Delivery App Fees Are Crushing Restaurants During Pandemic

COVID-19 has been a massive boom for food delivery apps like DoorDash, Postmates, GrubHub and UberEats. In fact, DoorDash just got the biggest valuation in its short history at $16 billion.

Since lockdown orders shut down millions of restaurants across the country and more people turned to food delivery to avoid going out, DoorDash’s sales have surged. The company now commands 45% of third-party delivery orders, way above UberEats (17%), GrubHub (17%) and Postmates (7%), according to CNBC.

But guess who's not elated by DoorDash's shiny new valuation? That's right: restaurants. 

Restaurant owners are downright pleading with the public not to use on-demand delivery apps because of the fees that they charge, which can be as much as 30-40% of each order.

John Stamos, owner of New York Greek restaurant Pitas and Sticks, includes this note each time a customer orders through Grubhub:

“Small businesses like us need your support in this time of crisis,” Stamos writes. “Online apps such as GRUBHUB ARE CHARGING US 30% of each order and $9 or more on orders made using phone numbers on their app or website … please help save the restaurant industry by ordering directly with us.”

Chef Ashish Alfred, a Maryland restaurant owner, says this:

“Look up your favorite restaurant, give them a call, see if they will deliver to you, and if they don’t deliver and you can’t leave the house, then do what you need to do,” Alfred told Marketplace.

The Kansas City Star has the full writeup.