Delivery fee fallout: Seattle restaurants closing, drastically changing business model

SEATTLE, Wash. — A stalemate between two parties has led to the suffering of another.

One restaurant is closing and another is making drastic changes to its business model. Both owners cite poor sales, particularly in the months after a $5 fee was introduced for all Seattle customer orders on apps like Doordash and Uber Eats.

For months, the Seattle City Council has avoided adopting a proposed compromise bill pushed for by third-party apps out of concern for food delivery drivers’ earnings.

But for locally owned restaurants, especially, the impacts are being felt.

In Seattle’s Capitol Hill neighborhood, for example, Oma Bap is closing down its location along Cal Anderson Park. Thursday is their last day, and it comes after eight years of serving Korean-style rice bowls to hungry customers.

“We all really loved it and was hoping to order from them again,” said Guenevere Wilson, a patron of Oma Bap. “It is really delicious, and it’s not super expensive.”

Oma Bap was packed Wednesday night, and if it weren’t for a sign saying they would be shutting down Thursday, you’d never know the bustling restaurant was struggling.

“Capitol Hill as a neighborhood? A huge population of young people,” said Sebastian Jayaraj. “These people don’t necessarily cook at home.”

“Sad that they’re closing,” added Wilson.

The owner told KING 5 Wednesday that their business relies heavily on food delivery, and these days, it is not sustainable for them to run the Capitol Hill location (their other location is in Redmond on the Microsoft campus). She believes a big reason for that is the lack of sales from food delivery customers frustrated with the fees on the food delivery apps.

Wilson said her husband, who used to frequent the apps, is proof of that and that he has “been dissuaded from using them because it’s very expensive.”

Oma Bap’s owner told KING 5 they saw a 40% reduction in delivery sales in February and March. It was mid-January when apps added the fee after the Seattle City Council’s Pay Up Ordinance went into effect for delivery drivers.

Jayaraj said it’s always a shame when a community restaurant closes.

“There’s a whole ecosystem which will get disrupted when one restaurant leaves a spot,” said Jayaraj. He is hopeful policymakers will take a look at the cascading impacts on restaurants.

Meanwhile, down in White Center, another restaurant owner told KING 5 that they, too, rely heavily on delivery sales, but this spring, the going got tough.

“That’s really kind of what turned people off, to do ordering,” said Brian O’Connor of the fee on app orders.

Unlike Oma Bap, he is staying open, but he is making drastic changes by starting his own delivery system. This month, he cut ties with all of the third-party delivery apps. He said the reasons expand beyond just the delivery fee, however.

“It would have been a slow bleed, you know, over the– over the next few months, if we didn’t make the change and try something different,” said O’Connor.

He is hoping his decision will lead to more control over their product and more enthusiastic customer loyalty. By having people order their gluten-free fried chicken directly through their app, he is hopeful customers will keep coming back.

“It’s about quality, you know?” said O’Connor. “It’s an interesting path we’re taking. That’s a touch scary here and there. But we’re figuring it out, you know, and then, the reception that we’ve gotten from the from the city has been great.”

Seattle City Council is expected to make a decision on whether a revised compromise bill will be adopted in the next week or two, so stay with KING 5.