Are food delivery apps killing restaurants?

Updated19 August 2025 · original article published 16 January 2023

In the neon-lit, bustling streets of Saigon, convenience is king. With a few taps on a smartphone, a steaming bowl of phở or a crispy bánh xèo can arrive at our doorstep in minutes. Food delivery apps like GrabFood, ShopeeFood, and Baemin have become an indispensable part of our daily lives, a lifeline during the pandemic and a modern comfort we now take for granted. But behind this seamless convenience lies a growing, uncomfortable question: is our reliance on these platforms slowly killing the very soul of Saigon’s vibrant independent restaurant scene?

While these apps offer a gateway to thousands of hungry customers, their business model, particularly the notoriously high commission fees, is creating an unsustainable environment for the small, family-run eateries that make our city’s food culture so unique. It’s time to look past the convenience and examine the real cost of our delivery habits.

The Double-Edged Sword: Why Restaurants Can’t Quit the Apps

Before we cast the apps as the villains, it’s crucial to understand why they became so dominant. For many restaurant owners, partnering with these platforms isn’t just a choice; it’s a necessity for survival in the digital age.

A Lifeline During the Pandemic

Let’s not forget the recent past. During the stringent lockdowns of the COVID-19 pandemic, these apps were the sole connection between restaurants and their customers. They provided the infrastructure for a “delivery-only” model that kept countless kitchens open and staff employed when dine-in was impossible. They were, in no uncertain terms, a lifeline.

The Promise of Visibility and Unprecedented Reach

For a small restaurant tucked away in a quiet hẻm (alley), marketing is a constant challenge. Food delivery apps present an irresistible proposition: instant access to a massive, city-wide user base. Suddenly, a small eatery in District 3 can be discovered by a customer in District 7. This digital storefront offers visibility that would otherwise require a significant marketing budget, effectively leveling the playing field—at least on the surface.

The Hidden Costs: How Delivery Apps Squeeze Profits to Zero

The initial promise of visibility quickly fades when restaurant owners face the harsh reality of the platforms’ commission-based model. This is where the partnership begins to feel less like a collaboration and more like an extortion.

The Crippling Commission Fee Crisis

The original article’s mention of a 35% commission fee is not an exaggeration. In Vietnam, commission rates for major food delivery apps typically range from 25% to 35% per order. Now, consider the razor-thin profit margins of the food and beverage industry, which often hover between 3-5% for small, independent businesses after accounting for rent, ingredients, staff salaries, and utilities.

Let’s do the math: A restaurant sells a meal for 150,000 VND. The app takes a 30% cut, which is 45,000 VND. The food cost might be 50,000 VND, and other overheads (rent, staff, electricity for that order) might be another 45,000 VND. The restaurant is left with a mere 10,000 VND in profit, or worse, breaks even. This model works for massive chains like McDonald’s or KFC, which negotiate lower fees (around 15-20%) and operate on a high-volume, low-cost model. But for the local phở shop selling 50 bowls a day, it’s a recipe for disaster.

Losing the Most Valuable Asset: The Customer Relationship

When an order comes through an app, the restaurant serves a ghost. They see an order number, not a person. The app owns all the critical customer data: their name, contact information, and order history. This makes it impossible for the restaurant to build a direct relationship, run its own loyalty programs, or re-market to its best customers. They become completely dependent on the app’s algorithm to bring customers back, losing the very essence of community-based hospitality.

Trapped in the Algorithmic Prison

To make matters worse, restaurants are forced to compete within the app’s ecosystem. They are constantly prompted to pay for “visibility boosts,” “featured listings,” and to fund in-app “promotions” (like “Freeship” or “50% off”). Refusing to participate means getting buried by the algorithm, while participating means sacrificing even more of their already minuscule profit margin. It’s a vicious cycle where the only guaranteed winner is the platform itself.

Beyond the Balance Sheet: The Erosion of Saigon’s Food Culture

The damage isn’t just financial. Our city-wide shift towards delivery is fundamentally altering the fabric of our food culture in ways we are only beginning to understand.

The Decline of the In-Person Dining Experience

As the original article so eloquently put it, food is meant to be experienced. Dining out is a multi-sensory event: the sizzle of food from the kitchen, the ambience of a thoughtfully decorated space, the warm service from staff, and the joy of sharing a meal with loved ones. It’s about trying the chef’s creative “off-menu” special or having a waiter recommend the perfect pairing.

