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The Big Business of Food Delivery
Once reserved for a cozy night in watching Netflix or a long day at the office, delivery from our favorite restaurants — along with virtual gatherings and the news — has become our critical lifeline to the outside world. While we are busy trying to get our families fed and lift our spirits with cocktail and wine deliveries, these businesses are not only trying to nourish us, but to stay open and keep as many employees on the payroll as possible during COVID-19 restrictions.
While restaurants are facing collective losses in the billions, according to a recent survey from TopCashback.com, 35 percent of Americans are ordering more food for takeout and delivery than they were a month ago. “We are seeing a big increase in to-go orders, which includes our contactless pickup and delivery,” SUGARFISH Co-Founder Lele Massimini told the Courier.
While it’s tempting to stay at home and use one of the many apps available for food delivery, it’s important to know that they aren’t all created equal. Some are charging more fees to the restaurants than others (in addition to what is being charged to the customer), up to 30 percent, which is especially onerous to the already- vulnerable restaurant community. So, when you see that “no delivery fee” offer it usually means the app passes the charge onto the restaurants.
“We prefer direct inquiry as it saves the commission to Postmates or the apps but it means customers need to pick up versus delivery,” said Andy Brandon-Gordon owner of Nerano in Beverly Hills. The restaurant has been offering daily specials on food, mixed cocktails and 50 percent off wines since the virus shut-down.
A recent article in Food & Wine claimed that we should delete all the apps if we really want to help restaurants but that might be going a bit too far. If it’s impossible to leave the house to pick food up, it’s better to order through an app than not at all. But, be informed about your choices.
Chef Ei Hiroyoshi (formerly of Sasabune’s Beverly Hills location), recently launched a delivery-only concept called Skinny Fish. The focus is on a selection of bowls and rolls made with sustainable fish and locally-sourced veggies. Instead of traditional sushi rice, he’s using a handmade cauliflower rice.
“I never imagined I’d be introducing Skinny Fish during a global pandemic. My team and I went back and forth about delaying, but decided that we’re in a unique position to contribute to the community. People need nourishment, people need to stay home, and people need to work, including the vendors who supply our fish and produce, and we can help support all three,” he said. Chef Hiroysoshi is currently partnering with Postmates, UberEats, and DoorDash to be as widespread as possible.
In contrast, Akasha Richmond, whose namesake restaurant in Culver City is doing a robust delivery business, has canceled all delivery apps. “They take such a large percentage,” she told the Courier. “We are using our own drivers who wear gloves and masks. We practice social distancing at pick-up with a table outside, limiting the amount of pickups per hour, and we wear gloves and masks all day,” she added.
In the past week, the Mayor of San Francisco cracked down on delivery app fees, instituting a cap at a of no more than 15 percent. Hopefully, other cities like Los Angeles could be next with other apps following suit. There are rumblings of Grubhub lowering fees but that still remains to be seen.
Until then, DoorDash will reduce commission fees for local restaurant partners by 50 percent on both DoorDash and Caviar, which was acquired by Doordash in 2019. This commission relief program will benefit more than 150,000 local restaurants in the United States, Canada, and Australia from now through the end of May. This estimated $100M from the company will help merchants respond to the acute financial threats they are facing right now.
Tony Xu, CEO and Co-Founder of DoorDash said in a statement, “We have already invested more than $15 million in combined commission reductions and marketing efforts, and we’ve seen restaurants across the country generate millions of dollars in incremental sales—revenue that has been vital to helping them keep their doors open during the first weeks of the coronavirus crisis.”
Some restaurant owners and chefs are finding a workable solution with an Apple booking site called Tock. Formerly an aid for securing a table at a favorite restaurant, it is now a to-go app for pick-up and delivery that only charges three percent commission. Local fans include award-winning Jordan Kahn’s Vespertine in Culver City and Eric Bost’s Auburn in Hollywood.
So, before pushing send on your phone app, decide if you have the free time to run out in your sweats and pick the food up yourself. The consensus amongst the smaller establishments is that it’s best to order direct if possible. The money, including tips, goes to their staff. Request contactless pick-up and they will pop the food in your trunk. Think of this as our new drive-thru.
And, for those who might be stretching the budget with lots of ordering out, here are a few tips to keep in mind.
Get Social — If you have a favorite restaurant or two, follow them and/or the chef on Instagram. They will let you know not only what they are cooking up for the day, but what the specials are and which delivery services they are using.
Go Family Style — Many restaurants are now offering the traditional in-house family meal, typically reserved for staff before the nightly shift, to patrons. These meals usually serve at least four and generous portions mean leftovers for the next day.
Buy a Gift Card — Consider this an investment in the future of dining out. Some gift cards offer great two-for-one perks. A gift card also might help to keep someone employed (some restaurants are donating 50 percent of the profits to their employee-funds) and you can use it for a special occasion or gift it to someone in need.
Shop Around – You toggle back and forth between Uber and Lyft for the best deal when you need a ride. Delivery service apps are no different. Postmates, DoorDash, Grubhub, Caviar, UberEATS and Tock are currently servicing our city. Depending on your location, order size, and the time of day, a discount might be added.
Check for Introductory Offers — Some apps offer free delivery for your first order or incentive percentage discounts for repeat business. Some credit cards are also offering perks such as points or cash back for ordering from different partner-apps.
Invest in a Subscription — Some of the delivery services offer a onetime monthly flat fee if you’re ordering a lot of take-out, it will save you money over time. Check out newcomer ChowNow that lets you order directly from your favorite eatery on Instagram for a monthly fee, and they apparently are not charging restaurants.