![]() “The 30¢ doesn’t sound like much, but 100 orders a night adds up to $30. And because Seamless is huge, it gets an even better rate than that.” “Compare that to the 2.7% we pay credit-card companies on transactions at our restaurant. And even though all Seamless is doing is taking the order and charging the credit card-something that might reasonably be covered in a 12.5%-20% commission-it tags on a credit-card “processing fee” of 3.05% plus 30¢ per order. So if a restaurant is paying a commission of 20% or less, it’s solely using Seamless to facilitate the transaction the marketing component is negligible to nil. But now the only way I can get that business is via Seamless-which takes 12% off my revenue.” “Before Seamless I had a thriving delivery business with Citigroup. And many companies now insist that their employees use Seamless for late-night meals. The companies get billed directly and the employees don’t have to go to the trouble of getting reimbursed. In a brilliant move, Seamless effectively cornered the delivery market by offering corporate accounts that allow employees who work late to order through Seamless, but only after a certain hour and up to a certain dollar amount. The commission structure particularly galls restaurants that do a lot of corporate business. “I don’t know why anyone would pay anything other than the minimum, because what’s the point of paying 17% to get on the seventh page of results?” But it’s helpful for marketing-maybe a customer will try us and then come back in person.” We don’t make money on Seamless, however. So some restaurants pay even more than that! But we could feel the difference when we jumped from 15% to over 30%: We multiplied by 10 our orders from day 1. Even by paying over 30%, we’re only on the second or third page. “Their sales rep makes it perfectly clear that you need to pay a minimum of 20% to exist, and the more you pay, the more you appear in the first pages. The percentage is determined by what competing restaurants will pay, and because the process is opaque, restaurants have no choice but to trust that Seamless is not manipulating the rates to its own advantage. To show up on the first few pages of search results, they have to pay much more. They often asked why they couldn’t find us at all.”īut even a 20% commission doesn’t guarantee restaurants much of anything. “We started with 15% but we were not found by our guests. “If you choose the lowest option of 12.5%, you are really relying on people who will already search for you, as you’ll be at the bottom of the list and you might not get any new customers.” Is it cynical to think that this may also be why the company has been less then vigilant about cracking down on false listings? The more results there are, the harder it is for a restaurant to stand out-which makes restaurants likelier to pay more to increase their exposure. This explains why Seamless floods the results with so many restaurants, including ones farther away than your typical delivery zone. Only the name and distance filters appear to be unaffected by the commission. (And unlike with, say, Google search results, there’s no disclaimer.) You do have the option of sorting by other criteria-restaurant name, price, rating, distance, delivery estimate, or delivery minimum. ![]() When you search for restaurants on Seamless, you may have noticed that, in the default view, the results appear to be random, but they’re actually arranged by who paid what. (In April of 2014, under pressure from the New York Attorney General, Seamless agreed to stop including gratuity and tax.) Restaurants can choose from four commission levels (12.5%, 15%, 17.5%, and 20%) the more a restaurant pays, the higher up it will appear in the search results. Seamless takes a percentage, not a flat fee, of the total food and beverage amount, even though its involvement is the same whether an order is for $10 or $250. Note: GrubHub Seamless also owns MenuPages, Allmenus, Restaurants on the Run, DiningIn, and Delivered Dish and from here on out, for simplicity’s sake, I’ll refer to it as Seamless. That’s a quote from one of the 15 local restaurateurs who agreed to talk anonymously about their experiences with the company. “If I stop using them, tomorrow I close the door.” Indeed, with no formidable competitors, GrubHub Seamless isn’t afraid to flex the extraordinary power it has over restaurants that offer delivery. But the cost is substantial, and restaurants-already feeling the pinch of high rent, increased wages, and so forth-no longer believe that the company is on their side. It has made ordering delivery much easier for consumers, and restaurant owners acknowledge that business would be dramatically lower without it. I had heard grumblings about GrubHub Seamless (they merged in 2013) for many months, but not until a Tribeca restaurateur recently vented in detail did I realize that the company warrants a deeper look. ![]()
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