Why some local restaurants can’t stand delivery apps — and which deliver on their own

Third-party delivery apps have become vital for many Sacramento-area customers throughout the coronavirus pandemic. They’re also driving some local restaurateurs crazy, particular those who never agreed to be boxed in.

Several high-profile local restaurant owners are speaking out against apps such as GrubHub, DoorDash and Postmates. Many of the complaints involve the apps’ dubious practice of listing restaurants without the owners’ knowledge or consent, often with outdated menus.

Canon has inadvertently served at least five Postmates customers during the pandemic despite never having agreed to be featured on a delivery app, co-owner Clay Nutting said. Nutting realized his and chef Brad Cecchi’s upscale, highly seasonal east Sacramento restaurant was listed on the platform after several customers tried to order a mixture of brunch and years-old menu items during takeout dinner rushes.

The orders had been logged through Postmates, whose delivery drivers then went to Canon to place them in-person like any other customer would. Canon refused any orders of old dishes but completed those that happened to select from the current menu, only discovering they had been placed by Postmates drivers after Nutting contacted the company to have his restaurant removed, he said.

“The way we were listed on Postmates was totally disingenuous,” Nutting said. “There are ways they could have gone about it that would have made it more likely for us to utilize that service, but the way they went about it without our permission was not cool.”

In theory, third-party delivery apps seem like a near-perfect vessel for this era. They offer a way to financially support struggling businesses while getting a meal one can’t prepare at home and minimizing coronavirus exposure and spread.

Most people with clean backgrounds and relatively new cars can get approved as drivers, providing flexible hours to those whose finances have suffered during the pandemic.

Yet the apps have issues. During the pandemic, there’s an ethical conundrum about some people being unwilling to leave the house for food yet counting on largely low-income drivers to risk coronavirus exposure by picking it up for them. More broadly, third-party apps regularly eat into restaurants’ thin margins with commissions of up to 15-35% per order in addition to the delivery fees leveraged against customers.

After Binchoyaki opened in 2016, owners Toki Sawada and Craig Takehara decided to invest their limited marketing budget in delivery apps rather than traditional advertising.

Shortly after opening, the couple signed their restaurant up with Uber Eats and Caviar, knowing each would take 30%, because they made ordering convenient for first-time customers Sawada and Takehara hoped might develop into regulars.

As Binchoyaki developed a reputation as one of the region’s best Japanese restaurants, though, exposure through Caviar and Uber Eats wasn’t worth the 30% commissions, particularly when paired with what Sawada described as unhelpful client-side service. Binchoyaki won’t re-up its contracts with either app upon expiration, Sawada said.

“For us to survive in this current environment, there’s certain things we have to do, and Caviar taking these fees is just not feasible for us,” Sawada said.

In Sacramento, the surest way to maximize a local restaurant’s profits when ordering delivery is to buy from those with their own drivers. These 16 Sacramento restaurants offer their own delivery services, which may have distance or price restrictions.

• Andy’s Candy Apothecary (1012 9th St.)
• Bombay Bar & Grill (1315 21st St.)
• Buffalo Pizza & Ice Cream (2600 21st St.)
• Cathay Express (2550 Cottage Way)
• Chan’s Restaurant (3116 Stockton Blvd.)
• Combo King Express (5160 Fruitridge Road.)
• Dugout Deli (2552 Cottage Way)
• Ginger Elizabeth Chocolates (1801 L St., Suite 60)
• India Palace (8865 Folsom Blvd.)
• Lotus Fusion (1620 W. El Camino Ave.)
• Miso Japanese Cuisine (1517 Broadway)
• Sacramento Pizzas & Subs (5240 Fruitridge Rd.)
• Spicy Dragon (7235 Franklin Blvd., Suite 1)
• Temple Garden (5701 Broadway)
• Yue Huang Restaurant (3860 Truxel Rd.)
• Zinfandel Grille (2384 Fair Oaks Blvd.)

“Batched” and “chained” orders (pickups for several households at one or several nearby restaurants) can be another hurdle. When drivers try to knock out multiple orders at once, the customers can get left with a bad taste in their mouths.

Canon doesn’t do delivery because Nutting doesn’t trust that food will get to customers while it’s still hot and neatly boxed, he said. Likewise, South has never offered delivery or partnered with an app in part because its famous fried chicken has about a 15-minute window before it gets cold and loses its crispy exterior, owner N’Gina Guyton said.

That hasn’t stopped DoorDash from listing the Southside Park restaurant and accepting takeout orders through its app, Guyton said. Customers will select food and pay through the app, only to show up and discover that South never received their order because there’s never been any agreement between the restaurant and DoorDash.

When that happens, Guyton said, the customer is more likely to move on and ask DoorDash for a refund than buy their meal from South again on the spot and wait 30-45 minutes for it to be ready.

“It puts us in a place where the client doesn’t always know it’s not our fault. So we have to go and do petty posts on social media saying it’s not us, but then not all of our customers follow us on social,” Guyton said. “It’s just a frustrating circle.”

In an email to The Sacramento Bee, a DoorDash spokesperson said any restaurant that doesn’t want to be listed on the app will be removed upon request.

“DoorDash was founded as a platform to help grow local businesses, and restaurants tell us that being on DoorDash brings them new customers and incremental revenue. While the majority of the merchants on our platform have partnerships with us, we will occasionally offer to act as a courier service for customers to restaurants in their neighborhood,” the spokesperson wrote. “This listing is at no cost to the restaurant, and orders are paid for in the same way that any other customer would. For many restaurants, being listed on our app is considered a helpful trial test towards a formal partnership that provides additional benefits and services. For those not interested in being on DoorDash for any reason, we remove them from the platform upon their request.”

Postmates, though, elicits the bulk of Guyton’s ire. She said she’s demanded South be taken off the platform, where it was listed without her knowledge, after the app inexplicably offered coupons for free macaroni and cheese from her restaurant.

South was removed from Postmates for two months before sales representatives reached back out about a possible partnership, and was eventually re-posted on the app without Guyton’s agreement, she said.

“I don’t know what kind of amnesia they think we have where if they wait nine months and put us on their platform again we won’t notice,” Guyton said. “It’s like that bad boyfriend who does you dirty and you break up, but he comes back all headstrong hoping you’ll forget about how bad the relationship (was.)“

Postmates officials did not respond to a request for comment on the issues at South or at Canon.

Some West Coast government bodies have noticed. Seattle, San Francisco and Los Angeles have all passed emergency ordinances to cap delivery app fees at 15% after GrubHub pocketed nearly 70 percent of a San Antonio restaurant’s sales through the platform, as reported in a now-viral Facebook post. The California State Assembly overwhelmingly passed a bill last month that would ban third-party apps from listing restaurants’ menus without their consent.

Region Business subset Region Restaurants called on the Sacramento City Council to temporarily cap fees at 15% two months ago. No concrete action has been taken so far.

Nutting’s frustration isn’t with restaurants that partner with third-party apps, delivery drivers trying to earn a living or even the customers ordering through them, he said. He’s concerned that dining out will increasingly run through smartphones and Silicon Valley platforms, no matter what restaurants have to say about it.

“I worry about the future of giving these third-party apps an inch if you are not a willing participant,” Nutting said. “I feel like the end game for them is to continue to make it part of our consumer psyche to just pick up the phone and order food from a restaurant without recognizing that some restaurants are not willing participants or can’t handle the fees just for the privilege of sending people to the restaurant for delivery.”

This story was originally published July 28, 2020 at 12:00 AM.