yesEmily BirnbaumNone

Get access to Protocol

I’ve already subscribed

Will be used in accordance with our Privacy Policy

The Small Business Recovery

Delivery apps say they’re trying to boost Black-owned businesses. Is it working?

The relationship between restaurants and third-party apps can feel abusive and exploitative, and Black restaurant owners say the initiatives aren't fixing that.

Delivery apps say they’re trying to boost Black-owned businesses. Is it working?

Have the delivery apps really happened small, Black-owned businesses?

Photo: Patrick T. Fallon/Bloomberg via Getty Images

Michelle Andrade says the D.C. restaurants she manages, HalfSmoke and Butter Me Up, have benefitted enormously from delivery service apps like Uber Eats, DoorDash and Postmates.

Delivery apps helped Andrade reach a wider customer base and simplified the logistical challenge of a small business getting food to people's homes. And it's hard to tell, but Andrade said she believes her restaurants benefitted slightly from the apps' initiatives to boost Black-owned businesses in the wake of this summer's reinvigorated civil rights movement.

They are a large source of revenue for her businesses. But the relationship between restaurants and third-party apps can feel abusive and exploitative, as the apps take significant cuts from every order they facilitate and flatten the relationship between the customer and restaurants they love. "I think it's totally a scam, how they make money off of us," Andrade told Protocol. So she's discovered a workaround: She places notes in delivery bags urging customers to place their orders directly with the restaurant next time, cutting out the dreaded middleman of third-party apps.

Andrade is not alone. During a pandemic that has disproportionately shuttered and devastated Black-owned businesses, Black restaurant owners are desperately seeking out digital tools to help them navigate a delivery-first world. It's a stressful pivot for businesses that typically rely on support from their communities, especially when Black and Latino neighborhoods have been hit hardest by the pandemic.

In the wake of the George Floyd protests, some of those delivery apps, like Uber Eats and DoorDash, launched new initiatives to support Black restaurants specifically. They cited statistics that showed only 130 Black-owned restaurants received government support loans, and those that remained open were struggling to keep the lights on. But some Black restaurant owners say those initiatives have fallen short and failed to address their primary concerns around how the apps operate.

"It's at too much of a price to me," Deborah Vantrece, the owner and executive chef of Twisted Soul Cookhouse & Pours in Atlanta, said of the charges from delivery services. "We're talking [a] 33%, 25% [cut] or more, then you come in with additional fees."

Vantrece said she believes the delivery apps are taking advantage of the public. Earlier in the pandemic, Vantrece considered using delivery services like Grubhub, but when the company sent her their materials, she calculated that the fees alone might have put her out of business, as she would be losing too much per order. Instead, she decided to pour resources into making her restaurant as COVID-safe as possible, and even had her employees do some deliveries in the first few months.

She said the companies' initiatives to boost Black-owned businesses ring hollow to her. "Ask me as a Black restaurant owner, 'What do we need?' The last thing that I'd think of is, 'I need you to give me a discount on delivery.' That's not my answer."

How the delivery apps decided to spotlight Black-owned businesses

The initiatives launched by Uber, DoorDash and Postmates share some similarities. Each of them waived delivery fees for customers ordering from Black-owned businesses, an effort to get more people to place orders — at least until the end of the year. Each company compiled lists of Black-owned restaurants to highlight on their apps and websites. (Grubhub, the fourth major delivery service app, did not launch a similar project, though a company representative told Protocol that Grubhub has donated money to Rescuing Leftover Cuisine, an organization supporting Black-owned restaurants in New York City. The company wasn't immediately available to comment on how much it's donated.)

"As the nation has grappled to address systemic racism throughout our country, we created a way to showcase Black-owned businesses to raise awareness of their businesses on our platform," Postmates said in a statement.

According to the apps, their efforts to boost Black-owned restaurants are effectively helping to harness some of the energy unleashed by the Black Lives Matter movement. Nationally, Uber said it saw orders to Black-owned businesses spike by 75% in the week after it launched its initiative in June. Since then, the sustained lift has remained around 20%, according to an Uber spokesperson. DoorDash said it saw a 50% increase in orders from Black-owned businesses from June to August.

Jalisa Burns, the account manager on Uber's small- and medium-sized business restaurant team who championed Uber's Black-owned restaurant initiative, said she had been working on the idea since she was hired last year.The momentum around Black Lives Matter this summer helped Burns bring her idea to fruition. Over the course of 48 hours, she rallied members from her team, as well as Uber's Black employee resource group, to compile an extensive list of Black-owned restaurants to promote, a feature that now includes thousands of businesses across the country. Burns said the company chose to cut fees for customers, rather than the featured restaurants, in an effort to drive more orders, a need Burns said she had repeatedly heard from owners.

