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

Photo: Patrick T. Fallon/Bloomberg via Getty Images
Delivery apps say they’re trying to boost Black-owned businesses. Is it working?
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.

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.

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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."

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