Why restaurant delivery apps like DoorDash, Uber Eats, and GrubHub are bad for restaurants (and a new alternative to them)
Greetings! Third-party apps offer convenience, comfort, and value, allowing restaurants and bars to reduce their overheads. Although apps like Uber Eats, Door Dash, and Grub Hub have expanded restaurants’ geographic reach and maintain their customer base, they are harmful to restaurants. Do you want to know why? Read on!
The Covid-19 pandemic has caused customers to demand food delivery services. Some businesses survived during the pandemic because they followed a food delivery model. Third-party delivery apps have played a crucial role by providing state-of-the-art online ordering platforms.
However, DoorDash, Uber Eats, and Grub Hub are not free. Although these apps have saved restaurant owners from hiring new employees to deal with driver insurance and vehicle maintenance and purchase supplies related to food delivery, here are a few reasons why these apps are bad for your restaurant business.
High Commission Fees
Because food deliveries comprise most of your restaurant business, the high delivery fees and service charges are problems for restaurant owners. The reason is that you pay someone else 20% to 30% of every ticket, including credit card fees and sales tax. Remember, this is often higher than handling these operations yourself.
Besides, your restaurant staff loses tips because they go to the third-party delivery person. For instance, if you rely on customers’ tips to maintain your employee salaries, you will have to increase salaries.
Some cities in the U.S, including New York, San Francisco, and Portland, have enforced commission limits on food delivery services, meaning you can negotiate with companies for lower fees. However, this depends on various factors, such as your cuisine, location, and customer volume.
When you list your restaurant with a delivery app like Uber Eats or DoorDash, it increases your visibility. However, these apps also increase visibility for your competitors. It means the app may display your restaurant next to your competitors.
Customers will have a choice to choose your restaurant or any other, depending on the location, rating, and price on the app. Likewise, if you have not implemented a solid marketing strategy, these apps will increase your competition, leading to decreased ROIs.
Lack of Control
Lack of control is another downside of using a third-party platform or app. Because brand reputation is an essential part of your overall marketing strategy, you may lose customers due to intense competition.
Similarly, food is out of your hand once it leaves your establishment. For instance, if the driver fails to secure the bag or takes a wrong turn, they could damage the food. If the driver is rude, the customer will blame you for it.
Research shows that about 80% of customers blame the restaurant for late delivery or cold food. Therefore, it is best to avoid these apps and implement a system for handling complaints yourself.
Reduced Customer Loyalty
Third-party delivery apps like Grub Hub and Uber Eats have a loyal following, and you can take advantage of this. However, there is no guarantee you can reach your target audience or maintain customers.
At the same time, using these apps can compromise your customer loyalty, especially customers’ loyalty that comes from knowing your specific chefs, waiters, and hostesses. Sometimes, customers don’t look at your restaurant name but focus more on the type and quality of food.
Therefore, if you want to promote loyalty and stand out in the crowd, you need to focus on your customers by offering a coupon or freebie for in-person visits. Besides, using these apps will prohibit you from communicating with your existing customers, preventing you from getting feedback, suggestions, and even appreciation for your staff and chefs.
Delivery Apps Alternatives
Although ordering from delivery apps, such as Uber Eats and Grub Hub, has become a day-to-day activity for many people, these apps do not help local restaurants. Instead, these apps are destroying restaurant businesses.
Chow Now is a reputable online ordering platform that helps local restaurants stay afloat during the Covid-19 pandemic. OrderBetter is an excellent alternative to food delivery apps and aims to educate consumers about the dirty little secrets of third-party delivery apps.
OrderBetter helps local restaurants to streamline their business operations and thrive amid the Covid-19 crisis. The platform offers:
- A flat monthly fee with no commission on orders
- You will own and manage your restaurant and customer data
- A responsive mobile app with customizable features for your restaurant
- Your customers can order via Google, Facebook, and Instagram
Apps like Grub Hub, DoorDash, and “Uber Eats” provide many restaurants a flood of customers during the Covid-19 pandemic. However, many restaurants look for alternatives due to the higher commissions these platforms charge.
These popular apps charge restaurants up to 30% of every order, which is not profitable for restaurants. Spread is a new platform that promises online ordering at a lower cost to restaurants, allowing them to arrange deliveries themselves.
Unlike these popular apps, Spread charges restaurants $1 per order, making it an affordable, convenient, and restaurant-friendly alternative to Grub Hub, Uber Eats, and DoorDash.
Moreover, 50% of the 150 restaurants on the Spread platform make their own food deliveries and set their delivery fees for customers. The delivery fees are much lower than Uber Eats and other apps, encouraging customers to place more orders. Therefore, we recommend using this platform to streamline your delivery operations and avoid hefty commissions.
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