Food Delivery Apps May Be Hurting Local Chattanooga Restaurants

Since The Onset Of Covid, Local Restaurants Have Been Struggling To Stay Afloat. Many Have Turned To Delivery Apps To Continue Operations. However, In Many Cases, These Apps Could Be Doing More Harm Than Good.

Chattanooga, TN – Since the Covid-19 pandemic hit Hamilton County early this year, businesses and citizens alike have been adapting as best as they can. For local restaurants, this meant relying on delivery services during the months they had to keep their dining rooms closed.

Many started using delivery apps, such as DoorDash, GrubHub, and PostMates. However, these apps could be doing more harm than good for local restaurants.

This had led some restaurants to using delivery options intended for local chains.

Max Poppel at Flying Squirrel as well as Jake Raulston at Naked River Brewery have taken to using Dinner Delivered, which works similarly to other delivery apps.

When talking about Dinner Delivered, Raulston said, “They are absolutely fantastic. I feel like some of the others, and I won’t name names, are complete scams. At least for us they were. Maybe it works for some of the bigger chains. We don’t have the big profit margins. We don’t even have a freezer. Everything is fresh.”

Since the beginning of the pandemic, over sixty percent of Americans have drastically cut back on eating out. Over the past several months, over one hundred thousand restaurants have gone out of business because of this. The food service industry as a whole is projected to lose around $240 billion just this year.

The DoorDash delivery app has been around since 2013, and every year since then they have lost money, but this year their stock has gone up eighty-six percent. Even restaurants that never had delivery options before are turning to apps like this to make up for lost income.

Local restaurants in Chattanooga have either signed up for these services, or hired on more staff members to offer their own delivery options.

Apps like DoorDash can increase restaurant prices by thirty percent, in addition to charging for delivery. For local restaurants that already have a thin profit margin, this can cause them to keep losing money.

However, for some restaurant owners, they have been able to reach new customers by using these apps. Diamond Brown at Chatty’s Restaurant said, “Not everyone wants to come to this neighborhood, and not everyone wants to eat in a restaurant right now, so it’s been good for me.”

Raulston added that there are other expenses that come with adding delivery options, whether it is through a local service or a big app like GrubHub. Restaurants have to purchase additional containers that can keep the food hot or cold, as well as disposable utensils and straws.

Dinner Delivered currently works with around two hundred restaurants and they have around five hundred drivers working for them. They serve Chattanooga, as well as other nearby areas. General Manager Aliyah Wilson says they want to work with local restaurants as well as customers.

Wilson said, “We want the customer and the restaurant to use us again and again. We work with the restaurant on the upcharge fee, and we cover taxes and the credit card fee. For us, when you call you get a real person, and if you have a problem and call you either get the same person you talked to or someone sitting next to that person.”