Contents:

2 min read

    2 min read

    One of the trends that’s been accelerated by this pandemic is food delivery. For those orders, many people use third-party apps like DoorDash, Postmates, Uber Eats and more. Today, I’m talking with an expert on food delivery (he’s been on the podcast before – check out the show notes). We’ll be talking about app delivery fees – why are they so high?!

    Intro

    • Today I’m talking with Matt Newberg
    • Dive into what’s going on behind the scenes with all the fees
    • From all points of view – customers, restaurants, couriers, and the companies themselves
    • Plus, we’ll cover what cities are doing to limit fees and what options restaurants have to minimize fees

    Intro to Matt Newberg

    • Matt Newberg is the host and producer of HNGRY, a multimedia platform exploring the impact of technology on our relationship with food
    • Spend the last 8 years working in the tech industry as an entrepreneur
    • Focused on massive shifts in consumer behavior, including fungi-based meats and robot-powered grocery stores
    • Food delivery has come to the forefront

    Food Delivery Fees

    • Preying on weakness of restaurant owners
    • The model is broken, even though demand is growing
    • Would big restaurants join these third-party apps if not offered discounts?
    • 15% marketing and 15% delivery – charging around 30%

    What Options Do Restaurants Have?

    • Restaurants say these companies have too high of a take rate – what other options are there?
    • General lack of awareness around other options
    • Demand from consumers is for these companies – want to be convenient
    • At the end of the day, restaurants are making money with these apps – just not as much

    What Are Cities Doing About These Fees

    • San Francisco, New York, Seattle have instituted fees, at least during the pandemic
    • Impact – lowered demand
    • Delivery companies subsidizing some of the higher demand restaurants
    • Remains to be seen if customers will continue to pay higher prices

    Solutions for Restaurants

    • Vertically integrated markets, in some cases (Domino’s example)
    • Use different services and APIs – white label ordering platforms
    • Some restaurants are doing well with this, pivoting to different types of delivery
    • Virtual food court idea – a few different brands under one kitchen
    • Some restaurants are trying to fight this – stick to dining in

    Trends for Restaurants and Dining

    • Dining in – most likely not going to save restaurants
    • Same old, same old is not going to work
    • Think about bringing the experience to your customers
    • Forming partnerships with other businesses – bars, etc.

    Outro

    • Big thanks to Matt for coming on the podcast!
    • Keep an eye out for his new series on food trends (link in the show notes below)

    Show Notes

    Harry Campbell

    Harry Campbell

    I'm Harry, the owner and founder of The Rideshare Guy Blog and Podcast. I used to be a full-time engineer but now I'm a rideshare blogger! I write about my experience driving for Uber, Lyft, and other services and my goal is to help drivers earn more money by working smarter, not harder.

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