Technology

The diner that isn’t afraid to piss off Seamless, or customers who use it

On a recent Sunday afternoon, chef Samuel Yoo stood behind the counter of the self-described Asian diner he owns on the edge of Manhattan’s Chinatown. Each of the eight swiveling stools inside Golden Diner remained empty, as they had since New York City mandated that restaurants close indoor dining six months earlier. Though now, about a dozen eager eaters are able to sit in a sectioned-off sidewalk area, pass plates of kale-and-parmesan biscuits smothered in gravy, and wash down their brunch with glasses of orange wine.

Outside the front door, a masked waiter attended to a growing number of people Yoo never expected would become the focus of his small business: the handful of hungry New Yorkers, a few European tourists, and a slew of delivery cyclists all waiting on brown paper bag orders to go.

Before the pandemic, Yoo didn’t worry much about building a customer base for pickup and delivery. The young restaurateur had scoured the Manhattan real estate market for the perfect spot to debut Golden Diner as a concept, and encouraged everyone who could eat inside to do so.

But, as good millennials do, he soon got on the apps — “literally all of them,” he says with exhaustion — such as UberEats and its pending acquisition Postmates; Caviar, plus its parent company DoorDash; and Seamless, with its corresponding Grubhub conglomeration. The apps soon accounted for 95 percent of his total takeout orders, which resulted in Yoo paying Seamless, Golden Diner’s most popular platform for acquiring orders at that point, around 30 to 35 percent per order “at its worst,” he said.

The steep fees coupled with the shift to surviving exclusively on orders from takeout would’ve swiftly killed his restaurant, Yoo said, on top of rent and taxes. So when COVID-19 made it clear no one would be dining inside for an ambiguous while, Golden Diner began publicly raging against the corporate machine, calling on its millennial-skewing audience to, as Yoo says, “do the right thing” on behalf of all small businesses everywhere.

In April, the tiny diner for the first time begged its 11,000 Instagram followers to spend money directly with independent restaurants like its own, to avoid triggering fees by way of tracked clicks and sneaky Seamless-affiliated phone and website listings.

On other platforms, largely Yelp, Golden Diner subtly pushed its anti-corporate agenda by uploading text-overlay graphics to ask for customer support on these initiatives. Offline, the team kindly urged customers away from ordering through apps like Seamless by attaching printed reminders to each third-party order. “Thank you so much for your order, we appreciate you! If you could please order through us next time, we’d appreciate you even more,” says the typed note, adding a winky face at the end.

TL;DR: Yoo all but screamed into the void that an ounce of effort from customers could help Golden Diner survive. In response, fans quickly rallied behind #TeamGolden — rivaling the early and overwhelming applause from top food critics — and acknowledged they appreciate the restaurant for more than its savory Chinatown egg-and-cheese “sando.”

When Yoo opened the restaurant in spring 2019, he consciously chose to absorb the combined third-party marketing and delivery costs that came with takeout apps. The tradeoff let him avoid the tedious task of internally managing delivery operations (securing enough hours to onboard reliable delivery drivers, receiving orders through their website, figuring out an appropriate radius for their delivery zone), and instead use the creative part of his brain to evolve Golden Diner.

But as the virus spread across the country, the fees became unsustainable. Prior to cities like New York imposing an emergency 20 percent cap on third-party platform fees during COVID, Grubhub had been known to reportedly siphon off more than 40 percent per order.

A major step to reduce the pricey app fees was to retrofit Golden Diner’s website to process online orders through the flat-fee point of sale system, Toast. The logistics of an in-house delivery team did prove to be tricky (see: launching with a fleet of Citi bikes), but once Yoo cracked the code, Golden Diner was able to incentivize its customers with off-the-menu specials and free delivery (compared to the $1 fee the restaurant then placed on third-party apps).

This eliminated the 15 percent Seamless delivery fee entirely, reducing the payout for Seamless to just a 5 percent “marketing” fee, which Golden Diner calculated made sense for them to maintain exposure on Seamless. (The pay-to-play marketing model at Seamless allows restaurants to select from a sliding-scale per-order percentage, typically ranging from 5 to 25 percent or more, to boost their profiles within the app and recommend them along with relevant businesses through email campaigns, a Grubhub spokesperson said in a phone call.)

By the numbers, these community-supported efforts are working. The diner has seen a drop in orders placed through third-party platforms, from the initial 95 percent of its total takeout orders to as low as 40 percent of its delivery and pickup tabs on average. (Folding in outdoor dining, this grants Golden Diner direct access to upward of 80 percent of its customer base on a sunny day.)

Yoo doesn’t accept the premise that the quality of his cooking holds a significant amount of power when asking his customers to break their habit of ordering food to their front door with the flick of a wrist. But, looking out at the Sunday crowd, it seems Yoo might be right: that his customers thumb through Instagram, see the posts from Golden Diner, and “know what’s up.”

The third-party platforms can keep “acting like dirtbags” all they want, Yoo says. He’ll keep collecting his money, using Seamless for exposure, and challenging people to consider who really profits from delivery fees and service charges.

After all, it’s ultimately up to the customer to decide how they want to split the bill.