COVID-19

“Delete the delivery apps,” say restaurants hard hit by COVID-19

Jasmine Garsd Apr 16, 2020
HTML EMBED:
COPY
Food delivery orders have doubled since the COVID-19 outbreak began, according to the website Yelp, Angela Weiss/AFP via Getty Images
COVID-19

“Delete the delivery apps,” say restaurants hard hit by COVID-19

Jasmine Garsd Apr 16, 2020
Food delivery orders have doubled since the COVID-19 outbreak began, according to the website Yelp, Angela Weiss/AFP via Getty Images
HTML EMBED:
COPY

Chef Ashish Alfred owns several restaurants in Maryland. He said he’s never had a problem with delivery apps — he just saw them as bringing in extra business. Then the COVID-19 pandemic hit. Alfred now relies solely on delivery. And, he said, with apps like Seamless and Grubhub that charge as much as 40% in fees, “It’s a huge, huge chunk of our money. Especially because people are just, for the most part, using this money to pay their staffs.”

According to the website Yelp, food delivery orders have doubled since the outbreak began. Many restaurants are closed. Business is now almost entirely delivery. And tension is growing between the restaurant owners and the delivery apps.

A class action lawsuit filed earlier this week alleges that companies like Grubhub, Uber Eats and Postmates charge restaurants exorbitant fees, which, in turn, force restaurants to hike prices up for people who dine in. 

Postmates and Uber Eats did not respond to requests for comment. Grubhub declined to comment.

Now Alfred is one of many restaurateurs asking customers to delete those apps.

“Look up your favorite restaurant, give them a call, see if they will deliver to you, and if they don’t deliver and you can’t leave the house, then do what you need to do.”

Professor Douglas Miller of Cornell University understands some of the difficulties small restaurants are having right now but, he said, they have bigger problems than app fees.

“For most independent restaurants, [it’s] very small margins,” he said. “So I think them being closed is a bigger issue than using apps.”

Still, Rutgers University associate professor Rebecca Givan said this crisis might shake up the entire food app industry.

“We’re at a critical juncture where one of the questions is whether these companies will be able to continue essentially ignoring all regulations, whether we’re talking about monopolies and price gouging or whether we’re talking about how workers are treated,” she said.

This week, San Francisco enacted an emergency cap of 15% on delivery apps. Several New York City lawmakers are pushing for a 10% cap.

“The mayor and the governor have the power to shut down in-house operations of bars and restaurants during an emergency, so they should be able to use those same powers to institute a cap on those delivery apps,” said Justin Brannan is, a New York City councilman.

Plenty of restaurants won’t make it through this economic crisis. Brennan said there’s no need to squeeze them even harder. 

COVID-19 Economy FAQs

New COVID-19 cases and deaths in the U.S. are on the rise. How are Americans reacting?

Johns Hopkins University reports the seven-day average of new cases hit 68,767 on Sunday  — a record — eclipsing the previous record hit in late July during the second, summer wave of infection. A funny thing is happening with consumers though: Even as COVID-19 cases rise, Americans don’t appear to be shying away from stepping indoors to shop or eat or exercise. Morning Consult asked consumers how comfortable they feel going out to eat, to the shopping mall or on a vacation. And their willingness has been rising. Surveys find consumers’ attitudes vary by age and income, and by political affiliation, said Chris Jackson, who heads up polling at Ipsos.

How many people are flying? Has traveled picked up?

Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.

How are Americans feeling about their finances?

Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.

Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.

Read More

Collapse

As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.

Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.

Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.