Money Matters: Do delivery apps help or hurt restaurants?

May 24, 2019 11:00

Sponsored by NEFE

Fast food is now just a click away. Any number of mobile apps and services make it easier than ever to get any type of food from any type of restaurant – even those that don’t traditionally deliver – to your door.

That must be good for restaurants, right?

The ease of ordering lures people into ordering delivery more often, meaning more revenue for restaurants.

But there’s a catch.

Third-party delivery apps and services are pay-to-play. They charge restaurants fees and commissions – the higher the commission, the higher the placement in search results – for being listed on their platforms, and those costs can eat into a restaurant’s bottom line.  Some restaurants even claim that they are charged for some customer interactions that don’t end up in a delivery order.

At the same time, though, foot traffic has slowed, so restaurants need more delivery orders to stay afloat. And they need to ensure they’re listed on those popular apps – and placed highly – in order to be found by hungry consumers.

So do delivery apps help or hurt restaurants?

Talk to some local restaurants. Have they seen changes in their business due to the availability of mobile ordering? Have they tried to increase other advertising or offer their own competing delivery app?

The mobile ordering business yields other story ideas too:

Online ordering is easier for consumers, but is it more expensive? Have restaurants raised prices to make up for delivery costs?

All those orders must be delivered, which means drivers. We often hear about the challenges of the gig economy for Uber and Lyft drivers, but what about delivery drivers?

And it’s not just prepared food that’s available at a click, but groceries, too. Have fresh delivery services made grocery shopping cheaper for consumers, or just time-saving?
 
 
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