LAKEVIEW — Cinco de Mayo is a busy time for restaurants like Cesar’s Killer Margaritas on Broadway in Lakeview. This year, however, the spot won’t be packed with people enjoying margaritas and tacos with friends.
To help the restaurant make up for the lost revenue during the coronavirus outbreak, Cesar’s will try something new on Tuesday: it wont accept orders from third-party apps.
Cesar’s is among many restaurants in the city asking customers to skip popular ordering apps like Grubhub and Uber Eats, and to order directly from the business instead.
“Desperate times call for desperate measures,” said Israel Sanchez, owner of Cesar’s on Broadway. “They’re really taking advantage of the situation. [Working around the apps] allows for some more cash flow now.”
Despite being considered essential businesses during Illinois’ stay at home order, the restaurant industry has been hit hard by dine-in bans. The National Restaurant Association estimates 15-20 percent of restaurants nationwide will close for good as a result of the pandemic, which would mean losing up to 1,500 independent restaurants in Chicago alone.
With delivery and pickup as their only lifeline, restaurants are trying to educate customers on the impact of third-party businesses. Some owners are sharing their GrubHub invoices on social media. One viral Facebook post shows the service taking almost 70 percent of the total delivery revenue from a restaurant in March.
The invoice was shared by Giuseppe Badalamenti, a Chicago-area restaurant consultant who has worked with places like Bridgeport’s Stix-N-Brix. Badalamenti said the invoice was from an “anonymous” locally owned restaurant client of his, and that it is the “most extreme case” of inequitable profit sharing he’s seen. Most third-party services take about 15-45 percent of an order’s cost, he said.
“They’re driving these restaurants into a deeper hole,” Badalamenti said. “They’re all fed up with it, but they feel it is a necessary evil.”
Sanchez is now offering delivery through Cesar’s using his personal car. He’s arranged for school communities in his neighborhood of Edison Park to order in groups and pick up from the school parking lot. A portion of the sales go to the school, while the Lakeview restaurant gains new customers that don’t regularly frequent the business, Sanchez said.
“We can’t rely on the government, because there’s a long wait for help,” he said. “I had to do something. I thought, ‘You can’t come to us, but I can come to you.'”
Services like GrubHub allow restaurants to chose the level — and cost— of their partnership. The invoice that was widely shared includes costs for marketing, which is an added cost for the business. The bill also included special discounts that the restaurant was running.
Grubhub only bills restaurants when the service helps “generate sales,” said Jenna DeMarco, spokesperson for the company. Grubhub is also donating more than $1 million per month to organizations supporting restaurants and plans to run a new special that will generate $100 million in sales for participating restaurants.
“Grubhub is happy to work with restaurant partners to help them manage costs and grow their business,” DeMarco said in a statement.
Ordering directly from restaurants allows the business to make more money and employ more staff, business owners said. Given these unprecedented times, doing so might help Chicago retain its world-class restaurant industry.
“Often these apps are taking like 30 or 33 percent off the the top of an order while I’m still trying to buy quality ingredients, keep paying employees and paying my rent,” said Simo Yacobi, owner of Ravenswood’s Chez Simo Bistro. “Besides the GoFundMe, the most important way to help is to order directly from us.”
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