With COVID-19 restrictions severely limiting dining at restaurants, popular apps like Uber Eats, Glovo, and Bolt Food have seen a proliferation of new additions as dozens of restaurants jump on the delivery bandwagon to save their businesses. But not everyone can afford the fees and commissions these services charge.
For many restaurants, the alternative is to either create their own delivery service or forego the trend altogether and focus on takeaway or in-house dining.
One place that’s chosen the latter option is InkFarmFood, an Israeli restaurant with a small menu of made-to-order dishes and fresh juices. It’s currently open during limited hours, and is leaning heavily on takeaway instead of partnering with delivery apps.
“Uber and Glovo take a very, very big commission… It’s 30% and [they also ask for] money to start. It’s not good at all, but normal people don’t know,” says Patrícia Lourenço Botrashvili, who takes care of administration for InkFarmFood.
Atlas contacted Uber Eats to clarify the terms of restaurant partnerships, and found that the commission varies depending on the arrangement with each restaurant.
“Commissions can start from 0% (pick-up) to 30% maximum,” says an official Uber spokesperson. “We offer restaurants the flexibility to partner with Uber Eats in a way that suits their business — whether that’s fulfilling the delivery using their own staff or providing a way for customers to order on the app and pick up in-store — and our commission will reflect that.”
In other words, the app offers more than the standard arrangement in which Uber couriers pick up and deliver food to customers. But under that agreement, commissions can be steep.
In November, Lisbon mayor Fernando Medina accused delivery platforms of taking predatory actions against restaurants due to these margins.
“At a time when restaurants are seeing their hours constrained and the number of customers reduced, takeaway service has become vital for survival. The rates of 35% charged by platforms are neither acceptable nor affordable for the restaurant sector,” Medina tweeted on November 20.
The maximum commission taken by Glovo is indeed 35%, as confirmed by SAPO. Medina also stated that he would file an official complaint against delivery apps with the Autoridade da Concorrência (Competition Authority) and make an alternative service available. Atlas reached out to Medina for comments, but did not receive a response in time for publication.
High fees may be a common reason why some restaurants choose to set up their own delivery services, but it’s not the only one.
The owners of ISCO, an artisanal bakery and bistro in Alvalade, believe that their customers value personal connection, which is incompatible with corporate food delivery apps.
“We work in proximity. Our clients are militant and dedicated. They know us and they know our products. They understand and — strangely — even value our limitations. On [the] contrary, those services are not very human,” say Paulo Pina and Paulo Neves, ISCO’s owners.
With that in mind, they’ve created their own service to deliver bread, pastries, and full meals to customers throughout the city.
“People [take] some comfort in opening the door and seeing a familiar face, because it’s always someone from ISCO delivering the orders. And they know that if something goes wrong, it’s very easy to get in touch and we will try to solve things as quickly as possible. That’s not easy [with] those delivery services you mention,” the owners explain.
Delivery isn’t a recent development for every restaurant, of course. Remi Coffee & Wine, an Italian café and deli, has been operating its own delivery service since it opened in 2018. Customers can order directly via its website, with the same prices and level of quality guaranteed.
“We spoke with Uber and Glovo two years ago regarding the deliveries, but the [commission] wasn’t affordable, [in] our opinion,” says Kristina Romar, CEO of Remi.
“We started to work with takeaway.com instead, where at least the customer does not pay [for] the delivery, but since March the service [has become] very vague, so we had to cancel our partnership.
“The main challenge is that people are too used to [apps like] Uber Eats, so sometimes they think if you aren’t there, you don’t deliver, or it’s just simpler for them to order through those apps,” Romar adds.
Remi also offers a pick-up option, which is becoming more and more popular. Romar says that many customers who come to collect takeaway orders end up having a drink on the terrace as well — perhaps a compromise between home delivery and traditional dine-in.
“I hope this will become a new reality… You get familiar with a place you order from. You become a part of it, feel the atmosphere, get to know [the] people,” she says.
Atlas also spoke to one of the co-owners of the delivery-focused project Las Gringas, who refers to this concept of restaurants as “the ‘third place.’ That social meeting place that lies between the home and work. The place where we go to connect and have fun.” In other words, an aspect of the industry that’s at risk of disappearing as in-person dining is discouraged.
The Las Gringas team was also behind the famed taquería Pistola y Corazón, before it closed for good in March 2020. They consider this new project to be the first step toward their goal of restructuring how restaurants work.
“We had been speaking a bit before the pandemic about the future of restaurants, but once it hit and we saw our business decimated, the conversations rapidly accelerated… We are not looking to be a delivery-only concept, but a hyper-experimental hybrid.
“The experience and ambience of a place is what we love about restaurants. We never want that to get lost in a dark kitchen or the informality of delivery. Las Gringas is our first foray into the delivery word and we are using it to see what is possible,” says the co-owner.
For Las Gringas, that means working toward the creation of a physical space where they can offer delivery in a service-oriented way. For now, customers can order taco kits, bottled cocktails, and other menu items directly through their website or on Uber Eats.
While some restaurants are blazing their own paths forward, partnerships with delivery apps have become crucial to the survival of many others.
According to the Uber spokesperson, Uber Eats currently has more than 5,500 restaurant partners in Portugal. In addition to popular restaurants and international chains, “[w]e also have dozens of independent small merchants (grocery stores, wine shops, bakeries, etc.) on the app that have amplified their reach by being present on our platform.”
And despite complaints about their fees and setup costs, Uber Eats is making an effort to support the industry in its own way, the company claims.
For example, Uber is offering, and paying for, free delivery during weekday lunchtimes; waiving all restaurant fees on pick-up orders for a limited time; introducing express onboarding for new restaurants; and various other measures. It has also waived the initial activation fee of €300 that was previously required to join the platform.
As for the future, “We’re focused on increasing demand and volume for restaurants through marketing campaigns to bring in new customers and increase the order frequency of the existing ones,” says the spokesperson. Uber is also expanding its reach through partnerships with supermarkets, convenience stores, healthcare companies, and beauty brands.