Delivery reduces this rich experience to a transactional exchange, and the food itself suffers. A perfectly crafted bowl of noodles, designed to be eaten piping hot, becomes a lukewarm, congealed clump after 20 minutes in a plastic container on the back of a motorbike. The restaurant’s reputation, so carefully built, is now at the mercy of a third-party driver and Saigon’s unpredictable traffic.

The Rise of “Ghost Kitchens” and Culinary Homogenization

This delivery-centric model has given rise to “ghost kitchens”—cooking facilities with no storefront, no seating, and no soul, existing solely to pump out delivery orders for virtual brands. While efficient, they risk homogenizing our food scene. Menus become optimized for delivery and app algorithms—favoring items that travel well and have high search volume, like fried chicken and milk tea—rather than reflecting culinary passion and heritage. The unique, quirky, and specialist restaurants that can’t “gamify” the system are the ones that disappear first.

The Path Forward: How We Can Reclaim Our Food Scene

I am not saying we should delete our food apps. As the original author noted, that would be hypocritical. But we can become more conscious consumers and make choices that actively support the local businesses we love.

Dine In and Discover the Difference

The single most effective action is the simplest one: go out to eat. Make it a habit. Instead of one of your weekly delivery orders, visit a restaurant in person. Experience the food as the chef intended. You’ll not only get a better meal, but you’ll also be supporting the entire ecosystem—the servers, the kitchen staff, and the owner who poured their life savings into their dream.

The Power of Ordering Direct

If you must order in, bypass the middleman. Most restaurants today have a Facebook or Instagram page with a menu. Many use Zalo or a direct phone line for orders.

• How to do it: Search for the restaurant on Google Maps or Facebook. You will almost always find a phone number.
• The benefit: By ordering directly, 100% of your money goes to the restaurant. You might have to pay a delivery fee to a GrabExpress driver, but that fee goes to the driver, not a tech giant, and the restaurant still comes out far ahead.

Be a True Supporter

When you have a great meal, leave a positive review on Google Maps or food blogs, not just on the delivery app. This helps the restaurant build its reputation outside the closed ecosystem of the apps. And if you need inspiration for new places to try, check out platforms dedicated to independent businesses—like the Deals page on the Saigon Scene App, which features many local gems that would love your support.

The relationship between restaurants and delivery apps is a complex one, born of necessity and fueled by our demand for convenience. The apps are not inherently evil; they are powerful tools. But their current business model is parasitic, draining the lifeblood from the small, independent restaurants that make Saigon’s culinary landscape one of the most exciting in the world. The future of our city’s food scene doesn’t lie in an algorithm; it lies in our choices. By dining in, ordering direct, and championing local, we can ensure that Saigon remains a city of incredible food,

Frequently Asked Questions (FAQs)

Q: Just how high are commission fees for food delivery apps in Vietnam?

A: Yes, they are significantly high. Commission fees for major apps like GrabFood and ShopeeFood typically range from 25% to 35% per order. For an industry with notoriously low profit margins like F&B, this fee can wipe out the entire profit for a restaurant, especially for small, independent ones.

Q: Isn’t getting an order through an app better than getting no order at all?

A: In theory, yes, but the reality is more complex. Many restaurants report that app-based orders are barely profitable and only help them “keep the lights on.” This dependency also prevents them from building direct customer relationships and forces them into a race-to-the-bottom with discounts, devaluing their brand and product in the long run.

Q: Why don’t small restaurants just stop using these apps if they’re so bad?

A: Many restaurants feel trapped. The apps have become so dominant in the market that not being on them means being “invisible” to a huge segment of potential customers. They fear that leaving the platforms would cause a catastrophic drop in revenue, even if the profit on their current app orders is minimal.

Q: What is the single best way to support my favorite local restaurant?

A: The absolute best way is to dine in at the restaurant. If you must order delivery, find their phone number or Facebook page and order directly. This way, 100% of your money goes to the restaurant, helping them to not just survive, but thrive.

Q: Are there any alternatives to the big delivery apps in Saigon?

A: Currently, the market is dominated by a few major players. However, a growing number of restaurants are building their ordering systems via websites or social media. Supporting platforms that focus on highlighting and providing deals for independent businesses (like Saigon Scene) is another great way to help restaurants reduce their dependency on the major delivery apps.