MEMPHIS, Tenn. (WMC) - Food delivery apps can get a meal to your door for just a few extra dollars. But are the popular services doing more harm than good to local restaurants?
“Well it’s … a misrepresentation of our business. The menu they have is outdated and inaccurate. They had photographs illustrating dishes which didn’t match the description of the dish,” said Ben Smith, executive chef and owner of Tsunami.
Ben Smith, executive chef and owner of the upscale restaurant Tsunami, says he got a call from a customer tipping him off that a third-party food delivery service, Grubhub, had him on their website -- even though he says he didn’t sign up with Grubhub.
Tsunami started making deliveries like other restaurants when the coronavirus shut down inside dining.
Smith says he takes pride in having his employees delivering because customers know them.
“While you can’t have the in-house experience, at least there’s somebody you know delivering the food that you are used to,” said Smith.
Smith also pointed out that if his employees aren’t delivering the food they miss out on much needed tips.
Grubhub charges up to 30 percent for the delivery.
Ernie Mellor, president of the Memphis Restaurant Association and owner of Moveable Feast Catering, says third-party food delivery services can eat into a restaurant’s bottom line. He is not a member of any of those services.
“It’s not good for restaurants because of the 30-percent commission fee they charge. If Tsunami charges $10 for a certain meal item, they have to give $3 to Grubhub,” said Mellor.
Kelly English, chef and owner of The Second Line and Restaurant Iris, said individually-owned restaurants suffer more than chains if they use third-party delivery because large chains can negotiate the cost with businesses like Grubhub.
“There are many good men and women that are Memphians that depend on Grubhub as a job, but from a model of the restaurant, the amount of money Grubhub takes out what sales are is an unsustainable model for restaurants, especially given right now. So, from my point of view, there is no way that we can support Grubhub and the way they do business,” said English.
Grubhub released the following statement Thursday:
"Our mission since we were founded in 2004 has been to connect hungry diners with great, local restaurants. We partner with more than 200,000 takeout restaurants in over 4,000 U.S. cities, and we provided nearly $6 billion in gross food sales to our local takeout restaurants in 2019, processing an average of more than 516,000 orders a day. The vast majority of our orders are and will continue to be from these restaurants we partner with.
Starting in late 2019 in select cities across the country, we’ll add restaurants to our marketplace when we see local diner demand for delivery so the restaurant can receive more orders and revenue from deliveries completed by our drivers. This is a model that other food delivery companies have been doing for years as a way to widen their restaurant supply, and we’re trying it as well to create a level playing field. We work to provide accurate menus and hours for these restaurants on our marketplace based on available information online. We believe partnering with restaurants is the only way to drive long-term value in this business – and have only added non-partnered restaurants to close the restaurant supply gap created by our competitors.
If a restaurant prefers not to be on our marketplace or needs to change any information like menu items or hours, they should reach out to us at email@example.com, and we’ll work as quickly as possible to make necessary updates or remove them. We’ve removed Tsunami from our marketplace as of May 21, 2020."