Third party delivery services got a lot of restaurants through the pandemic. When lockdown started, any food service that didn’t offer delivery and takeout had to find a way to start those channels quickly. Soon, though, more restaurants found that they would rather open their own service than pay the hefty commissions often associated with third parties.
But even if you got off the apps, trouble might not end there. Multiple restaurants report that third parties like Uber and Grubhub continued to list their restaurants without permission. They order by proxy and pick it up like a regular delivery. But does this hurt sales?
Image by mohamed Hassan from Pixabay
Why Not 3rd Party Apps?
Restaurants who use their own channels have more control over the experience. If food arrives in poor quality or takes a long time, guests will take it up with you—not the 3rd party. In this competitive market, it’s especially important to address problems quickly and efficiently, or else you risk negative reviews and lose loyalty. Restaurants have reported even further issues like old menus being uploaded and incorrect prices. This makes it tough to stay competitive, particularly if you offer rotating seasonal menus that rely on what’s in-style.
Meanwhile, this hurts staff too. Instead of receiving money from tips, it goes to outside parties. Restaurants have a labor shortage, and you want to nurture better job satisfaction, not frustration over lost wages.
Some restaurants had this problem continue even after phoning in about it multiple times, too. If they aren’t putting themselves on the apps willingly, and they can’t take themselves off of automatic sign-ups, what are restaurants supposed to do?
Restaurants Find Even Ground
It’s hard to fight the will of a major company, who has much more resources and time than local eateries. That’s why restaurants have felt so powerless in the past. Now, New York state may outlaw the practice of listing restaurants without clear permission. Noncompliance could cost 3rd party apps as much as $1K per day, per restaurant. They may also face additional legal action from individual restaurants. It has a serious effect on their brand and success, particularly during this tenuous recovery period, and they have a right to be mad.
Early in the pandemic, states passed temporary emergency measures to help restaurants that didn’t have takeout or delivery, but needed it to survive. They capped commission fees on 3rd party platforms so that restaurants could use them to grow new sales channels. However, all these temporary laws will soon expire. Restaurants are simultaneously pushing to either expand these support services or at least make the fee structure more transparent when they sign up.
In response to all this, 3rd party apps replied that they’re working on making communication clearer and more accessible. Restaurants who do find issues, from unwanted listings to incorrect menu options, can then fix them quickly. Still, without state-enacted protections for small businesses, restaurants have to rely on the apps’ word. Instead, small businesses are pushing for legislation that provides long-term solutions. They need protection throughout the recovery period and beyond.
