New Delhi: In an era of instant gratification and digital convenience, food delivery apps have transformed the way we dine. From late-night biryani cravings to midweek pasta orders, services like Swiggy, Zomato, Uber Eats (where still active) and Dunzo etc have revolutionised the restaurant industry — especially at the local level. But this revolution is a double-edged sword. While these platforms offer increased visibility and sales for local eateries, they also bring along logistical, financial and cultural challenges. The question now is no longer whether delivery apps have impacted local restaurants, but how they are reshaping them in lasting ways.
The Pandemic Catalyst
Although food delivery apps had been growing steadily for over a decade, the COVID-19 pandemic acted as a major accelerator. With in-person dining restricted or discouraged, delivery became the lifeline for restaurants — especially small, local ones. For many, joining a delivery app wasn’t a choice but a necessity. This period saw a surge in cloud kitchens and home chefs joining the platforms, altering the restaurant ecosystem in unprecedented ways.
Increased Reach and Visibility
One of the most immediate benefits of joining a delivery platform is exposure. Previously, a small family-run restaurant in a quiet neighbourhood might rely solely on word of mouth. Now, it can reach thousands of customers browsing a mobile app. For start-ups and lesser-known eateries, this visibility is invaluable.
Many local restaurants report significant increases in revenue after listing on delivery platforms. Promotions, discounts and customer reviews help them gain traction quickly, sometimes even faster than through traditional marketing methods. It has also allowed niche cuisines — from Kashmiri Wazwan to Korean street food — to find their audience, expanding the culinary diversity available in urban centres.
The Rise of Cloud Kitchens
Perhaps one of the most transformative trends driven by delivery apps is the emergence of cloud kitchens — professional food preparation facilities set up for delivery-only purposes. These kitchens have no dine-in facilities, and some operate multiple brands under one roof. For restaurateurs, this model slashes overhead costs such as rent, décor and waitstaff salaries.
Cloud kitchens are particularly advantageous for local businesses looking to experiment. A restaurant can launch a new menu or cuisine under a different name without opening a new location. If it works, great — if not, there’s minimal risk.
However, cloud kitchens are also highly competitive and data-driven. Success is often determined by algorithms, customer reviews and delivery efficiency. Traditional values such as ambience, hospitality and community — long the pillars of local eateries — hold little relevance in this model.
Financial Strain from Commission Fees
While delivery apps promise exposure and sales, they come at a cost — literally. Most platforms charge commission fees ranging from 15% to 35% on each order. For restaurants already operating on thin profit margins, these fees can be crippling.
Many small restaurant owners feel trapped. Refusing to join delivery apps means losing access to a growing market segment; joining them means surrendering a significant chunk of their earnings. Some have tried raising prices on delivery platforms to offset the loss, but this can alienate price-sensitive customers.
Additionally, restaurants often find themselves forced to participate in aggressive discounting schemes promoted by the platforms. While such deals boost order volumes, they may not translate into real profit, especially for local businesses without the economies of scale enjoyed by larger chains.
Shift in Customer Behaviour
Delivery apps have subtly altered consumer behaviour. Diners who once enjoyed a slow evening out are increasingly opting for convenience. This shift has had a noticeable impact on footfall at local restaurants, especially in urban areas.
Moreover, customers now judge restaurants not by ambience or service, but by app-based metrics: ratings, delivery time, packaging and deals. For a local eatery that once thrived on personal touch, this transition to a digitised rating system can feel dehumanising.
Apps have also raised customer expectations for speed and consistency. Even minor delays can result in poor reviews that hurt a restaurant’s visibility on the platform. This pressure often forces local businesses to invest in specialised packaging, dedicated delivery staff or kitchen automation — investments they may not be financially equipped to handle.
Employment and Labour Dynamics
The gig economy, while offering flexible employment to thousands of delivery riders, has also brought about significant labour shifts. For local restaurants, this has led to reduced dependence on traditional in-house delivery staff.
At the same time, these changes bring complications. Some restaurants report issues with third-party delivery agents mishandling food or arriving late, resulting in bad reviews for the restaurant — even when the mistake was not theirs. Since the delivery agents don’t represent the restaurant directly, the brand reputation becomes a shared responsibility but not a shared control.
Data Ownership and Customer Loyalty
One of the most overlooked aspects of delivery apps is data. When customers place an order via a third-party platform, the app owns the transaction data — not the restaurant. This means local eateries lose out on valuable insights into their own customer base, such as contact information, preferences and order history.
Without direct access to this data, it becomes harder for restaurants to build long-term customer loyalty. Many platforms have attempted to resolve this with features like in-app loyalty programmes, but these are ultimately designed to benefit the app ecosystem more than individual businesses.
Creative Adaptations and Direct Channels
In response to these challenges, some local restaurants are taking matters into their own hands. Many have started developing direct ordering channels via websites, WhatsApp or their own mobile apps. Some offer special discounts or perks to customers who order directly, avoiding the middleman.
Others are embracing social media marketing to build a loyal customer base outside of delivery platforms. Instagram in particular has become a popular tool for showcasing menu items, customer testimonials and behind-the-scenes moments that foster community connection.
Some enterprising restaurateurs are also hosting “pickup-only” menus or collaborating with local delivery riders they trust. These moves are part of a larger trend toward regaining autonomy and strengthening local roots.
The Road Ahead
It’s clear that delivery apps are here to stay, and their influence on local restaurants is profound. The challenge now is finding a balance between the opportunities they offer and the control they take away.
For local restaurants, the key may lie in strategic participation. Using platforms for visibility and volume, while cultivating a loyal base through direct engagement, could be the winning formula. Meanwhile, regulatory frameworks and fair trade practices must evolve to protect small businesses from exploitative fees and data exclusion.
Ultimately, technology has changed the way we eat — but it doesn’t have to erase the soul of local dining. With thoughtful adaptation, community support, and a touch of innovation, local restaurants can continue to thrive in the age of digital delivery.
