COVID-19

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

Jasmine Garsd Apr 16, 2020
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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
Share Now on:
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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

When does the expanded COVID-19 unemployment insurance run out?

The CARES Act, passed by Congress and signed by President Donald Trump in March, authorized extra unemployment payments, increasing the amount of money, and broadening who qualifies. The increased unemployment benefits have an expiration date — an extra $600 per week the act authorized ends on July 31.

Which states are reopening?

Many states have started to relax the restrictions put in place in order to slow the spread of COVID-19. Although social-distancing measures still hold virtually everywhere in the country, more than half of states have started to phase out stay-at-home orders and phase in business reopenings. Others, like New York, are on slower timelines.

Is it worth applying for a job right now?

It never hurts to look, but as unemployment reaches levels last seen during the Great Depression and most available jobs are in places that carry risks like the supermarket or warehouses, it isn’t a bad idea to sit tight either, if you can.

You can find answers to more questions here.

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