'Here To Stay': Restaurant Owners On How Pandemic Has Increased Third Party Delivery Service Usage

Jun 8, 2020

 

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As dining restrictions in the wake of the coronavirus pandemic closed restaurants across the county, many customers turned to online delivery platforms, such as grubhub, or doordash in order to continue eating from their favorites spots. As take-out became the new norm and safety precautions increased and restaurants were forced to adapt.

 

“COVID has changed our business model at the restaurants by creating a model that is solely predicated on takeout and curbside, like a lot of businesses. Plates and glasses and everything is disposable because you don't want people clearing plates off of tables as you slowly reopen your dining room. In addition to chemicals and having additional staff to clean areas, we've had to go to a paper only product. So all of those costs have increased incrementally based on just those three things: labor, cleaning supplies and packaging supplies,” said Thomas Kreitlow, the founder and owner of Pulp life kitchen, a health food restaurant with three locations in the Salt Lake area.

“Long term, I think what will happen is you'll see more people doing takeout, I don't think people will be dining in more. I actually think the inverse is true. I think people will dine in less and they'll take their food to go more often. I think third party deliveries are here to stay,” said Kreitlow.

Despite the popularity of online delivery platforms, these platforms do not always fare well for restaurants. Moudi Sbeity is the co-founder of the Modern Lebanese Cuisine restaurant Laize, also located in Salt lake City, and said in some cases these delivery platforms can cut into profits.

“I do appreciate the service that they provide. I think their fees are a bit high because restaurants run on thin margins as it is, so when they take 30% of our sale that really cuts into our profits at that point, but we also don't really have much of a choice. Even if a person orders on grubhub  comes and pick-up the food themselves, grubhub still takes a percentage of our sale,” said Sbeity. 

Kreitlow shared the same sentiment as Sbeity. He said these third party delivery services argue the reason they take a 20%-35% cut of sales is because their platforms help restaurants increase their sales. 

“If you talk to doordash, or Uber Eats or grubhub or any of them, they'll tell you listen, this is an incremental sale. So we're bringing you new sales since you already have the labor there, and you're already paying your overhead really, it's only the cost of goods that you're having to bear,” said Kreitlow.

Another issue with third party delivery services, Sbeity said is when there are issues with orders, it isn’t clear where customers can direct their comments or concerns too, which hurts customer relationships.

“If a Grubhub driver comes in and grabs on an order and they either get into traffic or something happens or they go and decide to pick up someone else's order before they drop off the first one, or even tamper with the food when customers leave a review on grubhub they're not reviewing grubhub they're reviewing us,” said Sbeity.

But despite these issues, both business owners agree that being on third party delivery apps seems to be necessary when weathering the storm of COVID-19 regulations. However, Kreitlow said despite the challenges the pandemic has created for restaurants, it has also improved his business. 

“We have learned a lot of lessons about how to become more efficient and how to provide a better experience for our customers," Kreitlow said. "We learned that when you can eliminate the need to conduct a transaction at the register, it's really beneficial from an operational efficiency standpoint. We were able to release our own app in conjunction with the actual beginning of COVID. And so we were able to kind of migrate a lot of our customers over to that platform. We've created a pickup area by the front door, that's something that will remain even post to COVID because it's just more efficient."