Restaurants, drivers grapple with challenges from expansion of food-delivery apps
Stephanie Stefan can wait up to 20 minutes for a DoorDash order to be prepared by a restaurant, only to make between $5 and $6, she said.
The 50-year-old Jeannette resident has worked as a driver for the popular food delivery app for three weeks. She already has reservations about her decision.
“I really like doing it. … And it’s really not that bad of a job. It’s just that I don’t think the pay scale, I think they’re kind of shady on that,” said Stefan, who is classified as an independent contractor for the San Francisco-based start-up.
According to Stefan, drivers are given a guaranteed wage for each delivery. Rather than add tips to that amount, DoorDash uses tips to pay the guaranteed wage, she said.
For an Applebee’s delivery order Stefan completed July 27, her guaranteed wages were $6.55. The customer tipped $8.44 on the transaction, and DoorDash gave her a base pay of $1, so her total profits earned were $9.44. She earned a total of $47 that night.
DoorDash is now changing its tipping policy, The New York Times reported, after widespread outcry for most of the year.
“You’re only paying me, mainly, a dollar per run if the customer tips me,” Stefan said. “Why are you paying a dollar and the customer’s tips making up the rest of my pay? That just seems shady to me. At least, you know, pay a guaranteed minimum of $3 a run or something. Or $5 a run as your guaranteed minimum and then you pay the $5, you don’t take that out of tips. But what can you do?”
Mathew Kostewicz, 34, of Tarentum started driving for DoorDash at the end of last year to supplement his income for holiday expenses. He said the inconsistency of deliveries and pay makes it difficult to plan and budget, seeing hourly pay fluctuations of up to $20 depending on the week.
Growth of digital ordering
DoorDash expanded into Westmoreland County in September, five months after deliveries started in Allegheny County, a company spokesperson said. According to the DoorDash website, 33 restaurants participate in New Kensington, 47 in the Greensburg area, 18 in Trafford and 25 in Ligonier. Searches for restaurants in Mt. Pleasant and Murrysville fielded little to no results.
Across the country, more than 2,000 restaurants participate in the program with over 700,000 workers, the spokesperson said.
DoorDash, which was the fastest-growing food delivery service in the country last year, isn’t the first third-party delivery app to infiltrate Westmoreland and Allegheny counties — delivering food from independent pizzerias, sandwich shops and other local restaurants to Big Macs, Nachos BellGrande and other fast-food fare.
Uber Eats expanded its program into the Pittsburgh area in 2017, now offering food from over 500 restaurants, said spokesperson Harry Harfield.
Grubhub launched in Pittsburgh in November 2011, connecting diners with restaurants that have their own delivery drivers. The Chicago-based company eventually added its own drivers in July 2015, spokesman Demarquis McIntyre said. More than 500 restaurants use Grubhub in the Pittsburgh area, he said. The company reported 2018 revenue between $966 million and $983 million.
The trend is seen across the nation, and deliveries are expected to grow more than three times the rate of dine-in restaurant sales between 2018 and 2023, according to L.E.K., a global strategy consulting firm based in Boston.
The third-party food delivery market is estimated to stand at $8 billion for restaurant deliveries, with groceries adding another $5 billion, according to Pentallect, a food industry strategy firm in Chicago. The industry is expected to grow $13.5% annually, to be worth $24.5 billion by 2022, Pentallect predicts. Delivery of restaurant meals is expected to account for more than 60% of that total.
Most orders will come from people ages 18-34 who live in major metro areas, according to a breakdown provided by Cowen, a New York-based investment banking company. People between ages 35 and 44 will order a moderate amount of times to the suburbs or mid-size metro areas, while people older than 45 living in small cities are the least likely to order food deliveries.
Dino’s Sports Lounge in Greensburg typically fields between five and 10 calls per day, said owner Dino DeCario, while Penn Brewery, in Pittsburgh’s North Side, reported getting between 10 and 12 calls per day.
“We did not deliver and, quite frankly, it hasn’t changed my business,” DeCario said when asked how delivery apps have impacted Dino’s. “If you have good food, they’ll come and get it. But I do think it’s the way of the future. … It’s more convenience.”
In March, Quick Service Restaurant Magazine reported millennials are expected to account for 70% of home deliveries by 2020, based on convenience and time factors. By 2023, digital delivery sales are expected to grow by 22%, according to L.E.K.
But while DeCario said food delivery apps give additional convenience to the customer, he has encountered problems with drivers picking up food orders on time.
David “Mogie” Magill, owner of Mogie’s Irish Pub and Magill’s Grill in Lower Burrell, agrees.
“What we do is, before we will make the food, we wait for the driver to show up … or else it will sit for an hour sometimes,” Magill said.
He attributed slow pickup times to a shortage of drivers, saying some come from East Pittsburgh — which is 22 miles away.
Stefan said customers are able to see how long it will take food to be delivered before they place an order. From there, drivers are held to that time or they could see a ding in their overall rating, she said.
“You can typically do one to two runs in a half-hour. … It depends on how busy it is and how fast people are putting in orders. Sometimes it’s crazy,” she said.
Turgut Alikaya, owner of Greensburg’s Pizza Siena, advised DoorDash that, “when (DoorDash does) take the order, they have to make themselves familiar with the businesses’ menus … this way nobody gets unhappy. So if they do it the right way, I think everybody would be very, very happy.”
DoorDash and some other delivery services charge higher prices than what is listed on the restaurants’ menus.
Pizza Siena has eight delivery drivers of its own who travel within a five-mile zone. DoorDash, though, has helped expand the reach of the business and is a new way to bring in orders, Alikaya said.
Despite some issues, DoorDash driver Kostewicz said the company has caused growth within restaurants by adding workers who focus on to-go orders, as well as additional work for drivers.
“One thing I have noticed in more regularity is the number of restaurants that have dedicated staff simply to expedite to-go orders, which includes orders made through delivery services,” Kostewicz said. “The need for additional staff would indicate to me that businesses are seeing a financial windfall from delivery services.
“I also receive many orders from those who might not be able to make it out to a restaurant on their own — hospital staff, students, those without vehicles, etc. — that now have an opportunity to try some of the awesome restaurants we have in the Pittsburgh area. I can only hope that it helps the area feel a bit more livable.”
Megan Tomasic is a Tribune-Review staff writer. You can contact Megan at 724-850-1203, [email protected] or via Twitter .