Anson Stevens-Bollen
In one of the more delightfully punk-rock happenings this week, Vinaigrette owner Erin Wade has penned a real doozy of an open letter for Matt Maloney, the CEO of food delivery service Grubhub.
In the letter (which is included at the bottom of this piece in full), Wade blasts the concept of Grubhub and other such delivery apps and services, claiming that already thin profit margins are ruthlessly slashed by the company's 30% commission fee. "You are part of the reason why restaurants are so vulnerable to the shock from this pandemic," she writes.
Wade is no stranger to this line of thought, having published op-eds in the Santa Fe New Mexican and the Austin American-Statesman in Austin, Texas, where she opened a satellite Vinaigrette location in 2016. But this time, it was a recent Grubhub commercial espousing family values and the current American restaurant crisis that set Wade off.
It looks like this:
Setting aside the rather saccharine-sweet tone of that ad, one might be forgiven for assuming Grubhub and similar services are really on the side of the restaurants but Wade says their very nature and existence are an affront to brick-and-mortar restaurants, to her customers and to the idea of good food served well with a side of real-life service.
"One of the things that's very frustrating for us is that our customers don't know how bad [these services are] for us," Wade tells SFR by phone from the very farm where many of Vinaigrette's ingredients are grown. "They're exploiting the general goodwill that's been built up for restaurants for hundreds of years."
If Wade had her druthers, most of Vinaigrette's sales would be in-person, sitting down, but the COVID-19 pandemic has shifted how restaurants are forced to business. Still—the worst part? Wade has never even partnered with Grubhub or the other services, but that can't stop them from featuring her menu on their sites or ordering and delivering the food anyway.
"I am not signed up with Grubhub, and the reason I won't sign up for that or Door Dash or the locals, is that they all have the same business model," Wade says. "The basic model is, they charge a commission if you sign up to be a partner, which is, in Grubhub's case, 30% and sometimes more per meal; especially little small restaurants that sometimes make 5% profit, maybe, it's so much more than we make on the meal…they're exacting too dear a price."
Wade says she and her staff had grown accustomed to which "customers" actually work for a delivery service, but notes that the larger issue is in care taken during the delivery process. To-go orders are certainly a part of Vinaigrette's business, she explains, but when it comes to pickup—as in food handed to the customer directly from her own vetted staff—she can guarantee a certain level of quality. When it's being handled by whom she describes as "basically a stranger," however, there's no telling how long the food will sit someplace or whether it will be jostled during delivery—and it isn't Grubhub who faces the repercussions.
"We pay for it," Wade says. "For example, say we have a special salad the customer knows about but they don't see it on Grubhub, so they order a $7 garden salad and write down in the [order comments] that they want yams and pork and everything that goes into the I Yam What I Yam salad…that's an $18 salad."
Wade is not naïve, however. She understands that any local restaurants hoping to survive must make certain concessions, delivery in less than ideal conditions among them. But rather than bow to the Silicon Valley companies, she's launched her own delivery service, which is up and running now.
"It's a temporary solution, but we're also working on our own proprietary platform now," she tells SFR. "Right now, I know the drivers who are taking their food are responsible. They're sanitizing their cars between every trip, wearing gloves and masks—I can't say that about somebody who's a stranger."
It's hard to say what the effect of her letter will be otherwise. Many reading this right now are probably wondering what they're supposed to do during the pandemic and many reading this will probably continue to use these services.
Wade concedes that there is truth in that need, and that it's not going to be possible for every restaurant to put together their own services. Still, she says, with things looking like they do, some Silicon Valley-based middle man simply hurts the bottom line of locally owned restaurants, no matter how pretty their commercials might be.
"Luckily I'm super-scrappy," she says with a laugh. "I've got deep scrap-itude."
Read Wade's letter below in full:
Dear Matt,
Your recent ad is very good. It is also very wrong.
You show us real footage of real people working in corner joint restaurants. You remind us that restaurants are our family. These are the places and workers that enrich every city and town in America, and they need our help now.
But telling us that we can save them by ordering from Grubhub? Matt, you helped make this crisis.
Mandatory shutdowns have been crushing for restaurants because we had thin profit margins to begin with, often 10% or less. You know this. But you charge restaurants that "partner" with Grubhub more than they make per meal. You are part of the reason why restaurants are so vulnerable to the shock from this pandemic.
In the past you've justified Grubhub's 30% fees by saying the new business you bring will make it to the bottom line at a lower marginal cost. Many of our costs are sunk, you say.
But this is not true. We already make less on to-go orders than in-house service. And, in many cases, you are not adding new customers to our base, but converting old ones into Grubhub customers.
You have encouraged customers to consider us an inconvenience and to order delivery via screens more of the time. This has been bad for restaurants. As takeout sales increased, we have had to cut jobs we could no longer afford.
And the servers who do the work of preparing to-go food so it doesn't suck when it gets home lose the tips that are their livelihood. Instead, we hand our food to a total stranger-a Grubhub driver.
Before Covid, New York City Council had proposed legislation to regulate third-party delivery platforms by capping their predatory fees at 10%. Representatives from your company said this would hurt the small businesses who rely on your service.
But small businesses don't rely on you. They are trapped in a destructive cycle you helped create. On the one hand they need you to access customers increasingly cocooned in algorithmic preference bubbles and attached to screens. On the other hand, the cost is so high they can never get ahead-like the addictive cycle of high-interest payday loans.
Sometimes you exacerbate this dependence by setting up shadow websites that are similar to restaurants' organic sites but take customers to Grubhub instead. This confuses customers, dilutes restaurant brands and search rank, and costs the restaurant their profit margin.
If we don't sign up for this "partnership," you pirate our menus off our websites and take orders from customers anyway. The pre-charged payment cards sometimes don't work and everything we made languishes, unpaid for. We field angry calls from customers who think it's our fault they didn't get the food they ordered.
When my manager called customer service to tell you how unfair it is that we are paying for your mistakes, he was told "Well, none of this would happen if you would just sign up with us." Which sounds a lot like what the mob boss says, after they burn down your house.
Restaurant owners don't think of you as family, Matt. We think of you as a bully. You have huge marketing budgets and unprecedented scope and scale of knowledge about our customers that you have used to disrupt an industry that has been supporting communities since the Middle Ages. You are mining information from us to create your own "ghost kitchens" which will put many mom and pop shops out of business.
If we are saved, it will be in spite of you, not because of you. It will be because people come back out to see us, so we can support our crusty old dishwashers and our whip-smart bartenders and our teenage bussers and our shit-talking line cooks. That's our family.
Erin Wade
Restaurant Owner
