Local restaurant owners weigh in on advantages, disadvantages of third-party food delivery services

During the pandemic, delivery services provided restaurants with a much-needed source of income. Photo by: Matthew Galgano

OSWEGO, N.Y. – With third-party food delivery services having changed the restaurant industry and increasing in popularity post-pandemic, many business owners find them helpful to their businesses, but there are downsides.

Allison Scanlon, co-owner of Oswego sports bar, the Press Box, has had experiences with the positives and the negatives of using third-party delivery services.

“I would say it was good in terms of bringing in business, but it was bad in terms of how our business was presented to the customer because it wasn’t always accurate,” said Scanlon.

When Doordash was first created, the Press Box used the service but soon opted out due to issues with the app mishandling customers’ orders. Scanlon said that the issues were seen primarily with the Press Box’s sandwiches. 

“People would order [an item] and be disappointed they didn’t get the [correct item], and we would have to make the sandwich on our end, so we would be losing money,” said Scanlon. “They wouldn’t charge the delivery service for them putting the order in wrong.”

After these issues were negatively affecting the company, the Press Box decided to do away with all food delivery services. However, this does not mean that the Press Box has completely given up on third-party delivery services.

“That’s something we’re thinking about in the near future because I do think there’s a big market in this area, especially with college kids, that would prefer just to have things brought right to them,” said Scanlon.

While third-party food delivery has its benefits, many restaurants have criticized the service for implementing high commission fees. 

In a 2024, Informs.org report done on commission fees titled, “Regulating Powerful Platforms: Evidence from Commission Fee Caps,” it is reported that in certain cities third-party delivery apps charge restaurants a commission fee of up to 30%.

The popularity of third-party delivery services is continuing to grow. According to statistics from Doordash’s 2023 Restaurant Ordering Trends Report, 80% of American diners are ordering online the same amount or more than the year before. 

According to the same study, in one month 44% of U.S. diners ordered food two to four times and an additional 23% ordered food five to seven times. 

The report also showed that food delivery is more popular with younger generations. 47% of Generation Z in the U.S. and 39% of millennials are ordering online more compared to only 26% of Generation X and baby boomers.

To combat high fees, state legislatures like New York have put laws in place to limit the commission fees that an app can charge on a restaurant. Because of this, third-party delivery services like Uber Eats, Grubhub and Doordash sued New York City in 2021 for implementing a law that caps the fees at 23%.

Joseph Garafalo Jr., co-owner of Oswego deli, Garafalo’s, does not see the commission fees as a huge issue for his business. 

“They allow us on our end to raise our prices a little bit to cover for the commission fee. So that’s one way you can combat it,” said Garafolo.

Doordash has benefited business at Garafalo’s by allowing customers to order products  from their home. Garafolo also says that the use of Doordash has not affected the in-person business at all. 

“It’s like found money,” said Garafolo. “It’s found business that you wouldn’t have had otherwise.”

Benjamin Harris, assistant manager at Oswego restauraunt Cam’s Pizzeria, has his staff deliver the food manually without the use of a third-party service. This is done at Cam’s in order to keep the business in the store rather than money going out the door. 

“We’re just kind of doing the work versus being the middlemen,” said Harris. “We’re actually the ones out there… delivering it, showing it.”

Harris also feels that using his own staff to deliver food is more reliable for the customers. 

“Usually it’s a quicker, more efficient process because then once the food’s done, we already have the people here to take it. It doesn’t have to sit and wait for the [third-party] communication to go ‘here’ to that [driver],” said Harris.

While right now Harris does not see a third-party delivery service benefiting Cam’s Pizzeria, the possibility of it in the future is not out of the question for him. 

“​​If there’s a more streamlined, more efficient process for it, it could change my mind,” said Harris. “Just a more efficient way to either have more drivers within the area that are available to take deliveries and get to the restaurant sooner to get the food out.”