How Restaurants are Managing the Pivot to a Delivery-Only Model
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So far at least 30 states so far have banned dine-in service in response to the Covid-19 pandemic, forcing restaurants across the country to make the choice to either radically shift their business models or close for the unforeseeable future. Many owners, hoping to at least pay rent and sustain a few salaried employees, have embraced take-out and delivery service. Even in San Francisco with its shelter-in-place order, restaurant delivery continues.
In Miami, Giorgio Rapicavoli is packaging to-go pasta meal kits at Eating House. Thanks to New York State lifting bans on off-premise booze sales, Jeff Bell is selling bottled craft cocktails from a Yeti cooler outside of PDT. Carlo Lamagna and his team at Magna in Portland, Ore., are making small, medium, and large trays of Filipino comfort food for curbside pick-up and delivery.
As much as this writer wants to eat a large tray of pancit right now, it’s uncertain how long these efforts will carry restaurants and their workers. Last week, Michael Toscano started take-out and delivery service from his newly launched restaurant, Da Toscano. “I’m just trying to keep our team together, but we’re playing it by ear," he says. "Depending on how service tonight goes, we may not do it tomorrow."
Even some high-end restaurants are giving delivery and take-out a go; Canlis in Seattle pivoted to offer drive-through burgers and bagels, while Chicago’s Alinea is selling family meal kits of beef Wellington, mashed potatoes and crème brûlée for pick-up.
Jason Dady recently started curbside pick-up from four of his six San Antonio restaurants and added family meal delivery service. Dady has the advantage of a commissary kitchen and a decade worth of regulars to feed, but says that without government relief, he’s uncertain about how long his businesses can stay open.
“We’re flying so fast,” he says. “It’s just me, my brother, and our director of operations prepping, boxing, and delivering food. It’s a mad dash. You have to do as much as you can, as safely as you can while it lasts.”
What do you need to know before shifting to an in-house delivery model? First, check in with your insurance broker. It’s possible your existing general liability, disability, and workers compensation policies will cover delivery, but all insurance companies and policies are different, and some brokerages decline offering quotes to restaurants that provide in-house delivery, according to Paul Byrne, director of Schaefer Enterprises, Inc. “It’s a scary time for both owners and employees, especially when contemplating increased risks surrounding your daily job responsibilities,” he says.
For restaurants that aren’t already offering delivery, the fastest and least risky option is to contract with third-party delivery services, many of whom are shifting their policies and marketing services day by day in response to the crisis. Here’s a guide to their policies:
Caviar & Doordash: Reduced and No-Fee Service
Doordash and Caviar have different tiers of relief for new and existing customers, and the company is deploying $20 million in marketing to help drive sales. New DoorDash and Caviar customers can sign up for the service for free now through April and pay zero commissions for 30 days. Commission fees for existing partners will be waived for pick-up orders for 30 days, and the company says it’s working on additional fee reductions for restaurants that already use the platform. Read their full statement here.
GrubHub and Seamless: Fee Deferrals, Not Waivers
GrubHub and its subsidiary, Seamless, are “temporarily suspending collection of up to $100 million in commission payments from impacted independent restaurants nationwide.” However, the suspension of payment is a bill deferral and not a true fee waiver. GrubHub clarified their position in a follow-up email, noting that not all restaurants are eligible for the commission deferral. To opt-in to the program, and for more information click here.
Postmates: Fee Waivers in San Francisco Only … for Now
Through a pilot program, Postmates is offering commission relief to restaurants only in the San Francisco-Bay Area, though they are “in talks with other municipalities to scale the program,” according to April Conyers, Postmates’ senior director of communications. The pilot waives fees for new Postmates customers, and Bay Area businesses can sign up for a new account here to start fee-free delivery. Postmates also directs cities to email email@example.com if they’re interested in launching the pilot locally.
Uber Eats: Customers Pay Zero Fees, But Restaurants Still Pay
Uber Eats is currently waiving customers’ delivery fees in an effort to increase business, but restaurants don’t get a break on their fees. Uber has moved to daily (instead of weekly) payments for restaurants so they can collect cash faster.
OpenTable: Redirecting Diners to Delivery Services & Suspending Fees
Through its app, OpenTable is partnering with Caviar, Uber Eats, and Postmates to help promote delivery service from their partner restaurants. It’s also suspending subscription fees for restaurants that have temporarily closed and waiving fees on gift card sales. Businesses can learn about their evolving customer efforts here.
Resy: Compete Suspension of Restaurant Fees & Help with Take-Out
Resy has paused all billing for restaurants, and businesses that paid for service since March 9 will receive a credit. Resy is also using its ticketing feature to help restaurants sell packaged take-out meals (think bento boxes, pre-set dinners, or sandwiches of the day). There are no fees for restaurants to use the service, and the app is heavily marketing take-out options to its customers. Restaurants on Resy can fill out this form if they are interested in having their settings reconfigured so that customers can “book” a takeout meal option.
Toast: Helping Customers Transition to Take-Out and Delivery
Toast’s POS system has existing functionality to help businesses manage take-out and delivery, either with third-party apps or in-house drivers. Toast users who aren’t currently using the digital ordering program can “turn on” the functionality to shift their business model. The first three months are free when restaurants sign up for 12 months.
Caroline Hatchett is a New York City-based food and drinks writer, who also happens to host the world’s only casserole lifestyle podcast.