Maryland chef and restaurant owner Tony Marciante said food-delivery apps like DoorDash and Uber Eats were cutting too far into his margins.
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Tony Marciante has run Chef Tony's Seafood in Bethesda, Maryland, since 2007. When the food-delivery apps like DoorDash, UberEats, and Grubhub came out, he signed up, like many restauranteurs.
"They were a necessary evil," Marciante, 55, told Business Insider.
But now he's weaning his restaurants off the apps. Marciante, who now has a second Chef Tony's location in Rockville, Maryland, and a couple of pizza concepts, said the tide appears to be turning and that other restaurant owners are also looking for alternatives.
Food delivery apps have also come under scrutiny for charging customers high fees and underpaying drivers. A recent study found customers who order takeout via Postmates or DoorDash could be paying twice as much for their meal. Meanwhile delivery drivers previously told BI's Alex Bitter that the job isn't as lucrative as it once was.
From a restaurateur's perspective, Marciante said there were two main drawbacks to using the apps.
He said one issue was quality control, adding that the food-delivery apps don't always do enough to vet drivers.
When customers dine in, the chef and restaurant staff can control the speed, presentation, and delivery of a meal from kitchen to table. But with the delivery apps, once the food goes in the takeout bags and into the hands of an intermediary, the restaurant no longer controls if the driver drops or spills the food, has three stops before it gets to the customer, or forgets half the order.
Even though the driver may have made a mistake, Marciante said some customers blame the restaurant.
"The drivers are a representation of the restaurant to some degree," he said.
Cost was another major factor that turned Marciante off from the apps.
During the pandemic, food-delivery apps gained even more popularity, and customers started ordering food for delivery that they may not have considered getting to-go in the past. With more people ordering delivery from Marciante's seafood restaurants, it started taking a significant toll on his margins.
"It's a very thin margin business," he said, adding, "every dollar matters."
It's common for the apps to take a commission fee of 20% to 30% per order from the restaurant, Marciante said.
But delivery and ordering online have become a big part of his business. Marciante said that at one of his locations, take-out orders often account for 22% to 30% of their business.
"I started looking at the fees that we were paying and all that money, and I said, as they say, 'There's got to be a better way,'" he said.
To wean off the apps, Marciante now uses a white-label delivery service. Customers place their orders directly on the restaurant's website, and a third-party delivery service picks up and delivers the order.
Marciante uses Owner.com, a startup that has raised millions in funding to help restaurants ditch the food-delivery apps. The company helped Marciante build out his website and his own app to take orders directly and has its own network of delivery drivers.
He said he pays about $500 per month per location for all the services and that Owner.com charges a flat delivery fee of $7 per order, which can be paid by the restaurant, charged to the customer, or split between them.
Marciante said he'd been using Owner.com for less than two months but was already super pleased with it and that he'd recommend it to other restauranteurs looking to get out from under the popular food-delivery apps.
It's worth noting that some of the apps, like Uber Eats and DoorDash, also offer white-label delivery services, where customers can place orders directly with a restaurant but they can be delivered by the app's drivers. This option will typically save the restaurant money compared to when customers order in the app itself, so it may be another option for restauranteurs to explore.
Marciante said DoorDash reached out to him after being contacted by BI and that they "offered to up their game" working with him and assigned him a sales executive.
The other food-delivery apps did not respond to requests for comments from BI.
While the apps can be costly to restaurants, Marciante said they are still useful tools for restaurants to connect with first-time customers.
"A lot of people will just pull up their phone and go to Uber and just figure out what they want to eat," he said.
But after being in business for 17 years, Marciante has plenty of repeat customers, many of whom order takeout or delivery on a regular basis. Now, those customers can go straight to Chef Tony's website or app and place their orders rather than give a third-party app an increasingly high cut each time.
For now Marciante plans to maintain his presence on the apps in order to keep reaching new potential customers. But now, when those people find him and want to order from him again, they can go straight to his site and cut out the middleman.
Are you a restaurant owner who wants to share your experience using food-delivery apps? Have you stopped using the apps or are you trying to get off them? Contact this reporter at kvlamis@businessinsider.com.
