Alternative local food deliveries help restaurant bottom line, says Andrew Coppolino

Ramen Rebels in Waterloo still uses Uber Eats and Skip the Dishes for deliveries, but the restaurant has rebelled somewhat against the popular smartphone apps and recently added its own in-house delivery.

Other restaurants have pursued similar strategies in order to reduce the high fees charged by the big delivery apps.

"We are using staff that used to work for us pre-pandemic. It gives them some cash, and it saves us paying the 30 per cent fee to the delivery apps," said Ramen Rebel's Ien Kaehler.

If restaurants felt the pinch of the fees before the pandemic, the sting since has been greater; many businesses have lost a quarter and even 40 per cent of their sales, noted Kaehler.

"To lose another 30 per cent of that to a big business delivery company is tough for most to swallow," Kaehler said.

Most restaurants have no choice but to engage with the big delivery apps; they create cash flow and provide a presence for customers searching for food on their phone.

For comparison's sake, an order of four burgers from a premium chain in Waterloo is around $48. With a $4.87 service fee and $3.99 delivery fee from Uber Eats, along with a tip and $7.50 in taxes, the burger bill jumps to about $70 — that's $23 added to the food cost. Then there is the commission the apps take from the restaurant.

On the other hand, a meal for four from Ramen Rebels would come with a $5 flat fee for delivery (within 10 kilometres), along with taxes and a tip — and the customer's money would stay with Ramen Rebels.

Growing by word of mouth

At Red House in Waterloo, Dan McCowan has just started using Mimshack, a local delivery company that charges a $10 flat fee.

"It doesn't matter what the bill is, it's the same delivery fee for a jar of curry or a $100 dinner order," said McCowan.

Owner Cory Mac Kay says Mimshack (an ancient term referring to a "spirit of expansion") delivers for about 25 restaurants and has five drivers on its roster, with whom it splits the delivery fees.

"There's no commission taken from the restaurant, and right now we are growing just by word of mouth," Mac Kay said.

Kitchener's Café Pyrus also uses Mimshack and acknowledges the delivery fee for the customer.

"But that fee is usually less than service fees on third-party delivery apps," said owner Tyzun James. "We also want it to be an amazing customer experience like it was in-store, but with big third-party apps we have no quality control for customer service."

'Horror stories' about big apps

The growth of these smaller delivery companies has caused people to re-think how they order food for delivery when they want to support local restaurants.

It should also be pointed out that many restaurants have increased their take-out menu prices to mitigate the fees charged by the big delivery apps.

Based in Cambridge, DCA has been operating for several years delivering a range of goods, including food. Delivering for over 60 restaurants, they take care of online orders, and the customer is charged a delivery fee.

"It's good for Cambridge deliveries," said Nadia Dragusanu who operates Café du Monde Crêperie, which charges $10 for delivery with no minimum purchase and free delivery over $49.

Also in Cambridge, E.V.O. Kitchen uses DCA as well, co-owner Taryn Swartzentruber said.

"We wanted to support a local company rather than a big delivery company that we just hear horror stories about," she said.

Choice for customers

Rob Puschelberg started TOAD Take Out And Delivery when his entertainment company was forced to shut down by Covid-19. While working for a friend, he heard restaurants talking about the fees that Uber Eats and other delivery apps charge.

"I thought this was an opportunity to try to do something grassroots and at the same time help local businesses," said Puschelberg. "We're not taking any money from the restaurants at all."

While he is currently a one-person operation, Puschelberg has about 17 drivers and delivers for 45 restaurants.

"We are growing by four or five restaurants each week," he added

To use TOAD, customers call the restaurant and place their order, indicating that a TOAD driver is going to hop on over for pick-up and delivery; the customer then logins into the TOAD app and pays the $7 delivery fee (within delivery area).

"Some of our partner restaurants are absorbing the delivery fee or a portion of it, for a minimum purchase," Puschelberg said.

Sabrina Hutchison of Kitchener's Malt and Barley pub, said they use TOAD.

"With profits at restaurants under 10 per cent, they don't need another loss of 25 to 30 percent. The delivery difference has been huge," she said.

The big delivery apps aren't going away anytime soon, but these smaller delivery companies, despite the growing pains they will experience, represent another choice for customers using them to have their supper delivered and to see a few savings – perhaps the most important of which, in these times, is what goes into the restaurant's pockets.