A restaurant owner went on a viral rant about how terrible DoorDash is. To bastardize Winston Churchill, though, delivery apps are the worst form of business for a restaurant except for all the others. The problems laid out in the video are real:
- Restaurants charge higher than menu prices because DoorDash and other app delivery services take so much of the order value. They are charging the consumer and the restaurant, both sides of the transaction.
DoorDash charges restaurants 15%, 25%, or 30% commission on delivery orders, with pickup at 6% for qualifying partners, while consumers separately pay delivery and service fees. (Large national chains will negotiate separate pricing deals.)
- Drivers are rude and restaurants are busy dealing with ‘real’ customers when the runner arrives.
- The food doesn’t get delivered at the same quality it’s prepared, sometimes because of pick up delays and sometimes because of poor handling by the driver enroute to you. And the restaurant gets blamed.
Here’s the rant:
North Carolina high-end restaurant owner sounds off about DoorDash
by
u/lowkeysciguy in
restaurantowners
Personally I loved the rant set to Phil Collins, “In The Air Tonight.” But as one commenter on Reddit observes, the video ending right before “one of the most iconic drum solos of all time” was “cruel.” The other best takes:
“Short of disability or trauma… stop ordering a private taxi for your tacos.”
“If I had a nickel for everytime I have used door dash I would have no nickels because I am not dumb.”
“Yeah is doordash holding this man hostage forcing him to work with them? Where is this man? Is he safe?”
Ultimately the restaurant owner is right about margin pressure and loss of quality control. But if delivery is degrading their brand, continuing to participate is an odd business choice.
They could offer their own delivery service instead, but then they’d incur those expenses and would give up the DoorDash distribution platform – consumers who see the restaurant in the app and discover it, bringing them incremental business they’d never otherwise see.
And treating orders as an annoyance and a distraction from serving their ‘real customers’ is probably a mistake. The people ordering delivery and eating their food are their customers. They will decide whether to order again. They’ll tell their friends whether the place is any good or not. And they may even be the same people who come into the restaurant in person. They might like it so much that they want it even when they can’t show up for a sit down meal.
A real problem for the restaurant though isn’t just the economics. App delivery is challenging because it’s terrible for everyone involved.
- The drivers are very poorly paid. These services offer far less than they did 8-10 years ago.
- This is expensive to the restaurant, which is what the video is complaining about.
- It is expensive to the customer (assuming an added 30% – 50% versus eat-in and you aren’t consuming service
- The food is also not as good. Many types of food do not travel well, those that do still need to be packaged correctly, and handling usaully isn’t high quality.
But for a restaurant the person doing the order really is a customer of the app, and not their customer. They do not get contact information from the customer. They do not establish a marketing relationship. They do not know who is it!
These services do have value, but it’s very specific. Restaurants usually run profit margins of 3% – 5%. Taking 30% of an order is tough. But most of the restaurant’s costs are fixed. If they can fill in gaps in orders without hiring additional staff, they’ll earn more than their food cost. They’ll keep staff busy and employed, positioned to make money on dine-in. And they’ll introduce themselves to new customers as well.
Convenience. More restaurants near me deliver themselves again and opt out of DoorDash or uber delivery and just pay and pass on a user fee because of it. Everyone is used to being nickeled and dimed. Or in this case dollared and five dollared.
But hey… Chase credits…
I only use it if someone gives me a gift card otherwise no. I’m too much of a cheapskate and between the delivery fees and increased menu costs, it just isn’t worth it. I usually just call up a restaurant, place a to go order, and go pick it up myself.
I am going to interpret DoorDash as standing for the various services that operate in various countries (Uber Eats, Deliveroo, Just Eat, Skip the Dishes, etc.). The question is, why do customers use it if they don’t get value from it.
The answer is: we do. When I go onto Skip’s website or app, I have a food search service. I can search by cuisine, by location, or even by dish! I have a convenience service (I don’t have to go outside when it’s raining or snowing). I have a translation service (when I order in foreign countries): I don’t have to understand the menu and the person taking my order doesn’t have to understand me.
I agree that some food does not travel well. I never order a hamburger via a food-delivery service. I love lamb biryani delivered right to my door; that travels well.
