MANCHESTER, NH — Reaction from fellow restaurateurs over news of a lawsuit filed last week in U.S. District Court by the owner of several New Hampshire eateries expands the question of where lines should be drawn when technology meets gastronomy.
On Feb. 24 two suits were filed — against DoorDash and GrubHub food delivery services — on behalf of Great NH Restaurants, owned by Tom Boucher. His holdings include Copper Door, T-Bones and Cactus Jack’s.
In the suits, Boucher’s attorneys claim that due to certain business practices of both companies, Great NH Restaurants has suffered “willful trademark infringement, unfair competition, injury to business reputation, and false and deceptive business practices, all in violation of the laws of the United States and the state of New Hampshire.” (See filings below).
Boucher, represented by law firm Rath, Young, and Pignatelli, is not the first restaurant owner to take legal action due to the way these companies do business, according to Tom Puskarich, owner/operator of Restoration Cafe on Hanover Street. Just Google In-N-Out Burger, he says, referring to that West Coast eatery’s 2015 court battle with DoorDash over copyright infringement. That case was dismissed a few months later.
“He’s not going to win it. I don’t know why he’d do something splashy like this other than to shine a light on DoorDash and how they do business. In the end, they’ll just take him off the platform. I suppose he’s trying to protect his reputation at this point. DoorDash isn’t just hurting the little places like us. The big ones, like Starbucks, Taco Bell, even In-N-Out Burger, they couldn’t do anything about these guys.”
Online Delivery a Game-Changer
Tech-based food delivery services have certainly become a game-changer. For many food consumers, it’s a dream come true and a convenient alternative to going out to eat; in essence, instead of taking an Uber to a restaurant, the food takes an Uber from the restaurant to you.
On the other side, delivery services claim they are just there “to help” restaurants that don’t have in-house delivery service to capture new revenue streams. A recent study by USFoods.com says the average person surveyed had two food delivery apps on their phone and used them at least three times a month. Online food delivery is a multi-billion dollar industry projected to go nowhere but up.
While customers must be happy or they wouldn’t be spending more than the going rate for a burger-fix delivered, most complaints about food deliveries involved the food not being warm enough, and deliverers complain about weak tips and having to wait for the restaurants to have the food ready.
If there is a forgotten middle man it is restaurant owners who for the most part are the voiceless and sometimes even unwilling pawns in this surging tech enterprise.
Puskarich points out that his menu is not necessarily designed for foods that travel well. So what happens to the quality of the food in transit is out of their hands, and when the customer gets something sub-par, negative reviews follow — which are like poison to a restaurant’s lifeblood.
Manchester Ink Link reached out to a DoorDash spokesman about the New Hampshire lawsuit, and was provided the following comment:
“DoorDash was founded as a platform to help grow local businesses by accessing the online convenience economy, and restaurants tell us that being on DoorDash brings them new customers and incremental revenue. While the majority of the merchants on our platform have partnerships with us, we will occasionally offer to act as a courier service for customers to restaurants in their neighborhood. This listing is at no cost to the restaurant. For many restaurants, being listed on our app is considered a helpful trial test towards a formal partnership that provides additional benefits and services. There are occasions when merchants ask to be removed from our platform and we honor those requests. In this particular situation, we have confirmed these merchants are not listed on our platform.”
Boucher’s suit claims otherwise.
According to filings, Boucher alleges “as a result of DoorDash’s use of the certain GNHR (Great NH Restaurant) (trademarks), the TBONES® and CJ’ S® marks most recently, GNHR has received a number of customer complaints regarding Doordash’s services under the mistaken belief the GNHR is responsible for the poor service provided by Doordash.” Similar claims are made in the suit against GrubHub. The suits also claim that, despite repeated requests to remove them, Boucher’s restaurants remained on the delivery companies’ websites and apps.
Food Fight
Boucher’s lawsuit signals a virtual food fight going on between restaurant owners around the country and these delivery services, Puskarich says.
“This is about DoorDash’s business model, they’ve been sued over and over and over again,” Puskarich says, and not just by restaurant owners.
Case in point: A 2020 class-action lawsuit filed on behalf of “Dashers” to recoup mileage, tips and a guaranteed wage.
Puskarich is not opposed in principle to online food delivery services, a modern convenience that last year catered to 38 million people in the U.S. according to eMarket.com.
It is the particular practice of DoorDash that Puskarich takes issue with.
“I have UberEats. It’s an opt-in system, so I’ve opted-in. We have tablets and there are ordering protocols. We know when orders come in and we have direct access to customers, and we know who the drivers are,” Puskarich says. “I welcome it. I’m very happy with UberEats and the incremental sales I get from UberEats. They’ve been a great partner to work with.”
Door Dash, not so much. After fielding hundreds of Door Dash orders, all of them with issues, he pulled the plug.
“DoorDash is a tech company and a disruptor in this space. It’s being funded by a billion dollars in venture capital in the last 15 months and their model is to grow at any cost and to gain market share,” he says. He doesn’t like their tactics, and after a frustrating back-and-forth with DoorDash they finally took Restoration Cafe off their website, just a few weeks ago.
If Food Delivery’s Wrong, Customers Don’t Want to Be Right
While the end-user experience may not be overtly bad — you get hungry, you tap the app, you order up whatever you’re craving, you pay with a credit card and, in some reasonable time frame there’s someone at your door with anything from a McFlurry to a T-bone steak.
