South Shore Restaurant Ditches Food Delivery Apps Made Popular During The Pandemic; 'I'm Not Making Money'
CHICAGO (CBS) -- Since the pandemic started, ordering take-out is now the norm.
But sky-high third party delivery app fees could mean mom and pop businesses are closer to closing their doors. CBS 2's Sabrina Franza spoke with one owner who is quitting the apps before it's too late.
Majani serves up vegan soul food.
"Provide a service that was much needed in the South Shore," said restaurant owner Tsadakeeyah Emmanuel.
So, much of their business is take out
"100% of our sales is technically take-out."
Too much off their profit is going back to delivery apps.
"170,000 in business came through those platforms, $50,000 of that went back to them."
That's almost 30%.
"I'm not making money. I'm not making a profit off of that model."
Mejani already closed two other locations during the pandemic. After the city's temporary limit on third party delivery fees at 15% expired, they're closing their Uber Eats, GrubHub and Seamless accounts too.
"If you want us to survive, go to our website. Order through our website," Emmanuel said.
Even if it means losing visibility, or a customer base, they're taking the risk for a higher reward.
"I think we'd be better off taking those dollars towards local advertisers that we have a better relationship with as opposed to someone who's not invested in our community," Emmanuel said.
To try to get customers to switch over, Majani has been stapling cards to every single take out order that goes out.
One statement from Uber Eats the week of January 4 said for 79 sales, the restaurant paid $686 to Uber Eats, that's almost a quarter of their pre-tax earnings.
CBS 2 asked Uber Eats for a breakdown of where their fees go and asked the company to justify why their percentage is so high while businesses are still relying on take-out orders during the pandemic. The company has yet to respond.
