How much do restaurants make when they use a delivery app service?
Giuseppe, a consultant and owner of small business Chicago Pizza Boss, published a picture he claimed was of a Grubhub invoice earlier this week that appeared to show just that, indicating one restaurant made under $400 from orders totaling $1,000, underscoring the high fees charged by delivery apps and revealing the harsh reality for restaurants according to Newsweek.
The image featured an order summary for March, indicating the app took hundreds of dollars in commission, fees and promotional costs from the unnamed outlet.
He wrote on social media: "Stop believing you are supporting your community by ordering from a 3rd party delivery company out of almost $1,100 of orders. Your restaurant you are trying to support receives not even $400. It is almost enough to pay for the food."
Guiseppe who said the invoice was obtained from one of his clients, used the image to campaign for a fairer system to be used by the delivery apps. We have seen similar mandates from citities and states across the US as the charges from delivery apps are becoming transparent – and to some shocking. And there is little doubt that as these companies, many that are backed by VC dollars who have never shown a profit are likely to fall by the wayside.
Guiseppe’s post attracted hundreds of comments and around 2,000 shares on Facebook.
According to The Guardian, Grubhub is one of a handful of firms enjoying a spike in use during the novel coronavirus pandemic that has shuttered brick-and-mortar businesses across the country. The delivery app has reportedly received up to 15 times the usual number of memberships.
An UberEats blog post mid-March confirmed delivery fees were being waived and it was launching "daily dedicated, targeted marketing campaigns" for users. Doordash said last month it was cutting commission fees by 50 percent for orders until the end of May.