Why do restaurants keep using it? Because they want to be found? It’s like the question from the 1980s, why advertise in the Yellow Pages?
Why do drivers keep accepting drives for these services? Because they don’t need a lot of skill or experience to get these jobs. Also, when comparing Uber to Uber Eats, you don’t have to deal with people in your car.
You may not like DoorDash, Gary, but I love Skip the Dishes. I pay a monthly subscription fee, in exchange for which I become a preferred customer, pay no delivery fees, and earn points towards free food. It’s the free market and it tastes delicious.
I always thought DoorDash’s target market was stoners and other people who didn’t want to put pants back on to get food.
It sucks but I gotta justify my high fee credit card.
Sitting back and collecting money, thats what DoorDash, Uber eats, whatever is doing. They do not spend the profit margins increasing customer/restaurant relations. Heck, even if you manage to get someone on the phone, it is outsourced. It is a necessary evil and the only improvement would be for a lower percentage of the meal but we know those greedy pigs will never do that.
It’s because of the silly coupon credits. That’s it. I prefer to pick-up myself anyway. DoorDash, Grubhub, Caviar, Seamless, whatever the silly service name, Uber/Uber Eats. Slightly prefer Lyft these days for rideshares (usually cheaper). But, depending on the market, Lyft could be the problem. It’s all a mess.
Never used it or any similar services. I don’t plan on ever using them.
@Gene — And you got rid of most of the cards that would force you to use ’em anyway, right? (Friends, Gene may be onto something…)
No not “everyone uses Doirdash. Many of us never have and never will, period. Why do some use it? Mostly they are simply too lazy tobgetbdressedcand journey out of their basement and into a restaurant. Thevsame ones who wear their pajamas all day, no showers, oily unwashed hair all day and get angry when their boss says, no, you want a job then get up, get showered, get dressed and COME INTO THE OFFICE AND WORK!! Slothfullness OF THE YOUNGER generation, pure and simple.
Raphael Solomon, many take those jobs as second jobs or because they can’t find any other work. I don’t know of very many drivers who like the job. They actually lose money with gas, maintenance, car wear, and insurance.
First of all it is a convenience service. Yes you pay more to have something delivered but there are times it is worth it from a situational standpoint if not from a bottom line cost. It is all about an informed consumer making the right choice under the circumstances. If you are broke and this is a leak in your budget maybe you should eat out at all. As for restaurants, yes they complain but, as you noted, it is an outsourced delivery system as well as marketing. I’ve tried many local restaurants I otherwise wouldn’t have known about except for finding them on Uber Eats or Grubhub. The alternative for the restaurant is don’t do delivery or do it themselves, both of which have business implications.
The ones that probably benefit the least are the drivers but no one is making them work for Uber Eats, Grubhub, Instacart, etc. If they don’t think the pay is enough find another job.
Overall if these companies didn’t fill a need in the overall restuarant supply chain they wouldn’t exist.
doordash can be convenient when buying big.. but not for small stuff.. I was in El Paso overnight , my flight got in late and just about all the nearby restaurants were closed. fortunately doordash was available. unfortunately I wasn’t starving. I placed a small order from a place 3 miles away..
it almost cost me double ( +87%) the regular price when you add the fees and tip.. the good news is, I didn’t have to wait 8 hours for a bite to eat.
Welcome to the world where businesses and their contractors/partners chase cash flow by converting their own assets/brand value into cash flow even at longer term personal expense for doing so.
The restaurants are hooked to online sales as they want to get closer to maxing out on capacity utilization of their capital and labor resources even if it doesn’t help with improving their profit margins. That they also risk undermining their reputation with messed up or slow deliveries doesn’t seem to bother them too much, as they can just point the finger at the delivery companies instead of owning the issue.
Theres local restaurants in my area that charge same menu prices on uber eats/doordash and I use it for pickup orders. Same places actually add a 3 to 4% surcharge for using credit cards when ordering directly so using these platforms actually makes it cheaper in these cases! This is poor business planning for the restaurants that do this since ultimately costing them more.
When the costco giftcards at 20% off were available, made for even sweeter deals.