But hungry customers probably don’t consider how their McFlurry gets from point A to point B, the financial hits restaurants take, or the lack of control they have over when or in what condition their product arrives.
“For the customer, it goes like this: You place your order and pay for it, then your order goes to a call center in southeast Asia. Someone picks that order up and calls the restaurant, then a driver in your area gets assigned to that call. That person comes to the restaurant and they have a red card which essentially means DoorDash Venmos money to that driver, who pays for the meal and then goes on his way,” says Puskarich.
That’s not the part that bothers him.
It’s that, unlike his voluntary partnership with UberEats, DoorDash and, to some extent, GrubHub, allow hungry customers to select any restaurant from the list, even those who aren’t “partnering” with them, which creates the illusion that they are all in.
“In our case, they took an incorrect menu that was two-years-old with incorrect pricing, and items showing on the menu we no longer carried, plus it was full of typos. They just scraped it, and it ends up making me look like an idiot,” Puskarich says. “I refused to play their game. They would call and we would not take their call. DoorDash finally took me off their site.”
That kind of business practice ultimately makes customers mad. They would receive items they didn’t order that took too long to fill “or any other number of things we had no control over,” Puskarich says. And in the end, the negative feedback for the restaurants can be disastrous.
Especially a newer business says Becky Ormonde, co-owner of North End Bistro on Elm Street. She’s had experiences with a few online delivery services since opening in 2018, and in the end, has opted out of any delivery options for their eatery.
“Last year when we were closed for renovations a DoorDash driver showed up to pick-up an order for items that hadn’t been on our menu since the first month we opened,” says Ormonde. “The thing is we didn’t have an account with them so we didn’t have customer information. All I could do was complain on the DoorDash site and explain why we were upset about it.”
She said it might have been beneficial if DoorDash had tracked how many requests for food orders from Northend Bistro had come in. Perhaps they could have negotiated a partnership. But there are other caveats.
“They’re supposed to show up with thermal bags to keep food warm, but when we tried using UberEats that didn’t happen. In that case, you don’t know what the quality of the food is going to be when it arrives to the customer,” Ormonde says.
What if the driver stops for gas, gets stuck in rush-hour traffic or has other deliveries? That, plus the 30 percent hit to restaurants for the service means your risking your profit margin and your reputation. Especially when things go wrong. And because customers must tip upfront, they can’t take out a screwed-up order on the person holding the bag, so the restaurant often becomes the fall guy.
“We did use UberEats for a while when it first came to Manchester but at the time they were having problems with drivers so they weren’t showing up and we were getting bad reviews. I had a driver show up 40 minutes late with a delivery. We ended up making new food for that customer, but we still got a bad review and when I reached out to UberEats, they said unless the customer contacted them they couldn’t refund the customer, so I had to do it. We lost the cost, twice, plus we lost a potential customer,” Ormonde says.
She’s heard from fellow restaurant owners who also used the services, and some have had positive experiences. But after trying the big three — UberEats, DoorDash and GrubHub, North End Bistro will take a hard pass on such services, at least for now.
“I know the service is convenient. In fact, I just used DoorDash recently when the kids were sick. We ordered from a local restaurant. The driver was late so there was a 40-minute delay on the food. Everything was cold, there was no thermal bag. It wasn’t good. Another time we got cheeseburger sliders for the kids from another place. It wasn’t bad,” Ormonde says. “I mean, it’s a nice convenience, but it’s not the same as going to a restaurant, and especially for us, because we’re in the business. Our kitchen doesn’t have a heat lamp, or a microwave. We serve everything fresh and to order, and it goes out as soon as it’s ready.”
In many ways it’s still the Wild West in this tech-delivery space, as all the major food delivery apps are struggling for profitability and, in turn, some are playing dirty, asserts Puskarich.
“DoorDash is attempting to steal business away from us. They’ve made deals with Google so that Doordash has a permanent uneditable link to our menus when you Google my place. They’re paying Google to do that. They’re stealing customers away from me and forcing customers into their ecosystem,” he says.
Sure enough, a quick Google of Restoration Cafe on a Saturday afternoon delivered this result:
If nothing else, the Great NH Restaurants lawsuit will be a conversation-starter, says Puskarich.
“I feel they’re absolutely trying to hold us ransom and force us into giving them money for the exposure, and not giving us control over our own products. And if they get a big foothold here, at some point they’ll have to be profitable and take people off their platform who don’t pay. And once that happens, every time you order, 30 percent of your money is leaving our area and going to Silicon Valley,” Puskarich says.
It’s his hope that educating the public about how different online delivery services interact with their favorite restaurants will help them make an informed decision when using delivery apps.
In the end, there’s an even bigger question yet to be answered.
“What’s going to happen with food delivery service in the city? That’s the big question. I think about this often at Restoration. I have a dining room, and I’ve set myself up as a third-space place, where you want people to come and hang out. I am offering takeout as a convenience, and I do get some incremental sales from UberEats, but at what cost?” he asks.
Even more food for thought is around what Puskarich says is the next trend, coming soon to Manchester.
“Ghost kitchens and virtual restaurants —they are restaurants that exist only for delivery apps and are set up in nonretail spaces, so an owner might run several concepts out of the same kitchens under different names,” says Puskarich. “They’re not here yet, but there’s one coming.”
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