Little Star Pizza has been a fixture of San Francisco since it opened in 2004, but lately, Brian Sadigursky has grown concerned about its future as the business has become more reliant on third-party delivery apps.
Sadigursky, who independently owns and operates the Little Star Pizza store at 846 Divisadero St., is currently on four different food delivery platforms: Grubhub, Uber Eats, DoorDash and Postmates. Sadigursky told SFGATE that the mounting fees have “severely impacted” Little Star Pizza, and he worries that if he removes the business entirely from the platforms, he may have to close for good.
“If I get off the apps, I’m done tomorrow,” Sadigursky told SFGATE. “I won’t be able to make payroll. If I stay on, we are running in circles to pay commissions with basically nothing left in profit. … And at this point, it’s been ‘death by a thousand cuts.’”
Removing his Little Star Pizza from the food delivery apps would equate to losing about 40% of his business’s revenue. Sadigursky began to feel the pressure of financial instability last year and shared that the gains he makes from food delivery apps have primarily been used for rent and staff wages. He added that he is barely breaking even.
On Tuesday, Sadigursky shared a post on Instagram following the Washington Post’s story on food delivery app cost breakdowns and their impacts on businesses. Sadigursky observed that while apps are helpful, they tend to leave small profits once business owners pay marketing and commission dues. Sadigursky told SFGATE that he’s been more vocal about his concerns now because he’s unsure Little Star Pizza will be able to “survive.”
“Thanks @washingtonpost for the article on how food delivery app orders breakdown,” Sadigursky wrote on Instagram. “For restaurants, it’s a race to the bottom. We need the revenues, but there’s basically nothing left in profits after the commissions and marketing expenses. It’s parasitic. As a consumer, if you value locally owned businesses, order directly from them and don’t allow DoorDash, UberEats, or Google to skim off them with their commissions. These companies will inevitably put a lot of small restaurants out of business.”
Earlier this year, San Francisco ended its 15% commission fee cap set for delivery app companies following a lawsuit issued by DoorDash and Grubhub. The shift allowed delivery companies to charge restaurant owners upward of 30% commission fees. Despite the commission spike, Jessie Barker, owner of Media Noche, told SFGATE that she felt she couldn’t end her commitment to the apps.
Little Star Pizza is at 846 Divisadero St. in San Francisco.
Gamma Nine Photography“The ugly truth is you do have to partner with these delivery services,” Barker told SFGATE in February. “It’s necessary in order to go along with the evolving face of restaurants in San Francisco.”
Douglas Mathieux, the owner of Artesano, likewise told the Post that the apps count for a third of his San Francisco restaurant’s business and that if he were to stop using them, he would “be shooting myself in the foot.”
Little Star Pizza has its own online ordering system, but Sadigursky said that customers prefer the convenience of the delivery apps — even though they charge customers more. He’s included a message on his business website to remind customers that the restaurant has its own ordering system in addition to the option of placing phone orders. It’s been tough changing customer behavior, but Sadigursky hopes that they will consider ordering from him directly instead.
“We do our best to tell [customers] if they order from us directly, the price is going to be lower,” Sadigursky said. “We’re just a vessel for third-party delivery apps. It’s gotten to the point where it feels exploitative.”