In May, Google launched a feature allowing customers to order food directly from a Google search with an “Order Online” button. Instead of sending you to a restaurant’s in-house delivery platform (if they have one), it sends you to partners like DoorDash and Postmates, which take a cut of your order from the restaurant. Getting the button removed from a restaurant’s Google results is maddeningly difficult. (Google may also send you to ChowNow, which charges a flat, monthly fee.)
This is frustrating to many restaurateurs. It’s also one of the many ways big tech companies and venture capital-backed startups and industry “disruptors” are cutting into the notoriously slim profit margins of restaurants.
Delivery platform Grubhub and its subsidiary Seamless take large commissions on all delivery orders placed through their systems. The higher the commission you pay to Seamless/Grubhub, the easier it is for customers to find your restaurant.
Grubhub sets up new phone numbers for restaurants that use its services, and if you use that number to call the restaurant and place an order, they take a cut. Even if the phone call doesn’t result in an order, the restaurant could get charged. To make matters worse, Yelp includes those Grubhub phone numbers on its own listings and takes its own little piece of the action.
Another tactic from Grubhub: buying up tens of thousands of domain names that are similar to restaurant websites as a way to siphon customers away from the owned-and-operated pages and toward the ordering pages where the commission will be made. They put the original restaurant’s menu and photo on their fake site, but when a potential customer clicks “order now,” they are directed to the Grubhub/Seamless page. If you order from that page via these “marketing” efforts, the commission paid to Grubhub is even higher. (The company defended itself in July by saying they did it on the restaurants’ behalf but discontinued this “service.”)
Of course there are more bad actors. It took months of driver complaints and multiple exposés for delivery platform DoorDash to actually pay drivers and couriers the tips meant for them. UberEats and Deliveroo are so focused on rampant growth they let vendors trade on their platforms without proper food safety certification. Scores of workers injured on the job and family members of workers killed while delivering in Mexico are pushing Uber Eats to take responsibility for the safety of couriers.
And just as a general matter: These companies, taken together, are using investor money to create a business where there isn’t one. Delivery shouldn’t be this cheap or free. But now we as consumers are trained to think it should be, because these companies are willing to eat the losses to create a market. Restaurants that want to remain competitive feel pressured to offer delivery, no matter the commission.
I’m sure these companies have changed many restaurant businesses for the better and exposed a whole world of restaurants to customers who wouldn’t have otherwise known about them. But I’d just rather not partake in this system anymore. So I’m going to take Seamless off my phone, call restaurants directly (making sure to cross-reference the number), and use delivery platforms owned and operated by restaurants when available.
And from now on I only tip in cash.
This week on the podcast
This week on Eater’s Digest, Daniel and I talk about the evolution of food in movie theaters and this week’s biggest stories.
Update: A previous version of this article implied that venture-backed delivery service ChowNow takes a commission. Instead it charges a flat, monthly fee.