Restaurants and Delivery Apps: A Difficult Relationship

With the boom in demand for food delivery, Costa Rican restaurant owners claim that their companies have given up part of the profits to assume the costs of making alliances with delivery applications.

Thursday, July 30, 2020

Since last March, when the first cases of covid-19 were reported in Costa Rica, consumers have been subjected to severe restrictions on mobility, which has led to transformations in the forms of marketing.

One of the most significant changes is that people now use home service more frequently for the consumption of prepared foods, a situation that has forced restaurant chains to make alliances with companies that manage applications dedicated to delivery service.

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These alliances have not represented better conditions for the restaurants, since according to the businessmen of the sector, they have had to give up part of the profits to finance the costs of the service.

Isidro Perera, manager of KFC Costa Rica, told Elfinancierocre.com that "... There is a great desire of the restaurant sector not to have to depend on them and to seek other options that are more economical. There are already local Costa Rican platforms that are offering the service, precisely because of that unfulfilled demand, because global operators tightened the industry.'"

See "Fast Food: Interest in the Region Increases"

Platform rates should level off as competition increases and demand becomes more stable, but for now apps are taking advantage of their moment, explained Roberto Bruno of Soda Tapia.

Some of the delivery companies competing in the Costa Rican market are Uber Eats, Glovo, Rappi, Biko, Nosh and Panza.

Rappi's directors assure that at the beginning of the sanitary crisis they reduced the amount of the commissions, and now they offer support conditions for new allies. In the case of Glovo, they assure that after distributing profits, the company keeps only 2% or 3% of the profits generated by each ticket.

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More on this topic

Delivery Apps: Proposal to Regulate Commissions

August 2020

In Costa Rica, a bill to give the Ministry of Economy, Industry and Commerce the power to determine the maximum commissions and amounts that may be charged by digital platforms such as UberEats, Glovo, Rappi and Hugo was presented.

This bill arose in a context of booming demand for fast food with home delivery, and a complicated relationship between restaurants and delivery applications.

Restaurants: Less Profits in the App Era

November 2019

The growing tendency to order food from home through digital platforms is causing a decrease in business profits, as they must assume the cost of service delivery commissions and sometimes those of additional promotions offered by the applications.

Digital applications such as Uber Eats, Hugo App, Go Pato, Glovo and Rappi, which offer in Costa Rica the service of home delivery of food and other items, have gained much popularity among consumers, so restaurants have had to adapt their internal processes to this new trend.

Collaborative Economy: New Competitor in Costa Rica

October 2019

After investing $2 million, the company Rappi, dedicated to the service of food delivery, orders and cash transport, began operations in the country.

This type of service supply is increasing in the Costa Rican market, as Rappi will have to compete with Uber Esats, Glovo and Hugo.

Sharing Economy Grows in El Salvador

November 2018

Uber Eats food delivery application will be available in the country from November 23rd and will start operating with 150 affiliated restaurants.

Representatives of Uber Eats for Central America informed that in the first phase of operation, the application will cover food deliveries in some areas of the Metropolitan Area of San Salvador.

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