New cooperative food delivery service hopes to keep local restaurants in business
ST PETERSBURG, Fla – There’s a new delivery service in Tampa Bay in hopes of saving lives for restaurants. It’s called LoCo, a local restaurant cooperative, delivering food without all the expense of big business.
“We estimate that these big monopolies GrubHub, DoorDash, and Uber Eats take almost $ 2 million per month out of the Tampa Bay community, âsaid Mike Magee, owner and director of LoCo Tampa Bay.
The original concept for LoCo began in Iowa four years ago. Today it is present in five cities across the country, most recently in St. Petersburg.
“We found a number of restaurants, independent restaurants thatâ¦ felt the pressure and the pain, âMagee explained.
So far, 16 restaurants have invested capital in the cooperative. Pete Boland, owner of Galley St. Pete Tavern and Mary Margaret’s Old Irish Tavern is one of them.
âI think the consumer and a lot of people in general don’t understand that companies like Uber Eats are taking 30% straight out of restaurant pockets,â Boland said.
While delivery services have become a lifeline for restaurants during the pandemic, the rising cost of food and supplies is making homeowners question every penny.
âAll of a sudden it was everything from avocado and tomato to ketchup,â said Josh Cameron, owner of Oyster Bar and Crafty Squirrel who also bought LoCo. âWhen you know, the third-party delivery service makes more money than the guy who actually makes the burger or more money than the company that brings the food, it’s just a no-brainer that you know it doesn’t. is not sustainable.
The reality is that Tampa Bay has definitely lost hundreds of restaurants during the pandemic. According to the National Restaurant Association, restaurant and foodservice industry sales fell $ 240 billion in 2020.
“Most of the restaurants in our chamber make about a 5-6% profit each year, âsaid Christopher Steinocher, President of the St. Pete Area Chamber of Commerce. âSo if you take 30% of that and every meal, I don’t know how these restaurants make money. So did he contribute? Absoutely. Did that help them stay alive too? Certainly.”
LoCo’s model charges restaurants a 17% commission (2% for customer rewards) or about $ 5 for every $ 30 order. Since this is a cooperative of local restaurants, the majority of these costs go directly to the community.
âIn our hotel community. We have certainly been attacked in recent years from many different angles and this is a great way for us to stay united and take care of our guests, âsaid Boland.
ABC Action News has contacted Uber Eats, DoorDash and Grubhub with LoCo’s concerns for restaurants and drivers.
They all said the delivery service is expensive, and their fees cover things like technology and driver background checks.
A spokesperson for Uber Eats said in an email statement: âIn response to feedback from Uber Eats partner restaurants, we’ve started testing new ways to offer even more choice and control over the fees they pay and the services they use when working with us. “
All three companies now offer pricing plan options, new to Uber and DoorDash.
For example, Uber Eats now offers Premium, Plus, and Lite. Lite takes 15%, but your business only shows up on the app if a customer is looking for you. Premium takes 30% and you appear higher when the app is open.
A DoorDash spokesperson also said in a statement, “The odds of staying open during the pandemic are eight times more likely for restaurants on DoorDash.”
Adding: “We know that many of our partners have had to make changes and adapt during this time, and will continue to work alongside them to support them.”
Restaurateurs like Patty and Chris Conley disagree with this statement.
Conley’s own Portofino Italian Ristorante near the Sunshine Skyway Bridge in St. Pete. They told ABC Action News that they had had bad experiences with these apps.
âOne issue that comes to mind is when we had to deliver the food ourselves,â said Patty, explaining that the driver never picked up the food, so the delivery company reimbursed the customer, but the food was already prepared.
“What else were they supposed to eat?” She asked, pointing out that a large part of the clientele in their region is elderly and did not leave their homes during the pandemic.
They said it was good to call LoCo and have someone from the area answer the phone to answer any questions.
The Conleys also pointed out that their delivery containers are expensive.
âIt’s a lot of seafood and gravy,â Patty said.