"My focus for my Black restaurants is demand," Burns told Protocol. "How can we get more orders? What can we do on the marketing aspect to get them more orders? We've seen a consistent lift over time." It was a difficult feat to figure out which restaurants to include, and they're still adding new names constantly.

DoorDash's Black-owned restaurant initiative, on the other hand, is opt-in, meaning businesses have to sign up for it. DoorDash's promotion includes 500 restaurants at the time of this writing. "When George Floyd was murdered, we felt compelled as an organization obviously to speak, but beyond that, to lean in and figure out how we could use our platform to help make a difference, and to spotlight this community," Kofi Amoo-Gottfried, DoorDash's vice president of marketing, said.

Amoo-Gottfried said DoorDash is planning to expand its efforts "over the next few months," but didn't expand upon how.

"This type of work is not about a moment in time," he said. "The reality is, if we want to make the experience great on our platform for Black entrepreneurs, we're going to have to constantly identify, source, onboard and make sure we're focusing on those communities."

How these initiatives have gone

Black restaurant owners and representatives who spoke to Protocol said, for the most part, they have appreciated the delivery apps' efforts. "These Black-owned restaurants are primarily found in lower-income neighborhoods and are really known among the community," said Jade Stevens, the executive director of Dine Black LA, a coalition working to support Black-owned restaurants. "By having the visibility that they now have on these delivery apps and having the opportunity to market themselves, they're reaching a new audience that would not probably have found them."

All of the restaurants were aware of the initiatives and said they've seen surges in sales, likely due to some combination of the apps' efforts and the larger national movement to "Buy Black." It's hard to tell how much is directly thanks to marketing on the apps. "[The companies are] not sending me something every month saying, 'This is how many people came to you that I delivered to for free because of Black Lives Matter,'" said Oji Abott, the owner and chef at D.C.-based restaurant Oohs and Aahs. "If they did, that would be beneficial because at least we'd know."

Vida Ali, who works for D.C. landmark Ben's Chili Bowl, said she has been contacted by Uber and participated in a promotional commercial with Grubhub. "You can definitely tell they're making the effort," she said.

But the benefits of third-party delivery services can come with significant costs. Some business owners described feeling beholden to the delivery apps, devoting precious hours into figuring out how to get higher ratings and better promotions from a service that seems like a black box. Ultimately, the restaurants end up paying the price when customers are angry about logistics that are out of their control, such as the amount of time delivery takes, the temperature of the food or if certain items wind up missing. "The tablet is the customer, but it's a customer that you can't fully get in touch with," Andrade said of the apps' delivery devices.

And some feel they're forced into a "pay-for-play" situation. The apps charge them a significant fee — typically between 15% and 30% — of each order, and even more if they want special kinds of marketing help, like promotions or deals for customers. That being said, for most restaurant owners — particularly those who are struggling right now — it's far too expensive and time-consuming to set up a delivery service on their own, even if they might want to.

Abbott of Oohs and Aahs, who has begrudgingly started using delivery apps during the pandemic, said he's learned to negotiate in order to get a better deal from the companies, but still feels aggravated as the apps get "all the daggone money."

Delivery cap controversy

Cities across the country have heeded restaurant owners' concerns, issuing emergency orders to cap delivery fees for restaurants in order to ease some of the strain. It's become a fierce battle as each of the delivery companies have fought back hard against those limits, claiming they make it harder for them to operate in certain marketplaces, as the costs to do so would be too high.

"Regulating the commissions that fund our marketplace forces us to radically alter the way we do business and ultimately hurt those that we're trying to help the most: customers, small businesses and delivery people," an Uber Eats spokesperson said.

It's hard for restaurants to even tell if the delivery caps are working as intended. Marques Williams, an owner of Honey's Kettle Fried Chicken in Los Angeles, said he's been poring over his restaurant's financials to ensure the companies are adhering to the city's 15% cap. And Andrade, with HalfSmoke and Butter Me Up, said she's hardly seen a change because the apps charge for so much more than just delivery — including a commission, sales tax and direct deposit fees — and ultimately their cut ends up being around 30% anyway, she said.

The delivery cap in Los Angeles was extended in August, and Stevens with said she's still working with restaurants to understand how it has affected them. She's heard from a few that they struggled to work with some delivery apps. "I don't know if it did the good we hoped for," Stevens said.

