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On COVID’s First Anniversary, Restaurants and Apps Trying to Fix Rocky Relationship

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At least they are talking. (iStock/AntonioGuillem)

One of the more interesting dynamics to emerge from the pandemic in the past year has been the evolving relationship between restaurants and third-party delivery apps. So interesting, in fact, that local politicians have begun to take notice.

The apps of course simplify ordering for consumers who cannot or prefer not to venture out themselves. The National Restaurant Association reports that 70% of restaurant customers it surveyed ordered delivery, and 40% used a third-party service for their delivery.

For many restaurants, however, this arrangement is …. complicated.

“We just got our year-end financials back,” a Los Angeles restaurateur lamented on Instagram earlier this year. “Not only did we lose money [a given, pandemic and all], but to add insult to injury we spent $35,000 on delivery service fees this year.” This quote turned up in a Los Angeles Times article whose headline bluntly urged readers: “The next time you order takeout, call the restaurant.”

Another restaurant operator admitted that delivery apps were “begrudgingly crucial” to his business. “It’s hard to give away your hard-earned cash to a platform,” he told The Wall Street Journal. “But yeah, they’re keeping us afloat.”

“Love/hate” might be too strong of a term to describe the situation (we hope), but the situation clearly has risen to the top of any list of industry concerns during a tumultuous year. To try to fix this relationship, which to some might seem less symbiotic than codependent, the National Restaurant Association worked with major delivery apps such as Uber Eats and DoorDash to create “seven principles to guide public policy for third-party delivery.” The principles include declarations that:

  • Restaurants have a right to know and determine when and if their food is delivered.
  • Customers should expect the same degree of food safety from delivery as they do when dining in a restaurant.
  • Restaurants deserve transparency on fees (including commissions, delivery fees, and promotional fees) charged by third-party delivery companies.
  • Third-party food delivery contracts need contractual transparency, and issues surrounding fees, costs, terms, policies, marketing practices involving the restaurant or its likeness, and insurance/indemnity should be clear.

Since the list was published, “There has been some movement at the state level addressing some of the principles,” a National Restaurant Association spokesperson pointed out to Retail & Hospitality Hub. “There are now a half-dozen states or so that are considering or have considered legislation on requiring third-party companies to have consent or an agreement prior to delivering a restaurant’s food.

“There’s a bill about to be introduced in Texas, one in Missouri, this one in Virginia, one in Rhode Island, and likely one in Connecticut,” she continued. “Add that to California, Michigan and Louisiana, which have already passed these.”

Still, voluntary, non-legislated measures are usually preferred, and third-party delivery apps contacted by Retail & Hospitality Hub said they take restaurants’ concerns seriously. “The team at Uber Eats is committed to the restaurant community,” an app representative said in a statement. “That’s why we’ve worked to support the National Restaurant Association’s development of these principles that are designed to address the most pressing interests of the industry.”

“While we will always work hard to earn your business, we respect a restaurant’s decision not to partner with us.”

DoorDash CEO Tony Xu

DoorDash pointed us to a blog credited to CEO and co-founder Tony Xu. “We’ve heard the feedback and know we have to make improvements to earn and maintain partner trust,” Xu said. “One of our internal values is to be 1% better each day, and by staying true to the principles, we will end 2021 as a better partner and industry champion. We will continue to build upon these principles and remain focused on learning, growing and serving our community as best we can.”

The blog offered a point-by-point explanation of how DoorDash would support the seven principles. “We are committed to empowering restaurants to select the products and services that work for them because we know that no two restaurants are the same,” Xu stated. “We also know that some restaurants would prefer not to work with DoorDash. While we will always work hard to earn your business, we respect a restaurant’s decision not to partner with us.”

An unanswered question is how the relationship between operators and apps will evolve post-pandemic. But for now — and a good sign for any relationship — at least the principals are talking.

“This agreement represents an important first step in an ongoing dialogue between restaurants and third-party delivery companies about ways to improve our relationship going forward,” Mike Whatley, the restaurant association’s vice president for state and local affairs, said about the declaration of principles.

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