CNN Money: Why Uber Eats and GrubHub Partnerships Are Risky for Brands

In today’s digital-centric world that’s focused on speed and convenience, food delivery is big for business. However, a recent article in CNN Money highlights the reasons that partnerships with third party delivery companies can be risky for restaurants.

One of the biggest risks to restaurants who engage with companies like Uber Eats, DoorDash and GrubHub is shrinking profit margins and shifting customer allegiances. Restaurants are paying 15 to 30 percent in fees to third party apps, making profit margins tighter than before. Restaurants who partner with these apps also risk losing more profitable dine-in sales. It’s also possible for consumers to get a bad impression of a restaurant if their food is late or cold, which may be the fault of the delivery service.

Stephen Dutton, an analyst at Euromonitor International, told CNN Money, “It’s difficult for a restaurant to just flip on the switch. Navigating the best way to get involved in delivery is a big challenge.”