Re:Why restaurants hate Grubhub/Seamless
by slowwwclap on Monday October 09, 2017 @06:09PM
(#15437873)
After factoring in industry wide targets of 25% direct food costs, 25-35% staff costs, and 25% overhead - why give the whole profit margin to Seamless?
As an owner of a restaurant and beer garden - experiencing first hand their unreliable technology, driver dispatch, and support staff - I dropped them after a few months.
We also added notes in all our deliveries as a disclaimer that we did not hire the drivers - and that customers could call us directly for future orders - bypassing Seamless - to help support their beloved local business.
Are you allowed to have higher prices on Seamless? That would seem to be a pretty straight forward method of not killing your margin.
I wonder if a restaurant association could take on the cost of building a competitor that could compete with Seamless; Especially if restaurants manage to convince the public that Seamless is as toxic as Uber, a solution to absolve people's guilt that is just one click away might be successful.
I say this because I hate having to get on the phone.
I don’t know why you wouldn’t be allowed, other than Seamless may have a rule against it since it’s probably a better customer experience to see accurate prices. The margin problem can be handled with delivery charges or delivery minimums.
I use Foodler, which was recently acquired by GrubHub. Several restaurants near me charge a bit more on foodler than they normally do. I'm cool with that as I'd rather order from one of these services
I absolutely agree that restaurants shouldn't give the whole profit margin to Seamless and that they should, as you did, pursue alternate marketing tactics that use Seamless as an entry point, but hold on to the customer and build a direct relationship.
I read a great book a while ago called "The Middleman Economy" which talks about all the ways that middlemen provide value. Sounds like Seamless isn't providing much value (at least at the time of writing), and those take rates are pretty high for repeat orders.
At the same time, as a restaurant, why wouldn't you pay 20% if you were going to be out of business if you didn't (as one of the quotes in the article mentioned).