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Grubhub's Cameron Grieg and the Observer's Tabi Walters

Invasion of the Food Snatchers

Delivery apps love our restaurants. Restaurants don't always love them back.

by Sally Mitani

From the October, 2019 issue

Heard of The Ice Cream Shop? It has stores in three places--601 S. Main, 1423 E. Stadium, and 695 S. Maple--and they all deliver. That's plausible, isn't it? What college town doesn't love its ice cream?

But think about it a minute. Where on Main? Why can you only find it on Grubhub, Uber Eats, and similar phone apps? And why does it only seem to carry Ben & Jerry's?

Bryce Abdal, owner of Buscemi's Pizza, 695 S. Maple, laughs as he explains. The Ice Cream Shop is a "virtual restaurant" invented by Ben & Jerry's, to give convenience stores a piece of the hottest action in apps right now: restaurant delivery. Any convenience store that sells B&J's can be a part of that big Ice Cream Shop in the cloud. Since the other side of Buscemi's is the party store formerly known as Buster's Market, Abdal is fine with letting Ben & Jerry's and the delivery apps work together to help him move ice cream. He uses all the main delivery apps to sell his pizza, too.

At present, four apps are competing hard for market share in Ann Arbor--Grubhub, Uber Eats, DoorDash, and EatStreet. "They all work fine," Abdal says.

After going to the trouble of learning how to use an app, he says customers develop a loyalty to it, so vendors that deal with any of the apps tend to deal with all of them.

Other vendors, though, want nothing to do with any of them--though they say the apps don't always take No for an answer.

Restaurant owners, in particular, are sorting themselves into pro and con factions when it comes to digitally enabled food delivery.

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Sava Farah, owner of Sava's, Aventura, Wilma's, and the forthcoming Dixboro House, says she doesn't use them: "There's no way to control the quality of food once it's out of our hands, and some of these drivers are picking up for two or three places at

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once," she says.

That didn't stop DoorDash. Farah says the app posted a menu for Wilma's, her kale and avocado-toast haven on the ground floor of the YOUnion student high-rise, without permission. "It wasn't even the right menu," says Nathan D'Andrea, Wilma's managing partner. "DoorDash had listed us using our former menu, from when we were Fred's."

Since there was no business relationship, DoorDash couldn't take a cut of Wilma's sales. The app just placed takeout orders, fronting the money and then collecting whatever it wanted from its customers. But after SavCo's legal team contacted them, they removed the menu.

"I get contacted all the time by food delivery apps," D'Andrea says. "They go after the big dogs first. They want to be able to say, 'We've got Ahmo's, or whoever, on board,'" as leverage to entice other restaurants. He says the big three are Grubhub, DoorDash, and Uber Eats, but there are dozens more.

Farah says she would rather put her energy into filling Wilma's seats than discount her food and pay people to drive it elsewhere. But she doesn't expect the apps to go away. "Convenience trumps everything these days," she sighs.

---

Amer Bathish, owner of Amer's Delicatessen, also refuses to deal with delivery apps, but his menus are posted on most apps anyway, without his cooperation. One of them even treats "Yogurtrush," his frozen yogurt store-within-a-store, as a separate business--the apps seem to regard ice cream, froyo, and bubble tea as particularly ripe territory.

Of course, Bathish points out, the delivery apps are basically invented for college kids. "Eighty percent of my clientele are students, and they all have smartphones," he says. College-town restaurants all over the country right now are getting calls from app salespeople and seeing their menus pop up online.

Bathish knows delivery economics--from 2006 to 2013 he had his own delivery cars. Here's a scenario: "On a rainy day, you're open, your staff is standing around doing nothing, and the person who lives a block away will want a Georgia Reuben, a bag of chips, and a Snapple delivered." Here's another: "On a sunny day? I'd have three delivery guys sitting around doing nothing." And with delivery apps extracting 25 to 35 percent of the bill, he can't see how outsourcing delivery would work any better. (He says app sales reps are pretty cagey about percentages, and he never got far enough into the conversation to be presented with exact numbers.)

Bathish points out that he's paying $20,000 a month in rent for his Church St. and State St. locations, "regardless of whether people eat in or out." But he doesn't see DoorDash or Grubhub offering any solutions to his main challenge, which is how to cover his bills "in a town that only operates seven months of the year. Why am I in business? To keep delivery businesses in business?"

Though he refuses to sign up for any of their services, Bathish doesn't object to them posting his menu or buying his food, as long as they pay full price and he doesn't have to give it any thought. But he counsels app users to check online prices carefully. The sales reps from these companies, he says, "actually say you can have a different menu. They tell you 'let's say you charge $10 for a sandwich--well, you can charge $11'" on the app.

---

Observer senior designer Tabi Walters has fourteen delivery apps on her phone. Some, like Panera, are dedicated to particular restaurants. Others occupy specialized niches: "Slice is for pizza and MiFan is good for Asian," she says.

She uses all the mainstream apps too, and ticks off their pros and cons: "EatStreet I like because of their loyalty points. Grubhub is fun because of the tracker," she explains one day at the Observer, as she waits for a Grubhub driver to deliver a sushi burrito and bubble tea from Wild Poke.

"I just got an update! Look, it's moving," she says, as the little car icon pulls away from the curb. "It says he will be here between 12:20 and 12:30." It actually arrives around 12:40, fifty-five minutes after she placed the order. Untroubled, she normally avoids peak hours: "I usually try to wait until after two."

Opposite North Campus, the Evergreen Chinese restaurant has embraced the apps.

A row of tablets mounted behind the front counter, each dedicated to a different delivery company, spring to life as the orders come in. But the customers don't necessarily know they're ordering from Evergreen. Owner Greg Guo has worked with the apps to invent two virtual stores.

Tea Leeves--which specializes in bubble tea--announces itself on a poster board in the lobby. But nothing in the restaurant's signage or menu suggests an entity called Evergreen Veggie Kitchen. Existing only online, it was invented to steer app searches to Evergreen's extensive vegetarian offerings.

Another campus-area restaurant that embraces delivery is Ahmo's on Huron and its cousin Luna's Mexican Street Food (they have separate counters but share a seating area). Ahmo's/Luna's are in the shadow of several student high-rises and fit the profile courted by all the delivery apps: inexpensive, easily packaged, familiar food with lots of options under one roof. It was unclear whether manager Wally Hadad was too busy to talk about the details or whether he was actively avoiding it, but workers confirm that they deal with all the apps.

If there was any agreement between all these restaurants, it was that food delivery is not a flash in the pan. And Bathish snickered as he points out a delicious irony. "If nothing else, it's at least introducing my food to drivers," he says. "I've had guys come in here and say 'I never knew this place was here,' and the next day they'll be in ordering an acai bowl for themselves."     (end of article)

 

 
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