As local restaurants are receiving more orders every day through apps like Skip the Dishes and Uber Eats during the pandemic, some are trying to educate their customers on the economic hit they take with every order.
Jason MacFarlane is the franchise owner of the Wimpy’s Diner in Guelph’s downtown. He said many of his customers don’t know that third party ordering platforms often take between 25 to 30 per cent of the total sale.
“I literally had someone ask me yesterday ‘how much do the delivery companies pay you for those orders?’” Said MacFarlane. “I had to tell them it was the exact opposite and they were shocked when I told them how much.”
MacFarlane said Wimpy’s has been offering local delivery for about 20 years using a local delivery service, but felt he had to get on board with the third party options due to demand.
“We are still using them, but we are trying to encourage people to call us directly,” said MacFarlane. “I don’t think people know how it all works.”
The more people who order through the third party platforms, the more a restaurant feels a hit to its bottom line.
“The more the word gets out there, the more people will understand it and back away from it a little bit,” said MacFarlane.
Last week, MacFarlane spoke by phone with Mayor Cam Guthrie and the two spoke about the third party services. Shortly afterward the mayor took to Twitter asking Guelphites to consider picking up their food instead of using services like Uber Eats and Skip the Dishes.
“I had just gotten off the phone with him 15 or 20 minutes before that, so it was pretty impressive that he jumped right out to that so quickly,” said MacFarlane.
In the video, Guthrie said he had heard the concern from a number of small business owners, while acknowledging that some people who are out of work because of COVID-19 have had to turn to driving for third party delivery services.
“I respect that 100 per cent, you have to do what you have to do,” said Guthrie in the video. “I just wanted to make sure you knew what the impact is on the small business owners.”
MacFarlane said that he doesn't want to see anyone out of work, but noted if there is always a demand for delivery people and if customers weren't using the third party services maybe the local delivery comanies would be able to support more drivers.
Did you know this???
— Mayor Cam Guthrie (@CamGuthrie) April 23, 2020
Here’s how we can give our local restaurant and food businesses an instant boost to their struggling bottom line! #SupportLocal pic.twitter.com/wyW5LKDsTB
In an email, an Uber Eats spokesperson said third party platforms like Uber Eats can be an important option for restaurants to generate revenue and some restaurants in Canada have seen an increase in orders through the service by as much as 30 per cent.
A Skip the Dishes spokesperson noted it recently reduced commissions by 25 per cent, which it said will give $10 million back to restaurants through commission reductions and order driving initiatives.
Both Skip the Dishes and Uber Eats offer a pick-up option through their app which eliminates any applicable delivery fees for their customers. They also both offer reduced fees to restaurants who choose to use their own delivery drivers.
In addition, Uber Eats recently implemented a direct contribution feature allowing customers to contribute directly to restaurants at check-out.
That is a nice feature, said Eleanor Reynolds, marketing director of Pitaland, which opened a new location in Guelph’s south end in the fall, but it comes with a catch.
Faced with laying off staff after the pandemic hit, Pitaland decided to create its own online ordering and delivery service, using its own employees.
“Literally overnight we put together our own delivery system, delivering our food with our own staff and our own drivers who otherwise would have been unemployed,” said Reynolds. “A lot of people are losing that social communication and we felt what could be better than bringing our team back on board and giving them work.”
