since the start of the COVID-19 pandemic, major publications have been talking about the rise of delivery apps. And no wonder: for a relatively small fee, they let us get our favorite food without leaving the house and feel good about supporting local businesses and delivery drivers. More than that, they now remember our favorite spots, our usual orders and our payment information, which makes ordering via apps more convenient than calling a restaurant. As a result of our addiction, the food delivery industry is projected to grow by 31% over the next five years, according to Morgan Stanley.
Delivery Apps’ Fees Are Crushing Small Restaurants
While large chain restaurants like Chipotle, McDonald’s and Starbucks are going to survive the COVID crisis, small independent coffee shops and family-owned restaurants are in danger. Though the relationship between independent restaurants and the big apps is ostensibly symbiotic, it is more complicated than that.
Since March, 65% percent of Americans have been ordering more takeout, with a weekly spend averaging around $67 for 2.5 meals. With indoor dining not being an option, most restaurants have to rely on takeout. Those businesses that did not offer delivery before the pandemic had to either work through food delivery apps or scramble to find drivers while missing out on business.
The fees restaurants then have to pay are very high, ranging anywhere from 10% to 30%. In April, a Chicago-based pizza restaurant owner posted a picture of the invoice he received from Grubhub. He sold 46 pizzas for $1,042.63 but had to pay $666.09 in commissions and fees. Another small business owner, whose restaurant offers its own delivery services, had to pay GrubHub $41,230.47 just for processing orders. In April, DooDash, UberEats, GrubHub and Postmates faced a class-action lawsuit over exorbitant fees.
There is an argument that ordering through delivery apps helps gig economy workers, specifically drivers. However, gig workers are in a poor negotiating position and ordering apps take advantage of this. In May, a DoorDash driver posted a screenshot of the $4.75 fee the service had offered him to deliver an order 10 miles away.
Should You Ditch Delivery Apps?
Food delivery apps do offer certain convenience, so whether or not to stop using them is entirely up to you. The best way to support local restaurants, bars and coffee shops, however, is to avoid third-party companies and place orders over the phone or directly through their website.
Ordering directly from the business might have other perks – lunch specials you wouldn’t otherwise know about, loyalty cards that make every 10th coffee free and the sense of community that comes from interacting with people in your neighborhood. You will also be saving money since delivery apps charge customers fees. If your favorite spot doesn’t offer delivery, opt for takeout and get it yourself, at least every other time.