New York (CNN Business)If you visit Motorino Pizza’s website, you’ll be greeted with a plea: Don’t order through Seamless. “The worst thing that has ever happened to us is them,” said Mathieu Palombino, owner of the small New York City-based pizza chain.
Palombino used to do just fine with his own delivery fleet, he said. But now, he feels that opting out of Seamless is not an option. If you’re not on Seamless, “you no longer exist online. You’re not there.” Because so many people order through the app, turning it off would mean losing about 80% of his business overnight, he said.
Restaurant operators complain that third-party delivery providers like Seamless, DoorDash and Uber Eats are prohibitively expensive. These platforms offer a way for customers to order from local restaurants, process restaurant payments and provide contract drivers to pick meals up from restaurants and deliver them to customers. For these services, they often charge restaurants around 30% per order. But profit margins in the restaurant industry are often razor-thin, so these fees can wipe out the restaurant’s profits or put them in the red. And if they choose to outsource delivery to these platforms, restaurants also hand off valuable customer data and control over how delivery orders show up at their customers doors.