Businesses utilising food delivery apps have become used to the need to pay up to 30% of their revenue, in addition to set up fees, maintenance fees and hefty advertising fees, or risk the possibility of becoming ‘irrelevant’ in a convenience hungry market that is happy to pay a premium on the cost of the food in addition to delivery fees, service fees and priority fees.
It isn’t the 30% of revenue that businesses are giving up. What they are giving up is data, relationships and a direct psychological connection to their customers. I’m not ordering pizza, I’m ordering Uber Eats.
If you want to know what that connection is worth, look at what the platforms will spend to keep it. New York City legislated in 2021 to require delivery apps to hand a restaurant, on request, the name, email address, phone number and order history of the customers it had fed. The platforms did not negotiate it and they did not price it, they took the city to federal court, and in September 2024 they won. Nobody litigates to a constitutional finding to protect a by product. The commission is what the venue notices every month. The customer file is what the platform is actually buying.
Toys R Us is the example everyone reaches for, and the real version is worse than the one usually told. They did not refuse to go online. They went online, had a disastrous Christmas in 1999 when their own fulfilment failed to deliver, and in 2000 signed a ten year exclusive agreement handing their online sales to Amazon, with toysrus.com redirecting to Amazon’s toy department. When Amazon let other sellers in, Toys R Us sued and won, and was released from the contract in 2006. By then Amazon held a decade of toy category demand data and Toys R Us had no online customer relationship left to return to. Being right in court is not the same as owning the customer.
This is a fundamental for anyone running a business, the fear of irrelevancy now is increasing the likelihood of it later. Supermarkets are building dark stores that have no customers, only delivery. Food delivery apps have set up dark kitchens in a few key cities, running half a dozen brands out of a single address, and the customer ordering from them has no way of knowing. None of that gets built on instinct, it gets built on the demand data that venues have been handing over one order at a time.
The position is not to walk away from the platforms. They deliver genuine volume, particularly for a new venue or a quiet Tuesday. The position is to stop treating the platform as the relationship. Use it for acquisition and own the repeat.
Now is the time to reengage with the customer base, to ensure that the care and effort put into every meal is associated with the brand. Build your own website that can take orders. Put something in every delivery bag that gives the customer a reason to come direct next time. Capture the details of the people who sit in your dining room. Band together with local shops to hire delivery staff. Push collection, which costs closer to 6% than 30%. And most importantly, take back the customer relationship that has been so fundamental to growth in food businesses.
The 30% you can see on the invoice. The rest of it you only notice once it is gone.
This is a channel strategy question before it is a hospitality one. Any business that acquires through a marketplace it does not control is carrying the same exposure, and most have never put a number on it.
Janus Advisory works with owners and boards on where margin is leaking, what a channel dependency is actually worth and how to take the customer relationship back. If you would like a view on your own channel mix, we would welcome the conversation.
