How restaurants are fighting the ‘Uber Eats apocalypse’

Can technology get people to come back to restaurants, in spite of big tech’s deep-pocketed campaign to keep Australians eating lukewarm food in their homes?

John Davidson
Dec 9, 2019
AFR

Can you use technology to reverse the damage done by the tech industry?

That’s the question the Australian hospitality industry is asking itself in the wake of the decimation wrought by the American tech giant Uber and other home delivery platforms bulldozing their way through restaurant after Australian restaurant.

Alasdair France

Alasdair France uses technology to put bums on the seats of his Bondi Trattoria. Peter Braig

Can technology get people to come back to restaurants, in spite of big tech’s deep-pocketed campaign to keep Australians eating lukewarm food in their homes?

For Alasdair France, co-owner of the Sydney eatery Bondi Trattoria, the answer is yes . . . sort of.

His restaurant utilises the Australian dining discount app EatClub, which is like Uber Eats in reverse: rather than delivering “degraded” food from his restaurant to customers’ homes, the way he says Uber Eats does, EatClub delivers discount-hungry customers to his restaurant.

The app lets Bondi Trattoria fill empty tables by offering discounts on a table-by-table, minute-to-minute basis. Mr France says he can set a discount of 30 per cent on a few tables, wait until people have filled those tables, and then quickly take the offer down again.

It’s partly about making more productive use of the staff who are already rostered on. He may not make much money from food sold at a 30 per cent discount – the same way most restaurants make little or no money on Uber Eats, which charges restaurants a commission of roughly 30 per cent on each order, on top of the $5 delivery fee it charges customers – but at least he’s not losing money paying idle staff, he says.

And, besides, not every EatClub customer is a miser who only eats the discounted food, says Mr France.

Any food will degrade during the delivery process.

— Alasdair France, Bondi Trattoria co-owner

“There’s a real combination between customers who are very value-driven, who will just eat a discounted plate of food and then leave, and people who are having a serious dining experience, who are drinking plenty of wine and eating lots of food and indulging.

“That’s not something I’ve seen with other discount systems. People who use those services tend to be just value driven,” he says of services such as First Table and The Entertainment Book.

Partly, too, using EatClub is about appearances. Having customers in the restaurant, even discounted ones, helps draw in other, full-paying customers off the street.

“Bums on seats make the dining room look better. A busy dining room always looks better.”

Bondi Trattoria does offer Uber Eats home delivery, too, but more as a way to try to build awareness of the restaurant in the local community than to sell food.

“I totally would prefer [customers] in house, for sure. It’s more profitable, it’s more manageable, and there is no compromise on the quality of the food going out.

We’re creating a culture of bargain hunters who are looking to save a buck where they can.

— Anonymous Sydney restaurateur

“Any food will degrade during the delivery process. When someone is sitting at a table at your restaurant, worst-case scenario it’s a minute between when the chef finishes it and it ends up on the table.

“When it’s being delivered, the absolute best-case scenario is five minutes, but it’s more likely to be 10 or 15 minutes, or sometimes even longer,” laments Mr France.

And Uber Eats isn’t all that good at building brands for restaurants, either.

“Ultimately, Uber Eats isn’t about driving brand loyalty to my restaurant. It’s all about driving brand loyalty to Uber Eats.”

As for the question of whether technology can undo the damage wrought by big tech companies such as Uber, not everyone agrees that it can.

‘Where is everybody?’

One prominent Sydney restaurateur, who spoke to The Australian Financial Review on condition of anonymity because some of his restaurants still use EatClub, said he hates Uber Eats and EatClub in equal, but opposite, measure.

Uber Eats is destroying the restaurant industry (in the industry, the trend is called the “Uber Apocalypse”), and EatClub is devaluing what’s left of it, he says.

“I tend to think we’re creating a culture of bargain hunters who are looking to save a buck where they can,” the restaurateur says.

“It undervalues what the dining experience is. Our staff suffer because the people who come looking for that 30 per cent aren’t genuinely good tippers.”

“[EatClub] eats away at the bottom line of a lot of small businesses that really can’t afford it, but we’re forced into this discount culture that EatClub is perpetuating.

“I’m a part of that culture because I have to compete, but I don’t subscribe to it and I don’t like it.”

Unfortunately, the restaurateur says the technology alternative offered by Uber is just as bad.

“I hate it. I hate it from a business perspective and personally I hate it. You go to a restaurant or a pub and you sit there and wonder, ‘Where is everybody?’

“They’re all sitting at home ordering from the Uber app.”