The downsides of online restaurant ordering services

For customers, there is little not to like about Seamless. You pull up a website or an app, find a restaurant nearby, and pick out a few dishes to have delivered. Your credit card gets charged and you don’t have to speak a single word into the phone.

Pedro Mu?oz sees things different. The founder and owner of Luz, a trendy Latin American restaurant serving lobster guacamole, pupusas, and Peruvian-style chicken in Brooklyn, decided to cut ties with Seamless starting on Aug. 10. He’s been including a letter in all delivery orders explaining the decision and directing customers to the restaurant’s website for online orders. For Luz, Mu?oz says, the extra business brought in by inclusion in online-ordering services wasn’t worth the high fees and other expensive strings that came with it. “It’s awesome if you’re a customer. It’s great,” he says. “But in all aspects it’s killing the restaurants. It’s a model that cannot be sustained.”

Seamless takes a 14 percent commission from every order at Luz, according to Munoz, and requires his restaurant to pay additional fees for advertising and credit-card transactions. Those rates rose along with the restaurant’s volume of orders. Seamless also holds funds for 40 days before distributing them, the restaurateur explains, meaning an increase in business through Seamless led to Luz having less cash on hand to keep running. At times, Mu?oz says, he has been waiting for up to $20,000 from Seamless, an untenable situation for a business making its living on the thin margins of the restaurant industry. (A representative for Seamless says fees vary depending on the restaurant and payments are made every 30 days, but doesn’t otherwise dispute Mu?oz’s claims.)