Subscribe to The Brown Daily Herald Newsletter

Sign up for The Brown Daily Herald’s daily newsletter to stay up to date with what is happening at Brown and on College Hill no matter where you are right now!

Subscribe

Metro, News

Faced with pandemic hurdles, restaurants on Thayer Street lean on apps

Grubhub, Snackpass bring boon to restaurant business, but come with challenges

By
Senior Staff Writer
Sunday, September 27, 2020

Restaurants on Thayer Street have increased reliance on apps as a means of adapting to public health restrictions imposed by the pandemic.

Before the pandemic, customers in East Side Pockets watched their orders being prepared from behind a glass wall. Still, the glass could not contain the crackle of frying oil and the wafting smell of grilled meat — mouthwatering hints for hungry customers.

Now, instead of waiting behind glass, more and more customers are waiting behind their phones.

As Thayer Street restaurants have weathered changes from the coronavirus pandemic, they have grown more reliant on apps for their business. The street that is known for its foot traffic is becoming a hub for the likes of Grubhub and Snackpass.

Paul Boutros, owner and manager of East Side Pockets, a well-known Mediterranean fixture on Thayer Street, said that about 60 percent of East Side Pockets’ current business is online — both through delivery apps and online orders to pick up. Boutros has partnerships with Grubhub and Postmates, which together make up nearly 40 percent of his business. Before the pandemic, Boutros said the restaurant relied on Thayer Street’s steady stream of foot traffic for customers.

Aside from local joints, the apps also play a role in the business of national chains represented on Thayer. Michelle Tucci, manager of Shake Shack on Thayer Street, says that of the restaurant’s total orders, the proportion received through online apps has tripled since March. Even as indoor dining has begun to open up in Rhode Island, delivery has continued to dominate — it still accounts for over half of the restaurant’s orders, Tucci said.

Dining on Thayer Street grew more reliant on takeout and delivery options out of necessity. Rhode Island closed indoor dining from March to June, and even now restaurants can only open their doors to a fraction of their usual customers. During the peak of the pandemic, foot traffic on the street was sparse, Boutros said.

Before the outbreak hit College Hill, East Side Pockets partnered with only Postmates for delivery services. Boutros said that representatives from other delivery apps would frequently try to woo him to join their services, but the answer was always no — his staff could not handle the additional volume of orders.

In April, Boutros relented following a precipitous drop in business and partnered with Grubhub. He said that he needed more orders, and Grubhub did not disappoint. From the outset, the platform brought in 60 to 70 orders per day, a significant boost to East Side Pockets’ business.

But the boon for business comes at a high price. Grubhub charges a high commission for their deliveries — at times over 30 percent.

“If you want to make money, you have to spend money,” Boutros said. Still, the steep commission, combined with rising costs of ingredients — some products nearly doubled in price due to shortages related to the pandemic — have forced Boutros to raise prices at East Side Pockets. 

Shake Shack also now leans heavily on Grubhub, Tucci said. Grubhub brings in the most orders of any delivery service for the restaurant, so she thinks that the high cost is worth the extra business. Without deliveries, Tucci said, the restaurant would not have survived the past few months.

“It’s always tough to lose money to something,” Tucci said. “However, you’ve got to look at the bigger picture of it and how much (Grubhub) brought in.” Tucci added that the platform is generous with free delivery promotions on the app, which brings in more business for the restaurant. Shake Shack is included in promotions twice per month on average, she said.

But not all restaurants see the same benefits. Boutros said that although East Side Pockets was included in a promotion immediately after it joined the app, it has not been part of any since.

Katie Norris, a spokesperson for Grubhub, wrote in an email to The Herald that Grubhub gives restaurants opportunities to “choose their own promotions and decide how long to run these promotions.” The company also offers promotions funded by Grubhub to increase orders for restaurants.

For Boutros, partnering with the app brings other challenges. He said that orders are frequently reported as mistakes, causing the restaurant to lose the revenue from those orders per Grubhub’s policy. Boutros disputes that the orders are made incorrectly — for one reported mistake, he watched on the restaurant’s security camera to double check that the cook had made no errors.

Restaurants can appeal for refunds on mistaken orders with Grubhub, but Boutros said that appeals are time-consuming, and it often does not make up all of his losses.

“We always want restaurants to have the best experience possible,” Norris wrote. “We review every refund request from restaurants to determine the best course of action, which is often a refund to the restaurant to cover the cost of the meal.”

Grubhub is hoping to capitalize on students returning to campus with new promotions. Their back-to-school promotion offers deals for restaurant chains — including Shake Shack.

University students who have recently returned to College Hill may bring a boost to delivery apps. 

Perry Allen ’23, an on campus student, ordered food through delivery apps multiple times during the quiet period. Because students are not allowed to travel to restaurants in person during the period, Allen and his friends’ only options were delivery apps or to-go meals from dining halls.

“We were just tired of the maybe six dinner options that (the dining halls) had,” Allen said. In lieu of bagged meals, Allen and his friends opted for the convenient Thayer Street staples that they had missed during the six months away from campus. 

While Grubhub has looked to appeal to students, many University students frequent a different app: Snackpass. More than 80 percent of University students are registered users on the app, according to founder and CEO Kevin Tan. In terms of transactions per week, Tan said that Snackpass is the most commonly used e-commerce app among college students in places where the app is available — surpassing apps like Uber, Amazon and Airbnb. 

Snackpass allows users to order food for pick-up ahead of time and forgo long lines. The app also has a social component that gives users the opportunity to share points with friends, which can be turned in for rewards like free coffees or meals.

Snackpass is based in college campuses and has cultivated a user base of students. The app, which came to Brown in 2018, has now spread to 16 campuses around the country.

Because restaurants were struggling, Snackpass offered the use of their app for free for four months during the pandemic, Tan said. 

Tan believes that besides its lower price, Snackpass is attractive to restaurants because they gain access to a pool of college student users. He thinks that the service also has a competitive advantage over delivery app alternatives because of the social component.

Restaurants “mainly care about succeeding,” Tan said. “So being able to bring them incremental orders is the number one thing we care about.”

Kerri Johnson ’22 prefers Snackpass to delivery apps because there is no markup. Plus, she said, ordering through Snackpass is convenient because she lives so close to Thayer Street.

Johnson, who is living in an off-campus apartment, also sees the advantages of Snackpass during the pandemic. “I don’t want to really be standing in a store waiting to place my order,” she said. With Snackpass, there is often no risky face-to-face interaction in restaurants.

Tan said he believes the switch to online platforms by restaurants will continue into the future. He hopes that Snackpass can lead the way by making transactions more social, especially at a time when physical distancing is necessary. 

“Even before the pandemic,” Tan said, “there was an unlimited demand for social connection between humans.”

To stay up-to-date, subscribe to our daily newsletter.

Your email address will not be published. Required fields are marked *

*