- Delivery and takeout are most Americans’ only option for eating out during the pandemic.
- But there are better and worse ways to order delivery.
- Business Insider spoke with five restaurant owners to find out what they want customers to know about ordering delivery and takeout during the pandemic.
- Visit Business Insider’s homepage for more stories.
Delivery has become the new normal for restaurants across America.
Stay-at-home orders and restrictions on non-essential businesses have forced the restaurant industry to enter unprecedented territory. Now, every operating restaurant in the country relies on takeout and delivery.
As a diner, you should still order delivery and takeout if you can. But there’s a right way to do it.
Business Insider spoke with five restaurant owners about what their biggest struggles during the pandemic have been, and delivery was a recurring theme in all conversations.
Here are the five biggest things restaurant owners want you, the customer, to know about ordering delivery and takeout.
Ordering directly from restaurants instead of through third-party delivery apps is much better for business.
Third-party delivery platforms typically take a large commission fee from restaurants. Doordash just slashed its delivery fees in half, but those still amount to about 15% of each order. Other delivery platforms take as much as 30%.
And when you order through third-party platforms, the restaurant can also lose out on tips. Altogether, losses may be as high as 45%, according to Jeremy George, who co-owns Smokin J’s in Poway, California with his brother Josh. “Its absolutely less profitable,” George told Business Insider.
Canlis, the Georges, and the Ghanems have all chosen to re-employ waitstaff and other non-kitchen employees as delivery drivers. “We decided not to go for the third-party apps because we needed to keep as many employees working as possible,” Ghanem said.
Hugh Acheson, who owns three restaurants in Atlanta, Georgia, cites delivery apps as a reason he refuses to do delivery.
“I don’t have a cool bone in my body for many of the delivery services,” Acheson told Business Insider. “I think they’re charging exorbitant fees and not really putting their best foot forward. And I can’t put my own people in harm’s way.”
It’s also generally cheaper to order directly from restaurants.
Not only does ordering direct equal more money for the restaurant, but it could also mean more money for you. Restaurants typically charge smaller delivery fees than third-party services, as well as lower prices, since they’re not losing a large portion of their profit to commission fees.
“You’re actually spending 20-30% less when you order direct,” Abhishav Kapur, co-founder and CEO of Bikky, a data-driven marketing startup for restaurants, told Business Insider.
And a new class-action lawsuit filed against Grubhub, Doordash, Uber Eats, and Postmates, claims that the fees they charge restaurants has forced restaurants to raise their menu prices.
Small orders can actually lose the restaurant money.
One of the main reasons third-party delivery is less profitable is that typically orders that come through are smaller. Many restaurants have a minimum order that ensures each order is still profitable.
“People tend to order less through those things,” George said. “We’re getting a lot of small orders, which we’re not used to.”
Canlis has limited his delivery offering to family meals — a common move among restaurant owners. Making, packaging, and delivering food takes much more effort than it used to with increased security measures and restrictions in place.
The restaurant is also in charge of when orders go out, so that drivers don’t have to constantly scurry around town. Instead, they’re able to send out meals efficiently, with a focus on safety
If delivery becomes the new norm permanently, the kind of food restaurants serve will change.
Some foods transport better than others, and that reality has forced many restaurants to limit their menu offerings while they operate solely for takeout and delivery.
Eric Chan, the owner of Jade Garden in Seattle, Washington, advised a friend who owns a sushi restaurant to switch from cold to hot food.
“Raw food is pretty hard to do,” Chan told Business Insider. “So he thought about closing this restaurant, and I told him, you have hot foods. Why don’t you curate and develop a lunchbox with teriyaki chicken and a couple hot dishes?
Ghanem told Business Insider that she and her husband have had to trim the menu at Saladelia for the time being. And George said that even though Smokin’ J’s has always been a takeout-oriented business, he believes a larger shift to delivery will change restaurant food for the worse.
“If these online delivery services are able to take over throughout this, it’s going to force restaurants to produce cheaper food in order to still make money cause because they take such a large cut,” George said. “Restaurants might not offer their full menu on these delivery sites. They might just be offering the larger profit margin items. So you’d have a marketplace saturated with lower quality, less interesting food.”