The Digital Restaurant Association (DRA) just wants everyone to get along.
The recently launched nonprofit is aiming to help restaurants thrive in the digital era, primarily by easing relations between operators and the third-party delivery companies that account for much of the industry’s online business.
The group is a product of Tusk Strategies, a well-known public affairs firm that has worked to shape policy and public opinion on behalf of big tech companies like Uber, FanDuel and Bird scooters.
Its latest campaign will advocate for brick-and-mortar restaurants, said DRA Director Joe Reinstein, a former Obama administration official who was tapped to lead the group by Tusk founder Bradley Tusk.
Tusk, a venture capitalist and political strategist, is “very well connected with a group of folks who were very concerned about the industry and what was happening,” Reinstein said in an interview this week.
Those folks, he said, were restaurant operators, and their concerns were the high fees, strict data-sharing policies and other practices enforced by the big three delivery providers: DoorDash, Uber Eats and Grubhub. While delivery has become a virtual must-have for modern restaurants, many operators feel the apps have too much power. “It’s not a level playing field,” Reinstein said.
The DRA will work to level that field by pushing for legislation around issues like better data access and fee transparency. And yet the group ultimately hopes restaurants and delivery apps can settle their differences on their own, without the need for regulation.
“It would be nice if we’re not asking politicians to intervene,” Reinstein said. “It would be nice if we as an industry figured this out.”
As such, the DRA does not support government-mandated delivery fee caps like the one being debated now in New York City, fearing it would set a dangerous precedent that could come back to hurt operators.
“If we do say, ‘Oh, we can set other companies’ pricing through political action,’ politicians then absolutely have the ability to set labor costs as well,” he said.
Instead, the DRA is pursuing more openness about what the providers’ various fees mean and who is benefitting from them. Restaurants, for instance, generally pay separate fees for delivery and marketing that can add up to as much as 30% of the order total. Customers pay delivery and service fees, taxes and tips.
“It’s just not clear to anybody what all the fees are,” Reinstein said. “And really the biggest concern is who is the ultimate recipient of all those fees?”
He said making that clear will help restaurants because it will allow customers to make more informed decisions. It could, for instance, encourage them to order directly from the restaurant rather than through an app, where prices and fees tend to be higher.
The DRA will also push delivery apps to share more customer data with restaurants, another major sticking point between the two groups. Currently, restaurants can get anonymized order information, but they have no way of identifying or communicating with individual customers.
Access to a bit more data, like a person’s name and phone number, would allow restaurants to contact a customer who has had a bad delivery experience. It could also allow them to market directly to that customer later on.
“We believe strongly that when a customer orders from a restaurant [on a third-party app], they’re the restaurant’s customer,” Reinstein said.
Delivery companies have long resisted giving up that data because they want to own those customers and because they can sell the information to third parties. They have also cited privacy concerns.
But Reinstein said the DRA is already making progress on that and other fronts, in part by persuading the apps that a more restaurant-friendly approach is in their best interest.
“They’re saying all the right things, and I believe them,” he said. “I think that they’re going to look at the way that they share data or the way that they connect customers throughout their brand experience and the way they figure out fees. I think that those are all things that are moving needles.”
He predicted, for example, that delivery providers will start thinking about how to share the minimum customer data needed to ensure a good guest experience while retaining enough that it can still be monetized.
“What I hope is that the big third-party platforms realize that it’s in their short- and long-term business interest to create a more positive customer experience,” he said.
The Chicago-based DRA is currently looking for members, whose monthly fees ($50 per location) help fund the organization and unlock access to educational materials and other resources.
More than 100 restaurant brands representing more than 10,000 locations have joined the DRA since it went public about three weeks ago, Reinstein said. Members include Portillo’s, IHOP and Bloomin’ Brands, the parent of Outback Steakhouse.
Reinstein, whose resume includes fundraising for President Obama’s re-election and planning his 2012 inauguration, said leading the DRA is the most gratifying and rewarding job he’s ever had.
“I spend all day long doing nothing but talking to restaurant operators,” he said. “They can’t believe someone’s fighting for them.”
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