Restaurants: The costs of instant gratification
“Consumers love food delivery,” said Heather Haddon and Julie Jargon in The Wall Street Journal. The only problem is that restaurants hate it. They increasingly depend on third-party sellers, such as DoorDash, Grubhub, or UberEats, to take orders and deliver the food; those platforms generally take a 10 to 25 percent cut of each sale. But “85 percent of consumers aren’t willing to pay more than $5 for restaurant delivery,” so restaurants usually can’t recoup those costs. A few restaurants have resisted the trend. The 500-outlet Texas Roadhouse steakhouse chain stopped a delivery test after “consumers complained that the food quality wasn’t good and that prices were higher than in the restaurants.” But most restaurants can’t ignore delivery and takeout. Those are now a third of restaurant orders, and the market is likely to grow from $25 billion today to $62 billion in 2022. Profitably getting orders to your door is a “thorny, expensive, and crucial puzzle” restaurants haven’t yet solved.
Ordering in is a “habit that can quickly and sneakily set you back hundreds of bucks a month,” said Joe McGauley in Thrillist.com. The average household in Seattle, for instance, spends $2,520 per year on takeout and food deliveries, the most in the nation. “Convenience comes at a cost,” said Melissa McCart in the Pittsburgh Post-Gazette. Delivery companies sometimes add an upcharge on top of a $3-$6 delivery fee, along with surge pricing at peak hours and tips. In Pittsburgh, where the typical family spends $199 a month on delivery, “it’s becoming common to see half-empty dining rooms” even as the staff races to keep up with delivery orders. Restaurateurs bemoan the trend. “I enjoy cooking and hosting and entertaining,” says one. “Delivery apps are taking that away from us.”
The “transformation of restaurants from a social sit-down space to just a kitchen that takes orders” is changing the way we eat, said Jessi Devenyns in The Austin Chronicle. A beautifully plated dish “must now fit into packaging that can be transported across town without losing its flavor.” Aesthetics may now take a back seat. Still, “for the lazy and hungry among us, on-demand delivery apps are nothing short of a miracle,” said Clint Rainey in New York magazine. Just remember “the people doing the actual delivering.” They often watch for the quirks of each restaurant, making sure you got all 10 chicken nuggets you ordered. But their pay is meager; for New York delivery worker Krista Gay only 27 percent of customers added a tip. Gay likes it as a side gig because she enjoys interacting with people. “But if I was relying on the money? Forget it, no way.”