The Inequality of the Food Delivery Industry and the Quest for Fair Solutions
The digital revolution has transformed the way we consume food. With a few taps on a smartphone, a variety of meals from diverse restaurants can be at our doorsteps within minutes. But beneath this glossy façade lies a system rife with inequalities for the backbone of this industry: the restaurants.
The rise of food delivery apps such as Uber Eats, DoorDash, and Takeaway.com offers undeniable convenience. But these delivery platforms charge hefty commission fees from restaurants, often ranging between 15–45% of the order total. For many small and local businesses operating on razor-thin profit margins, this sizable chunk can significantly diminish their financial sustainability. As customers, the illusion of supporting local businesses by ordering from them is somewhat tarnished when a considerable portion of the payment is funnelled to the ordering app and not the restaurant.
The inequity of this system becomes even more glaring when considering the differential treatment between local establishments and big restaurant chains. Larger chains, due to their volume of sales, are often able to negotiate lower commission rates with these platforms, thereby securing an unfair competitive edge over local businesses.
In addition, these platforms commonly place the onus of discounts and promotions on the restaurants themselves. While such incentives might increase order volume, the cost is borne by the restaurants, further exacerbating their economic stress.
These platforms have created a somewhat uneven power dynamic. Small businesses often find themselves compelled to participate in these platforms out of fear of losing out on customers. Despite the financial strain, they trade survival for visibility. Restaurants, then, have to grapple with the reality of reduced opportunities to foster meaningful and direct customer relationships.
Another issue pertains to the handling of customer complaints related to delivery errors or delays. Such problems, often beyond a restaurant’s control, can negatively impact its rating on the platform. This can result in an unjust decline in orders when the fault lies with the delivery service or the app itself, not the restaurant.
The onset of the COVID-19 pandemic and consequent lockdowns exacerbated these issues, forcing local restaurants to rely even more heavily on these platforms. The balance of power has tipped significantly in favor of the delivery apps, further cementing the systemic inequality.
A new direction
Despite the grim state of affairs, innovative solutions are emerging to challenge the status quo and offer a fairer alternative to traditional food delivery platforms. Bistroo, a direct-to-consumer, peer-to-peer marketplace that harnesses the power of blockchain technology.
Blockchain, with its inherent qualities of transparency, security, and decentralization, can help democratize the food delivery industry. Bistroo utilizes this technology to significantly lower fees through decentralization and a flat operating structure, a stark departure from the high commissions charged by traditional platforms.
Bistroo gives full ownership to restaurants and consumers through direct peer-to-peer transactions. This model not only ensures fair compensation for restaurants but also fosters direct relationships between restaurants and their customers, reinvigorating the restaurant’s brand identity that often gets diluted on conventional delivery platforms.
Bistroo’s approach represents a promising shift towards a more equitable food delivery ecosystem, demonstrating how technology can be harnessed to disrupt entrenched systems and drive change.
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Bistroo is a peer-to-peer marketplace for food & beverages, powered by the BIST Token. Bistroo is a pioneer in the blockchain-based food industry, building protocols that empower the merchants in an ecosystem that also benefits the customers.