When the reality of the COVID-19 pandemic set in, restaurants began leaning harder on pickup and delivery services, leaving the formerly thriving Tampa Bay food scene shaken to its core as a result. After hearing the cries of foodies across the country, UberEats announced free delivery for local restaurants in March, and said foodies rejoiced. As the weeks passed and concepts began to feel the financial burden of these apps, the toxic relationship between restaurateurs and delivery services have proven to do more harm than good in some cases.
Andy Salyards, owner of Urban Brew and BBQ in St. Petersburg took to social media on April 28, to announce his breakup with delivery apps.
“Corporate delivery service takes up to 30% of the revenue and a portion of that goes back to their corporate office—the money doesn’t stay local,” Salyards wrote.
The post went on to explain that Urban Brew and BBQ has launched its own delivery service through a POS system, Toast. This new method has allowed Salyards to put more employees back to work and have complete control of the process from kitchen to doorstep. Salyards urged fellow local restaurateurs to follow suit in cutting ties, saying “I honestly have nothing to gain if other restaurants start delivering themselves, but feel strongly that it’ll help local restaurateur scene survive and then thrive if we can take that portion of our business back from corporate delivery drivers.”
Food & Wine echoed that sentiment in its article, “It’s Time to Delete Your Delivery Apps.” The piece explains how apps like Grubhub, DoorDash and Postmates utilize “predatory practices” against restaurants including signup charges for the platform itself and high commission fees. The article also jabs at the fact that in a time when COVID-19 could prove fatal for concepts, delivery apps are only digging the hole deeper. Food & Wine says that until commission percentages are lowered, foodies should be on strike, “Until these apps actively start agreeing to commission caps, it's time to delete your delivery apps and let them burn.”
UberEats responded by saying, "Providing our platform and services to restaurants costs money—changing commission rates would force us to alter the way we do business, potentially hurting those we’re trying to help the most: customers, small businesses and delivery people.”
But delivery apps are a necessary evil for some restaurants.
“Obviously no restaurant loves giving away 30% of their sales to a third party,” Julie Curry, owner of Hall on Franklin favorite Bake’n Babes said. “However, if I wanted to offer delivery for the bakery, I would need to hire drivers, have insurance for those cars, etc.”
Curry also mentioned the difficulty in matching the quickness of UberEats delivery since there are hundreds of drivers ready at the drop of a dime. “On a Friday night when I have 10-15 orders at a time, I wouldn’t be able to have that many personal delivery drivers to get baked goods to your door in under 20 minutes.”
Furthermore, during this pandemic, Hall on Franklin has closed its doors, forcing Curry and her gang to operate out of Gen X Tavern in downtown Tampa.
“[UberEats] is a necessity for us right now ... We have a very organized system that allows zero contact between our staff and the delivery drivers,” Curry said, adding that customers have reached out to thank Bake’n Babes for being open during this trying time. “Some people don’t have cars, some are not leaving their houses, some are bribing their children who they are now homeschooling with treats.”
Too bad there currently aren’t Freak Shakes on the menu as a prize for finishing your homework.
“Whatever the reason, people appreciate the contactless delivery option from UberEats,” Curry explained passionately.
Although UberEats hasn’t lowered its commission percentage, it has added a feature allowing users to donate directly to the concept. While the time table for when foodies are able to have complete access to their favorite concepts without social distancing regulations is unclear, the necessary evil of delivery apps will continue to be utilized by concepts who are unable to deliver themselves. An Uber representative told CL that nearly $250,000 has been donated by users directly to locally owned, independent restaurants in the Tampa Bay area.
The rep also said that a recent update in UberEats operations allows restaurants to cash out their earnings nightly, rather than weekly. Having immediate access to the funds could prove to be an advantage for concepts struggling to pay employees, keep up with rent and other bills during this time.
But the pandemic has not only affected restaurants. On February 21 stock was trading at $40.72 USD. It started a slow decline, and reached the bottom of its pit on March 18 when it hit $14.82 USD. It was back up to $32.78 USD by May 14.
The publicly traded company uses fees paid by restaurants to onboard new delivery people (background checks, insurance costs, etc.) and maintain the safety of the platform. Expenses also go to marketing, and technology. Restaurants using their own delivery drivers pay only a 15% commission rate versus the 30% by utilizing UberEats drivers. Restaurants also have the ability to offer pickup orders through the app, without paying commission fees.
On Monday, some shareholders lobbed criticism at how much Uber CEO Dara Khosrowshahi is making as the company reacted to a drop in ride-sharing by announces the layoff of 3,700 full-time employees (roughly 14% of the Uber workforce, with cuts mostly coming from customer support and recruiting departments). Khosrowshahi said he would waive the rest of his 2020 salary, but salary only comprises a portion of his compensation, according to observer.com.
"...last year, he received a total pay package worth $42.4 million, comprising of that $1 million in base salary, $2 million in bonus, $37.4 million in equity award and $2 million in reimbursement for work-related expenses," the website wrote.
Still, to some, the ends justify the means, but when it comes to Salyards’ point about keeping such money local, one business has risen to the occasion to do just that. Enter Pineapple Pickup (PP).
The platform—which is a partnership between Big Sea digital marketing agency and boutique web development agency Pineapple Development—creates a custom Shopify store template, which allows concepts to take and streamline fulfillment of online take-out and delivery orders. Restaurant users are able to customize menus, set hours, communicate with customers and pull reports. Monthly fees include 7% of total pre-tax sales, as well as payment processing fees of 2.9% plus 30 cents per transaction.
“While restaurants are not operating at 100% capacity, we are offering special 7% pricing. Minimum $100 monthly platform fee, waived with monthly sales greater than $1000,” reads the Pineapple Pickup website.
PP offers various other perks like training, marketing guides and a help desk. Three Birds Tavern in the ‘Burg is one of its latest customers. But when comparing Pineapple Pickup to UberEats, the local app does not offer drivers. So concepts are still liable for getting insurance for delivery drivers on their own payroll.
So how can foodies help? Opt for pickup whenever possible, donate to the restaurant through the UberEats app, or grab a gift card. After all, what is any industry without a middle man? A pain in the ass, but nevertheless a necessary part of the operation.
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