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Restaurants, delivery apps at odds

The COVID-19 pandemic has forced local restaurants to adapt in many ways, but one of the most hit-or-miss changes — particularly for those who had not used them previous to the pandemic — was the use of delivery service apps.

The majority of restaurants around the country and world — both chain and local — had no choice but to turn to third-party companies when COVID-19 first forced them to shut down in-person dining, and Altoona-area businesses were no different.

The third-party services are led by giants DoorDash and UberEats in what has become closer to a monopoly of an industry as competitors have been gradually bought out and absorbed. UberEats merged with rival Postmates near the start of the pandemic in June 2020 for a reported $2.65 billion.

Zach’s Sports & Spirits has experienced a lot of success on both apps since joining, and bar manager Jared Alwine attributed a lot of the restaurant’s takeout success to its presence on the services.

“When we were shut down, that definitely was a big attribute for us being able to stay open,” Alwine said. “People had the option for either DoorDash or UberEats, and it helped us stay competitive in a small town.”

Zach’s had started using both apps before the pandemic and only saw its numbers increase over time, with Alwine saying that the nighttime rush has been the most profitable because Zach’s keeps its whole menu available on DoorDash and UberEats late into the night.

UberEats and DoorDash have both yet to make a profit since their inception, despite the surge in users since the start of the pandemic. DoorDash reported its first quarterly profit in the second quarter of 2020, but still reported an overall loss on the year.

Both services reported massive revenue in 2020, thanks in large part to the influx of new customers who were confined to their homes by the pandemic. UberEats generated $4.8 billion in revenue, while DoorDash increased its revenue by 241%, from $850 million to $2.9 billion, also in 2020.

Contrary to the reported experience of many restaurants and food services across the country, some local spots like Zach’s have not felt the same downsides of the various apps.

With the fee charged by the delivery services, restaurants have to increase their prices on the apps to ensure they retain their profit margin. Mike Luciano of Mike’s Court said that it did not create many issues and the business received a steady flow of orders even with the price hikes. Alwine did not say Zach’s had run into any pricing issues, either.

Luciano said the issue for his restaurant has been handling different rush periods when it becomes difficult to keep up with the delivery orders and the orders of the in-person diners now that most restaurants in the region have been able to reopen their doors.

“When you’re not overwhelmed, it’s a very nice thing to have,” Luciano said. “The hard part is when you’re busy, you have to get the orders out in a certain amount of time. There are times when you become overwhelmed and you’re able to suspend the app.”

Even with the arrival of the vaccine and more businesses opening back up, some national surveys have shown that many people will continue to order out through delivery apps because of the convenience. Luciano sees this as just another evolution of the industry and restaurants will continue to grow with the changes.

“It’s a different world we live in now,” he said. “People like to be at home and get their food delivered. It’s been going on with pizza for years and the pandemic has strengthened that process.”

Mirror Staff Writer Nate Powles

is at 814-946-7466.

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