food delivery apps

Smaller Delivery Apps Help Restaurants Keep More Money in Their Pockets

Some third-party delivery apps charge huge fees, but alternative options are trying to create better platforms for restaurants and diners alike

An illustration of a phone screen with chowbus, black and mobile, and toast delivery apps
TODAY Illustration / Getty Images / Chowbus / Toast / Black and Mobile

Amid the pandemic, food delivery is a great way to enjoy a meal and support local restaurants without the risks associated with indoor dining. However, restaurants have criticized well-known delivery apps like Grubhub, DoorDash, Postmates and Uber Eats, saying that the third-party delivery services charge huge amounts of fees — between 20 and 30% commission rates for every order — making an already difficult situation even harder for struggling establishments.

If you are looking to support your favorite restaurants, though, there are alternative options: Picking up the phone and calling the place directly is always best, but multiple smaller apps and delivery services that are less of a financial burden on restaurants have sprung up in recent years, and some preexisting platforms have expanded their operations during the pandemic.

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Toast

Toast is actually a restaurant technology sales company, selling point-of-sale systems that allow servers to input orders, print checks and more. Early in the pandemic, the company developed Toast TakeOut, which gives diners a "delightful mobile ordering experience without disrupting … existing restaurant operations."

According to Toast's website, the company does not charge participating restaurants any additional software fees if they are already using the Toast Online Ordering product. Diners place their orders online, pay in advance, and pick up at the restaurant themselves. Toast promises a "no hassle" experience for both restaurants and diners.

Black and Mobile

Developed by twin brothers David and Aaron Cabello, Black and Mobile is the first delivery service that exclusively delivers food from Black-owned restaurants. Launched in February 2019, the service was barely a year old when the pandemic struck.

David Cabello told TODAY Food that an increase in delivery orders helped the delivery service, and said that the company got a second wave of support following the killing of George Floyd.

"Everyone decided to support Black businesses during that time, sometimes for the first time," Cabello said. "They started to support us even more. It is unfortunate that it takes someone dying for us to get that support, but we did see a spike."

Cabello said that the support led to an increase in hiring for the company and led to more partnerships with restaurants. The platform typically charges restaurant a fee of between 15 and 20% per order, though he noted that during Black History Month they are lowering the fee to 13% per order.

The platform is expected to expand over the next few years — right now, it's only available in Philadelphia, Detroit, Atlanta and Baltimore — and Cabello said he hopes that it will lead to more awareness of Black-owned restaurants.

"It's about more than money and business, it's really about helping your community," he said. "A lot of people say they want to support Black businesses more, so I think that this is important and it's needed."

Chowbus

Developed in 2016, Chowbus is a food delivery platform that aims to help people discover "local Asian cuisine that is not easily found on other delivery apps." First available in Chicago, the app was born when co-founder Linxin Wen walked through the city's Chinatown and asked every restaurant in the neighborhood if they would be interested in joining the platform.

Now, the app focuses on helping mom-and-pop Asian restaurants thrive: According to a statement from the company, it doesn't allow big chains on the app and prohibits restaurants from paying more money to appear higher on the app. Instead, all restaurant are charged a flat rate. The chain did not say what its fees for restaurants are, but said that the business model is "sustainable long-term for all parties," including restaurants, drivers and diners, and that the fees are "much lower than the 30-35% many platforms charge."

Another feature unique to Chowbus is its "bundling" program, which "leverage(s) the close proximity of so many of our restaurants in the Chinatown neighborhoods of their respective cities" to let diners order dishes from multiple restaurants. The platform said that this feature helps increase revenue for restaurants, because diners will tack on a small item from another restaurant in addition to their main meal.

Seated

When Seated launched in 2017, the restaurant focused on leading new diners to upscale restaurants, offering rewards points to members who went to partnered restaurants and provided proof of their meal. In 2020, the program shifted to offer delivery and pickup options.

The company's rewards program usually gives diners between $10 and $20 in "Seated Rewards" which can be redeemed for gift cards for brands like Target, Sephora, Starbucks and more. Diners simply download the app, look up nearby restaurants and place an order on the restaurant's website. Seated specifically does not work with third-party delivery services, noting that they "will not accept receipts from Uber Eats, Caviar, Seamless, Grubhub, etc." in an effort to "keep our Restaurant Partners from paying the high fees" charged by such services. Instead, restaurants pay a flat monthly rate to be on the app (how much is unclear, as Seated did not respond to a request for comment from TODAY).

On its website, Seated says it can help restaurants increase their profit margins by driving demand. Statistics on the site say the app helped send more than 900,000 diners to their restaurant partners, leading to more than $37 million in new revenue and $7 million in tips for staff. The site does not provide information specific to the delivery or pickup options.

Traiilo

Brooklyn-based Traiilo plans to launch its delivery app later this year, and unlike some other services, the platform will serve up more than just restaurant meals: The company will also feature same-day grocery and alcohol delivery. According to its website, the app will exclusively serve "local Latinx retailers."

According to Bon Appetit, once Traiilo launches, it "plans to charge lower transaction fees than its competitors and provide marketing tools, like SEO and social media guidance, all in Spanish for clients," as well as accepting EBT (Electronic Benefits Transfer) for food deliveries in the future.

ChowNow

ChowNow is an online ordering and payment platform that restaurants can use to manage delivery or pickup orders. In a recent press release, the company billed itself as a "marketplace alternative" that helps "restaurant partners get online quickly and easily" and avoid "paying predatory commissions to third-party delivery services."

Instead of delivery fees, the company charges restaurants a flat monthly fee for software use: $99 a month for a two-year plan (plus a $199 setup fee), $119 a month for an annual plan (plus a $199 setup fee) and $149 a month for a monthly plan (plus a $399 setup fee).

According to the press release, the company has helped "20,000 restaurant partners" this year, "with 100% of sales going directly to the restaurants resulting in over $500 million saved in commissions."

This story first appeared on TODAY.com. More from TODAY:

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