Where Black-owned restaurants go from here

It's unclear what will happen with emergency delivery caps across the country; some of them may become permanent, to the chagrin of the delivery apps. There's an ongoing campaign by the anti-monopoly group the American Economic Liberties Project called " Protect Our Restaurants" aiming to press regulators and government officials into investigating the delivery apps' business practices further. Those advocates are actively holding meetings with the heads of the Federal Trade Commission this month.

In the meantime, some restaurant owners, fed up with the current situation, are turning to different digital tools to aid their businesses, including specialized apps like Black and Mobile, a delivery app, and EatOkra, a discovery app for Black-owned restaurants.

Kevin Edwards, who leads EatOkra's customer success team, said "a lot of these smaller mom-and-pop restaurants, especially in the Black community, either don't have the time or the resources" to keep up with marketing their restaurant while they're struggling to keep their lights on. He sees EatOkra as a solution to the "what now?" question after restaurants get on mainstream delivery service apps. He and his brother Anthony, the app's co-founder, are working to build out its marketing and newsfeed products in order to help drive more attention and discovery of Black-owned restaurants.

Most restaurant owners said they feel stuck with the mainstream delivery apps; even beyond the pandemic, it's likely that delivery will remain more important than it ever was before. So now it's a matter of asking them to live up to their stated support for the Black Lives Matter movement.

Williams from Honey's Kettle Fried Chicken is a believer in the delivery apps. He and his family have recently started two new delivery-only locations, consisting of only a kitchen and merchandise. But he said there's more to do if the companies want to really support Black-owned restaurants through the hardest time in many of their histories.

"How cool would it be to see one of our on-demand partners raise their hand and say that they want to be the leader of a community, meaning they want to be the one-stop source for how to yield the best results if you don't know what to do right now?" Williams said.

In the wake of the George Floyd protests, Uber Eats, Postmates, DoorDash and Grubhub all pledged huge sums of money to national civil rights organizations. Stevens with Dine Black LA said she understands that inclination but that it could be even more significant if the companies cut checks for the restaurants they partner with that are on the brink of closing. "That's what's missing: finding a way to get these funds directly back to the restaurants so that they can survive," Stevens said.

Abott with Oohs and Aahs put it more bluntly. "Cut me a check!" he said. "They've collected money that they could use for promotions. Give it to the companies that need it."

The Small Business Recovery Manual:

  1. How small businesses are using tech to get through COVID
  2. How Etsy stopped showing beauty products to mask buyers
  3. Delivery apps say they're trying to boost Black-owned businesses. Is it working?
  4. Flowers, food and wine: How the push to sell online has permanently changed businesses
  5. Why large businesses should think like small businesses
  6. Yelp's pivot to helping small businesses during the pandemic
  7. How businesses can use tech to punch above their weight — even in the middle of a pandemic
  8. This startup is steering money to Black and women-owned businesses
  9. Braintrust: The next step SMBs need to take after going digital
  10. 'Netflix for apps': Setapp's quest to build a better app store
  11. The technology that'll help small businesses in the next pandemic
  12. Dark kitchens are a light for COVID-struck restaurants
The Small Business Recovery

Dark kitchens are a light for COVID-struck restaurants

The delivery-only restaurant concept has been accelerated by the pandemic.

A little Chow Mein from restaurant China Live, prepared out of a dark kitchen by Virtual Kitchen Co.

Photo: China Live

It's a dark time to be in the restaurant industry. By the end of July, almost 16,000 restaurants had permanently closed across the U.S., a number almost certain to increase as the pandemic keeps restaurants shut through the winter. But for some, COVID has also been an opportunity to experiment with a new business model: dark kitchens.

Alternately known as dark kitchens, cloud kitchens, ghost kitchens and virtual kitchens, the concept is the same: Delivery-only food operations with no space for in-person dining or, in some cases, collection. The idea has been percolating for a while now, pioneered by the U.K.'s Amazon-backed Deliveroo in 2017, while Uber founder Travis Kalanick famously has his own venture, CloudKitchens, which he started after his ouster from the ride-hailing company in 2017. And with an increased desire for social distancing and staying at home as much as possible, COVID seems to have only accelerated the trend.

Keep Reading Show less
Shakeel Hashim

Shakeel Hashim ( @shakeelhashim) is a growth manager at Protocol, based in London. He was previously an analyst at Finimize covering business and economics, and a digital journalist at News UK. His writing has appeared in The Economist and its book, Uncommon Knowledge.

