Civil Eats: Restaurants Are at the Mercy of Delivery Apps, but Can they Survive the Pandemic Without Them?

June 23, 2020 Media

Abdelilah Souada stopped using Grubhub in February. After working with the delivery app on and off for over a decade, the owner of Pizza D’oro in Washington, D.C., says he had “had enough” of Grubhub’s rising commissions and fees. In the worst months, he says, he was paying the company as much as $10,000.

And then COVID-19 turned the restaurant industry upside down. Luckily, Souada already had delivery drivers on staff and just enough time to build up his online presence. “We suffered the first month, but we’re back in business again,” he says. “We’re doing whatever we can and we’re not going to let the big guys crush us.”

Unfortunately, this hasn’t been the case for most restaurants. Many major outlets have reported that restaurants reliant on delivery apps for business are collapsing under their commissions, which range from 15 percent and 40 percent, and can even reach as high as 60 percent of every order. “I don’t know how other places are doing it,” Souada says.

The complaints go on and on, from stories of costly unexplained refunds, misleading promotions, cold food, poor tech service, and of course, ballooning fees. This is all to say nothing of the plight of delivery app couriers, who have been sharing harrowing accounts of grueling routes, costly glitchesgarnished tips, and boom-or-bust pay with no guaranteed minimum wage.

Maureen Tkacik, an author of a recent delivery app exposé for The Washington Post and fellow at the American Economic Liberties Project, argues that these subpar and exploitative relationships with restaurants, delivery workers, and app users suggest that these delivery apps’ have skewed priorities.

“There’s no way in which they do a good job—because they’re not trying to,” Tkacik says. “They’re trying to disrupt and monopolize the space.”