Beauvine Burger Concept has started managing delivery service for some of its takeout orders in house.
Mealtimes, like coronavirus updates, keep on coming, and with restaurant dining rooms shuttered, delivery services are booming. In the crowded online ordering arena, national players Grubhub, DoorDash and Uber Eats dominate, and with local underdogs Chop Chop and Quickness RVA also duking it out for dining dollars, how do restaurateurs feel about losing up to a third of their total sales to fees when their profit margins already hover in the single digits?
Beauvine Burger Concept breaks down the numbers on a 4-by-5-inch flyer attached to delivery orders that they manage in house with the headline “Save Money & Support Local!” A table illustrates how a $13 burger and fries jumps to $19 when delivered through a third-party app. Restaurants raise their menu prices on these platforms to offset lost revenue, and then delivery and/or credit card processing fees are added, though Uber Eats and DoorDash are currently suspending some delivery fees. Salting the wound, the restaurant also loses additional dollars on each order in commissions for these online food brokers.
A flyer from Beauvine Burger Concept breaks down the cost to consumers of ordering through third-party delivery services.
Patrick Stamper, an owner of En Su Boca and Beauvine Burger Concept, says that using the services causes him to operate at a loss. After San Francisco Mayor London Breed temporarily capped delivery service commission fees at 15% earlier this month, DoorDash announced 50% commission reductions for existing customers nationwide, placing its fees at 15% to 18% rather than up to 35%. Stamper says his restaurants have yet to receive the discount.
"These apps provide something we can't, a silky-smooth [process] that is consumer friendly, showing all the choices in an area," says Stamper, noting, "it's hard to go back the other way now that the tracks have been laid."
Co-owner Kelsey Aiken says she knew she had to change Beauvine's delivery operation after Gov. Ralph Northam’s stay-at-home order forced restaurants to offer takeout only. She says, “In-house delivery was definitely something we wanted to implement after seeing the amount of food we were delivering through third-party apps and the amount of money we were giving away to faceless companies.”
Managing delivery orders in house where possible also allows them to keep more of their employees. “We weren’t able to really make the jump until the lockdowns. We knew that doing in-house delivery would allow more of our staff to continue working,” she says.
Aiken was using local delivery service Chop Chop prior to the pandemic, but says she stopped because it didn’t provide the volume to make the arrangement profitable.
“The percentage made from each sale was greater with Chop Chop — [we] only lost about 20% of the sale versus 30% — but the weekly revenue generated wasn’t as high as [with] the other apps,” she explains, adding that the restaurant still uses DoorDash and Uber Eats due to their familiarity among consumers.
But most importantly, “We now have the ability to deliver ourselves,” Aiken continues. “We’re going grassroots with our approach: word of mouth and through paper flyers. So far it’s been working.”
Aaron Burnley, owner of Branch & Vine in the Fan, prefers local services Quickness and Chop Chop for deliveries due to his business' small staff and lack of funds to hire a dedicated delivery driver. He accepts orders via national services to increase his market visibility and capture sales but says, “DoorDash and the other big guys keep the fees hidden. I want to push these big companies out of here.”
Burnley’s advice: “Call Branch & Vine directly to order. Ordering through apps raises your bill over 30%."
Both Chop Chop and Quickness RVA allow Burnley to call them directly and place orders for his customers, preventing an $11 dollar chicken pesto sandwich from more than doubling in price after taxes, commission and delivery fees when ordered through Grubhub (which has temporarily eliminated its $3.99 delivery fee).
Quickness RVA, a bicycle courier service, is an elder in Richmond food delivery with 10 years in business. Manager-rider Alex Bangs offers restaurants a choice of paying 15% of each sale or a $4 delivery fee, but accounts must decide which payment route they want to take in advance, not at the time of sale. The company also offers a third plan: “Big Herms has us on a retainer — $15 a day, like a traditional courier service. It works out well for him and for us.”
Andrew Roberts, service and support manager for point-of-sale and IT company RVA POS, works with about 70 restaurants, many of which utilize third-party delivery services. He says some customers prefer to make their own deliveries when possible, citing brand preservation. “They don’t want to worry about food arriving cold, incorrect orders, or food getting squished or spilled in the passenger seat,” he says. “When orders arrive inedible or incorrect, the restaurant picks up the bill, not the service.”
At The Greek Taverna, owner Toula Panos' husband, Gee Suleymanian, delivers within a 3-mile radius, in comparison to the 5-mile radius of their delivery carrier, Grubhub.
“Grubhub lets me turn off their drivers as an option,” Panos explains, “so we can make the deliveries that come ... through their app, but they still take commissions and add a delivery fee. It costs us 19% of the sale to fill a Grubhub order when we deliver the food. When they deliver it, it costs us about 28%.”
Like Beauvine Burger Concept, The Greek Taverna does not charge for delivery, and tipping is optional — gratuities offset gas expenses and are shared with front-of-house staff.
Chris Chandler, owner of Chop Chop, says the national services haven’t done anything to help the businesses that really support them — the restaurants. Chop Chop charges a lower commission fee, roughly 20% of the subtotal, with no credit card processing fee and a $3.99 delivery fee that can be waived currently with promo code "SAFETY."
Chop Chop has made deliveries for free, with drivers working for tips when Branch & Vine had large out-of-area orders, to help out during the pandemic. Unlike many national companies, Chandler doesn’t charge a signup or marketing fee and is planning a T-shirt fundraiser through local company Bonfire that benefits the Holli Fund, which aids Richmond restaurant employees.
Roberts says local delivery options costs restaurants the least amount of money, but the bottom line is, “Ordering directly from the restaurant is best."
Click here to see our tips for supporting the local dining industry as well as a frequently updated list of closures and reduced/revised service at area restaurants and breweries.
