LANSING, Mich. — Many in the area are looking to support local businesses and restaurants during the pandemic. But, the way people are ordering from restaurants have them picking up scraps.
Business is starting to sizzle again at Good Fellas Bagel Deli in downtown Lansing. The breakfast sandwich shop named after the popular 1990 mob movie, had just launched at the beginning of 2020 when the pandemic hit. The spread of the virus forced owners Adrian Joseph and Nate Parisian to close their doors for about a month.
They've since reopened, slicing toasted bagels with cheeses and meats. The pair are as busy as ever in their small kitchen, but to meet demand and the changing climate, they've now added delivery platforms to their business. The apps are something they can't wait to stop using as soon as the pandemic ends.
"This one is the second-worst, and that's the worst one," Joseph says as he points to the mobile tablets that collect and relay orders from UberEats and Grubhub.
For Joseph and Parisian, 50% of their business since the pandemic has come from these delivery apps. Some apps offer a better deal to the duo than others. But in an industry with already slim margins, a fee on every order that can reach up to 35% is a killer.
"When you get busy on these things, you're like, 'shoot we're making money', but then you go back and look at it online and it's like 'oh, woah! They chopped everything!'" Joseph exclaims.
While food delivery apps like UberEats and Grubhub charge restaurants anywhere between 20 and 35% service fees on every order, customers don't see that fee written anywhere on their orders.
A simple solution for restaurants would be to raise the prices shown on the app. But the delivery companies request restaurant owners not to have higher prices online than they do in the store.
Over in REO Town, Saddleback BBQ owner Travis Stoliker is fed up with the apps too. He's ready for customers to understand that getting up and getting the food yourself, or ordering directly from their website is the best way to help a local place.
Recent advertising campaigns by both UberEats and Grubhub suggest that they are supporting local eateries. UberEats offered free delivery (to the customer) on purchases from local restaurants. Grubhub has a television spot where the company claims 'restaurants are our family.'
"People are waking up to this realization that, 'man I really thought I was doing my best to help these restaurants.' For instance, Grubhub is advertising saying that's what you're doing, but in reality it's not really happening like that," Stoliker says.
Stoliker says a really well-run restaurant has a 20% profit margin. But if a restaurant is losing up to 35% on every order to a delivery platform, "it's just not a fair relationship,' Stoliker adds.
So what if you don't want to be on an app? Too bad apparently. Stoliker points out that his BBQ menu just showed up on an app one day, without his consent.
Grubhub told Fox 47 that they started adding restaurants to their marketplace without restaurant approval in late 2019. The company explained that they do it because, "this is a model that other food delivery companies have been doing for years as a way to widen their restaurant supply, and we’re trying it as well to create a level playing field."
Stoliker understands the lack of desire by consumers to come to the store right now. But the illusion that buying food on these apps is helping local businesses is misguided.
"If you want to limit your contact that's totally understandable," Stoliker says. "But if you buy directly from our website, directly through the phone, then all of that money is staying in the local economy and going to the restaurants that you're trying to help."
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