
Why restaurants hate Grubhub/Seamless - Mitchhhs
http://tribecacitizen.com/2016/03/01/why-restaurants-hate-grubhub-seamless/
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ivraatiems
The other day, I was at a restaurant that uses EatStreet (a smaller
competitor) but no other similar services. (I was waiting for an order I
placed in person.)

A GrubHub driver came in and asked whether the GrubHub order had gone through
yet; it seemed like he had been waiting. The person at the counter, confused,
said that the establishment didn't work with GrubHub and never had. The
employee repeated that he had an order, and tried to confirm the details of
the order - but there was no such order. Apparently GrubHub had called the
restaurant, and when someone at the restaurant tried to explain that it didn't
work with GrubHub, the system had ignored them, and placed the order anyway.

Now somewhere there is a customer presumably mad at the restaurant for losing
their order, while GrubHub will, for all I know, continue to do this to said
restaurant forever. What's an owner supposed to do?

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Chris2048
> What's an owner supposed to do?

sue?

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ivraatiems
Yes, but it isn't realistic to expect this small restaurant has the time or
funds to do this in a competent way versus a millions-of-dollars company.

~~~
rando444
This is one of the many reasons why small claims courts exist.

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lacker
_How can you help?_

 _Most restaurant owners would very much prefer it if you called in your
order. If you’d really rather order online, see if you can do it via the
restaurant’s website._

This kind of explains everything. As bad as Seamless might be, it's a far
better experience for the customer than using the average restaurant website.

~~~
Spivak
But the irony is that just calling the restaurant is a better experience than
any app has been able to deliver. One wonders why restaurants even bother with
online ordering.

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thaeli
So I can talk to a human, who may have trouble understanding my accent, and
slowly read out an order, then have it read back, correct it, then pay by
reading out all the numbers on my credit card over the phone? And this is
somehow better than using an app, where I just click what I want and hit go?

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pitaa
The whole restaurant marketing/value-added service industry is terrible,
sometimes feeling even a bit sleazy. Of course its known that a restaurant's
yelp rating is dependent on how much they pay, but all the way down the food
chain to the local startup restaurant-services, they seem equally sketchy.
Every 3-6 months I see the stickers for some new delivery service, discount
club, or rewards program start to show up on the doors of almost every
restaurant in town. And then like clockwork within 6 months they are gone
because the service either went bust or was dropped by every restaurant (and
then went bust) because the restaurant owners finally did the math and saw how
much money it was bleeding.

While none of them exist in my neck of the woods, it seems that all the
"successful" 3rd party food delivery companies are only successful because
they're running on VC cash, exploiting contracted delivery personnel, and/or
making the restaurant give them a big enough discount such that they only
break even.

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skyisblue
In Australia there’s an online ordering platform called MenuLog who also
charge a commission. I’m not sure if Grubhub or Seamless do this, but MenuLog
will also purchase a domain and set up a cookie cutter site for all
restaurants that sign up. They will also push this site high up in Google
search results with SEO, which sounds great, but all loyal customers who are
searching for the restaurant end up on this site, which links to their online
ordering platform. So restaurants end up paying a commission for orders from
loyal customers who would have gone straight to the restaurant. We’ve also
seen phone numbers purposely omitted in these cookie cutter sites as they
can’t earn a commission from phone orders.

~~~
ryanworl
GrubHub/Seamless also does this. Additionally they DO charge a commission for
phone orders via a system that charges restaurants on a per-call basis. You
see it frequently in tiny Manhattan restaurants where the website the owner
set up couldn’t possibly have worse on-page SEO (the menu is an image or a PDF
link, not responsive, etc) and the GrubHub site is a heavily optimized lead
gen funnel.

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cheath
I see an opportunity for a "Shopify for restaurants". Essentially an end to
end SaaS solution that let's you do your own order management and lead-gen
(and plugs into your own POS). though that latter part (lead gen) would still
be a huge challenge for restaurants. Seamless charges those fees because they
have the audience and can.

~~~
mishac
I ordered recently from a restaurant in montreal that actually just used
shopify itself. seemed to work well enough.

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mooreds
Note this is from 2016.

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).

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slowwwclap
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.

~~~
Eridrus
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.

~~~
baddox
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.

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s17n
The corporate accounts thing is actually pretty interesting - a cost that was
previously absorbed by large companies (doing the accounting for expensed food
orders) is shifted to the restaurants by a third-party entrant in the space
(Seamless) which captures a profit in the process.

Of course this is money that the large companies could have been extracting in
the first place, but they didn't bother because it's not worth it for them on
an individual basis - they don't care about the money, they are giving their
business to Seamless just for the convenience. I wonder what other similar
opportunities might exist?

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felixgallo
A super innovative, restaurant-centric startup in this space:
[https://www.tocktix.com](https://www.tocktix.com). Tock turns around the
weird power imbalance by booking tables as tickets like you might in a
theater. Instantly the no-show problem vanishes, and the customers you get are
the kinds of customers you want. Clever.