The Small Business Recovery

The technology that’ll help small businesses in the next pandemic

COVID-19 has accelerated all sorts of business transformations, but some just weren't quite ready yet.

Robotic deliveries are coming — but not in time for this pandemic.

Photo: Nuro

The weather is turning cooler and you realize you really need a new coat and a warmer face mask. You open your favorite shopping app with retailers from around your neighborhood, and see a coat and mask you like. You stand in front of the mirror, wearing your AR glasses, and try both items on. You like them and decide to buy them. The app triggers a drone to have the items delivered to you from a local fulfillment center a couple towns over. They'll be there in about 15 minutes. While you wait, you order some groceries, and the robot that's sent to deliver them tells you a friend also purchased you an arrangement from the florist down the road that will be in the order with your groceries. She says the flowers are to celebrate your birthday at home, seeing as parties are forbidden right now.

As much as the prospect of another life-altering pandemic is likely the last thing anyone wants to think about as the current one still rages on, experts say it's entirely possible that another one could breach our shores in the near future.

Keep Reading Show less
Mike Murphy

Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.

The Small Business Recovery

This startup is steering money to Black and women-owned businesses

Roshawnna Novellus wants people to put "their money where their heart is" — and her lending platform can help facilitate it.

EnrichHER's Roshawnna Novellus.

Photo: EnrichHER

Roshawnna Novellus knows what it's like to have your business upended by the pandemic. She struggled over the past two years to move her lending startup, EnrichHER, through the regulatory compliance process, only to watch the economy tank amid widespread lockdowns, disrupting her business model built on lending money to small, women-owned businesses. She says she was tempted to throw away her plans and go back to working a 9-to-5.

Instead, in August, she launched All Rise Factory, a program that aims to fund more than 100 women-owned businesses over the next year. The new model allows funders to join with only $97 — and to decide whether they want to lend or donate.

Keep Reading Show less
Emily Birnbaum

Emily Birnbaum ( @birnbaum_e) is a tech policy reporter with Protocol. Her coverage focuses on the U.S. government's attempts to regulate one of the most powerful industries in the world, with a focus on antitrust, privacy and politics. Previously, she worked as a tech policy reporter with The Hill after spending several months as a breaking news reporter. She is a Bethesda, Maryland native and proud Kenyon College alumna.

The Small Business Recovery

'Netflix for apps': Setapp's quest to build a better app store

A subscription to the app store could be a great business — and a crucially stable one, in these uncertain times. But it hasn't always been easy to build.

Setapp founder Oleksandr Kosovan.

Photo: Setapp

Oleksandr Kosovan has been frustrated with app stores since way before it was cool to be frustrated with app stores.

Kosovan is the founder and CEO of MacPaw, a Ukraine-based app development company that originally started in 2008 with a tool called CleanMyMac. When CleanMyMac was new, there was no Mac App Store. Even when Apple launched the store, in 2011, "it was very limited in functionality," Kosovan said. The MacPaw team decided to promote a better way, to help developers sell their apps themselves. They built systems for testing early builds of apps and distributing finished ones, and tried to make it easy for developers to keep selling their wares outside of the App Store.

Keep Reading Show less
David Pierce

David Pierce ( @pierce) is Protocol's editor at large. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.

The Small Business Recovery

How businesses can use tech to punch above their weight — even in the middle of a pandemic

With no choice but to move online, Square's Alyssa Henry talks about how tech stepped in to support small businesses.

Though Square is often known for its square-shaped card readers and digital cash registers at stores, it had actually been laying the groundwork for shifts to online and omnichannel retail for years.

Photo: Square

When the pandemic hit, how consumers shopped and how businesses operated changed overnight. With in-person selling no longer an option, stores and small businesses had to figure out how they were going to make things work.

At Square, a lot of that problem-solving fell to Alyssa Henry, the head of the company's seller ecosystem. Henry oversees everything from marketing to engineering for Square's seller products, including its point-of-sale software and online stores. "Everything was shut down initially and so all of a sudden, these sellers had had no revenue coming in, so they had no cash flow," Henry said.

Keep Reading Show less
Biz Carson

Biz Carson ( @bizcarson) is a San Francisco-based reporter at Protocol, covering Silicon Valley with a focus on startups and venture capital. Previously, she reported for Forbes and was co-editor of Forbes Next Billion-Dollar Startups list. Before that, she worked for Business Insider, Gigaom, and Wired and started her career as a newspaper designer for Gannett.

Latest Stories