Third-Party Delivery Apps Have Independent Restaurants In A Stranglehold

We've written a lot about third-party food delivery apps, particularly in recent months, given the increased use of Grubhub, Uber Eats, and DoorDash amid coronavirus isolation. While such apps are seeing record numbers of customers, independent restaurants are struggling to stay open, in part due to crushing app delivery fees. While this seems quite unfair (and it is), some have asked: Okay, so why don't restaurants just ditch the apps? The Los Angeles Times has asked that question of several local restaurateurs. Their answer is a question: Got any better ideas?

Take one Hollywood restaurant owner. In March, she got 93 orders through Grubhub, totaling to $6,626 in revenue. From that, GrubHub skimmed off $1,208 in commission, a $592 delivery fee, and $230 in processing fees, totaling to over 30% of the revenue. That's just one example. Per the Times, there's no standard percentage that Grubhub takes, but it floats somewhere between 20% and 30% for most restaurants. For an industry with razor-thin profit margins, that's a ton of money.

But what other choice do restaurants have right now? Consumers can't dine in, and many feel wary about even going to restaurants to pick up meals. Many independent restaurants can't shell out for their own delivery drivers or the legal hassle that comes with having them. So, while they're getting gouged by third-party apps, owners see them as a "necessary evil" to stay afloat during the COVID-19 lockdowns.

"There's no such thing as profit," Marc Canter, the owner of Canter's Delicatessen, told the Times. "Take the word 'profit' out of the conversation. I think everyone is working at a loss – the question is, how big."

The L.A. City Council is considering a motion that would cap those delivery fees at 15%, which would be a huge boon for restaurateurs. In the meantime, or if you're not an Angeleno, consider skipping the middleman by ordering directly from the restaurants you love.