For restaurants — and delivery services — new recognition that they need each other

DoorDash’s $500K grant program shows changing nature of its relationship with restaurant industry

The potential relationship between restaurants and delivery services seemed tenuous from the start — and certainly strained after the Legislature, following the lead of other cities and states, passed a law at the beginning of the state shutdown limiting the amount of fees services such as DoorDash, GrubHub, UberEats and others could collect.

Mom-and-pop food establishments were struggling during the COVID-19 pandemic — and what little profit they could earn from takeout was being gobbled up these services, the feeling went.

Monday’s announcement that DoorDash is providing $500,000 for grants to small businesses — grants that could be as much as $5,000 — shows how far the relationship has come. And how the two services recognize they may be more closely intertwined moving forward. (See how to apply here.)

Marilou Halvorsen, the now-outgoing head of the New Jersey Restaurant & Hospitality Association, feels that way.

“There’s a greater understanding of how they may need each other,” she said.

And they will long after the pandemic is over — whenever that is, and however that is defined.

“I think takeout and delivery and outdoor dining is going to be around for a long time,” Halvorsen said. “I think some people are just going to be uncomfortable eating indoors. The recovery of the sector is very much tied to consumer confidence. And, the more options restaurants have, the better off they’ll be.

“So, for somebody who doesn’t want to deal with the staffing of delivery drivers and insurance issues, this is a good way of doing it.”

Halvorsen said the grant program was unexpected, but not a complete surprise. DoorDash, she said, has been more involved in the industry than others have been.

“From beginning, DoorDash has really tried to do a little bit different than their competitors in trying to be collaborative, rather than trying to be an adversary,” she said. “They had this grant program and asked if we could help execute it — which, of course, we’re happy to do,” she said.

Halvorsen said DoorDash, which joined the association last year, has made an effort to be part of the solution going forward, Halvorsen said.

“DoorDash has been the one to step up, really trying to be good partners with state associations and the restaurant industry,” she said. “They acknowledge that they need restaurants to be prosperous. And this is their way of giving back, which we appreciate. All these delivery companies made a lot of money from the restaurants. So, it’s nice that they’re giving back.”

DoorDash’s David London, director of government relations, U.S. East, said the company was eager to do what it could to help the industry — and do so at great expense.

The program is part of DoorDash’s five-year, $200 million Main Street Strong Pledge, which includes a $10 million grant program to help restaurants in cities and states around the country and Canada. Similar programs have been established in Connecticut, Texas and Colorado — with more announcements expected soon.

“DoorDash has always supported restaurants, and we’re proud of the value many in New Jersey have said they’ve found through our platform,” London said. “New Jersey restaurants are core to communities across the state, and we’re hopeful that this program with NJRHA will help these small businesses rebound from the pandemic and thrive on the other side.”

How the relationship moves going forward remains to be seen, but there’s reason to believe restaurants and delivery services can find a happy medium going forward — in a way that those who paid for taxi medallions will never be able to forge a relationship with the Ubers and Lyfts of the world.

As always, it will be a matter of money. How much will it cost restaurants to have what likely will be an essential part of their business model going forward — but one they are not in position to provide themselves? After all, indoor dining restrictions may never go away completely. And more, consumer confidence does not figure to ever return to the level it once was.

The state regulation — which limited delivery services to fees that cannot exceed 10% of the price of the original order if the restaurant is using its own driver for the delivery or 20% of the original price otherwise — has expired.

State Sen. Vin Gopal (D-Ocean Twp.), who sponsored the legislation, said he feels the law had an impact last summer — and will continue to do so moving forward.

“When my bill was signed last summer that capped the fees from third-party vendors, it showed a very positive change in the relationship between restaurants and the food delivery services — and I’m happy to see now both parties have been able to come together to work things out,” he said. “I am also thrilled to see the partnership that was recently announced between the New Jersey Restaurant & Hospitality Association and DoorDash.

“I appreciate the camaraderie between these organizations as we all continue to work together through this pandemic to help the Garden State.”

Gopal said he will continue to monitor the situation.

“Small business restaurants are the backbone of this state,” he said. “Anything the government can do to help them through the difficult times they’re facing through no fault of their own is a very high priority of mine.”