Goodbye Grubhub? These N.J. restaurants built their own delivery service.


imageFor New Jersey’s pandemic-ravaged restaurant industry, it’s been one crisis after another.Mandatory shutdowns and capacity caps, staff shortages and supply-chain breakdowns — not to mention unsympathetic customers — have all crippled already razor-thin profit margins.Now, some restaurant owners say the latest threats to their livelihoods are third-party delivery companies like DoorDash, Grubhub and Uber Eats.The services claim up to 30% commission, creating yet another financial snarl for eateries, especially those that never even considered delivery prior to COVID-19 temporarily shuttering their dining rooms.In effort to reclaim some of those lost profits, a handful of restaurants in Jersey City — perhaps New Jersey’s most concentrated food destination — are teaming up to create a delivery network of their own.“There’s never going to be a true partnership between myself and a large multinational corporation,” said Ghost Truck Kitchen owner Andrew Martino, who is leading the endeavor.“They really don’t have my best interests in mind.

Any chance they get, they’re going to look to take advantage of me.” Martino shepherds a group of eight city restaurants whose own delivery network, called Gold Coast Community Delivery, aims to be more restaurant- and customer-friendly, and set a trend for the rest of the state.

“This money is all going to either the restaurant itself, or a group of restaurants that are local and independent,” Martino said.“The way we want to move forward is just transparency, supporting one another, and hopefully having the community buy in.” The service plans to launch sometime in the fall in partnership with New York-based courier service Relay , which will provide the delivery drivers.

Martino said their model will include fewer fees for customers, lowering prices by 10% to 12%.Similar restaurant-owned services have successfully developed in Iowa City , Knoxville, Tenn.

, Las Vegas and Washington, D.C.— some during the pandemic, some years before.Jersey City businesses that have already signed on for the service include Milk Sugar Love, Wurstbar, Delenio, Luna, Two Boots Pizza, Freetown Road Project and Pasta Dal Cuore.Several other restaurants have expressed interest, Martino said, and he hopes the list will continue to grow.

A similar network is being built in Hoboken with the same model that Martino hopes will launch early next year.“It’s a no brainer, without a doubt,” Billy Niskosh, owner of downtown pizzeria Delenio , said.“It’s going to help small businesses provide a better service and get the food there quicker.” Restaurants in New Jersey, and around the country, have become more dependent on third-party delivery services in recent years, a trend that was only accelerated by the COVID-19 pandemic.A 2020 study from Service Management Group found 43% of the more than 47,000 restaurants poled had used a delivery service in the past three months and 25% said they were using delivery services more frequently.

The four top food delivery apps in the United States (DoorDash, Uber Eats, Grubhub and Postmates) saw revenues rise a collective $3 billion in the second and third quarters of 2020 as the pandemic raged and restaurants scrambled to stay afloat.“There are so many restaurants that were just scared and just didn’t know what to do,” Martino said.“They were partnering with these guys blindly, not realizing that they could potentially be losing money.” Gov.Phil Murphy signed a law in 2020 that capped the amount a delivery service could charge a restaurant at 20% “during certain states of emergency,” but that cap expired when the state of emergency was lifted in June.

“I don’t think people know how much money comes out of our pockets to get them their food,” Niskosh said.The Gold Coast Community Delivery service will offer two types of membership for businesses.Those who pay a $2,000 joining fee for a three-year membership will be charged a 15% commission on deliveries (half of what the third-party platforms typically charge) and be allowed to take part in the group’s profit-sharing.Restaurants can be listed on the service without paying the fee, but will pay a 20% commission on orders and not be part of the profit-sharing.Gold Coast Community Delivery will initially be browser-based, meaning customers won’t have to download an app to use it, but Martino said an app is in the works.The service will accept Apple Pay and Google Pay to speed up checkouts, along with all major credit cards.

The delivery drivers are paid employees of Relay, not contractors, averaging $18-22 an hour including wage and tips.“I really am excited about what (Martino) has put together, I think it’s it’s a fantastic solution for Jersey City,” Aaron Morrill, co-owner of Two Boots Pizza said.

“It’s going to be operating, not at the behest of Silicon Valley venture capitalists, but in the service of restaurants in Jersey City.” Some have asked Martino if he plans to expand the network throughout the state and beyond if it goes well, but he said that would defeat the purpose.“We have everything we need within our own communities,” Martino said.“We truly don’t need a big multinational corporation coming in and taking 30% of all the delivery orders in the city.” Our journalism needs your support.

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Jeremy Schneider may be reached at and followed on Twitter at @J_Schneider and on Instagram at @JeremyIsHungryAgain ..

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