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SLO restaurants run on fumes due to steep fees from delivery apps like UberEats, Grubhub

Posted at 7:57 AM, May 18, 2020
and last updated 2020-05-18 10:57:31-04

Due to the coronavirus, dine-in is no longer an option at our favorite Central Coast restaurants but there is delivery, though it does come at a cost to already struggling small businesses.

"Total sales have dropped since March 18 significantly, by about 70 percent," Bliss Cafe Co-owner Dominic Chequer said. "Our delivery sales have peaked, gone way up. But it doesn't tell the whole story."

That story includes a chapter on steep service fees charged by delivery apps, like UberEats, Grubhub, and DoorDash.

"It definitely comes at a cost," Big Sky Cafe Owner Greg Holt said. "The delivery services charge us anywhere from 25 to 30 percent of the ticket."

If Big Sky Cafe fulfills $1,000 worth of delivery orders this month, after the service fee and other charges, Holt will likely pocket less than $600.

New York City, Seattle, and Washington DC are forcing delivery apps to drop service fees below 15 percent, but there's no such cap in San Luis Obispo.

UberEats previously responded to allegations that it applied unreasonable fees and charges to resetaurants by saying a large portion of its fees go directly to delivery drivers and the cost of their training.

Due to a lack of insurance to employ his own drivers, Holt has no choice but to respond to the decline in sales.

"That's a gross understatement, right now we're operating at about 10 percent of what we were," Holt said.

That painful reality rings true for Holt's neighbors, Bliss Cafe and Urbane Cafe.

"Everything dropped a lot, we were down in sales a lot a lot," Urbane Cafe Gen. Manager Marella Perth said.

Despite his concerns about service fees and driver hygiene, Chequer said the apps do have one benefit.

"We've captured audiences we never had before because instead of walking around downtown, they're scrolling a site," Chequer said.

Local restaurant owners, who already operate on slim margins, are now offering special takeout deals for drivers who pickup the food themselves.

Bliss Cafe offers 10 percent off menu items ordered through its website, Big Sky Cafe offers a 15 percent discount on pickup orders, and Urbane Cafe throws in freebies like cookies and drinks for customer loyalty.

But regardless of how the food makes it home, they business owners are thankful for customers.

"You're trying to support the local restaurants and help them survive through this and we're trying to feed people and make them enjoy their lives at home with the food they still enjoy outside of home," Perth said.

Holt is looking into buying insurance to employ his own drivers, not only to avoid paying the service fees but to bring back furloughed employees.