Boland also said he is budgeting extra for environmentally friendly containers.
One thing that many customers have not thought about is that the cost of packaging like these containers is now doubled or more due to the supply chain stretching back from ports off California to the shortage of truck drivers across the country.
â100 boxes cost $ 45 per case, okay, that’s a reasonable cost. We are responsible for the environment and give customers what they want, âexplained Boland. “That same case of takeout boxes increased by $ 101.”
They say those costs weren’t factored into the percentage delivery companies take out from restaurants.
A glance at a Bloomberg analysis of monthly meal delivery sales for these companies shows that they have done very well during the pandemic, with Uber Eats doing their best.
âUsing LoCo Tampa Bay means the money that goes for delivery stays in Tampa Bay, it doesn’t go to big business,â said Stan Arthur, a St Pete advocate on Facebook who created the ‘ I love St Pete ‘grouper. He encourages local restaurants to consider using LoCo exclusively.
As for the drivers, the salary earned on these apps is based on an algorithm of the base salary of the time, distance and desirability of the order and promotions such as rush hour. The Drives keep 100% of the tips in addition to this base salary.
According to Gridwise, in 2020, Tampa Bay drivers were earning a median base wage of $ 12.72 per hour.
Nick Windhotz, a resident of St. Pete, has driven for Door Dash and Grubhub for three years.
âI like going to work as much as I want or as little as I need,â he told ABC Action News. âAnd I love to see the smiles on the faces of the customers, especially the customers who can’t drive, a disabled woman in the mobile home park who can’t get out of her house. It relies on delivery drivers.
However, he adds that sometimes the salary does not cover the gasoline to get there.
“I only get $ 2.50 and hope the customer tips DoorDash, so we rely on the tips, âWindhotz explained.
Magee said LoCo only takes $ 2 off each delivery charge, and drivers can earn around $ 10 per ride. It could be $ 25-30 an hour.
Customers also save a few dollars.
âI did a cost comparison on Tony’s (Pizza) actually and yes DoorDash and Uber Eats were being charged $ 3-4 more just for the exact same pizza compared to LoCo,â said Linsey Grove, resident of LoCo. St. Pete, who has been using Loco for a few months now.
“We have always really supported cooperatives, âshe said. âObviously the pandemic has been very difficult in our community and we want to make sure you know that we are not only supporting restaurants in the area, but we are supporting drivers. “
Currently, LoCo has approximately 50 restaurants on board, delivering within a seven mile radius of downtown St. Pete. They hope more businesses and drivers will soon expand throughout Tampa Bay.
Click here to learn more about registering as a business or driver.
You can read the full statements of these delivery apps below.
âGrubhub supports restaurants so they can be more successful, and we will continue to work hard to earn restaurant sales and help them during the recovery and beyond. We offer flexible pricing to our partner restaurants and commission-free tools like Grubhub Direct that allow restaurants to market directly to customers and receive their data. We don’t have a business unless restaurants have one, and we will continue to work hard to help restaurants manage costs and grow.
Uber Eats spokesperson:
âIn late 2020, in response to feedback from Uber Eats partner restaurants, we started testing new ways to offer even more choice and control over the fees they pay and the services they use when they work with us. Designed with input from thousands of restaurants across the United States, we are excited to make these new pricing options available nationwide. “
âOur goal is to help restaurants succeed. Even before the pandemic, we focused on creating services and products to help restaurants connect, reach new customers, and increase sales. When the pandemic began, we knew we had a responsibility to help restaurants during this time and worked quickly to provide relief, support, and products to help them overcome the challenges of the pandemic. As a result, the odds of staying open during the pandemic are 8 times more likely for restaurants on DoorDash. More recently, we’ve made changes to our commission structure to give restaurants more choice and flexibility – and options at lower cost – when working with DoorDash. We know that many of our partners have had to make changes and adapt during this time, and will continue to work alongside them to support them. “