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Ohio City Temporarily Gets Into The Food Delivery Business

NOEL KING, HOST:

During the pandemic, a lot of restaurants are closed for in-person dining and need food delivery services like DoorDash or Grubhub to work with them. But the service is expensive. An Ohio town is trying to fix this problem with a new economic development initiative. From WCPN Ideastream in Cleveland, here's Annie Wu.

ANNIE WU, BYLINE: Watch out, UberEats and DoorDash. There's a new food delivery service in town - that is, if you're one of the 12,000 residents of Beachwood, OH. The town now has 10 delivery drivers who navigate this Cleveland suburb's neighborhoods to bring carryout to residents.

KAREN CARMEN: The beauty of this is that we don't have a ton of traffic, so we're not going to be stuck in traffic jams like a big, big, big city.

WU: That's Karen Carmen, Beachwood's community services director, and Beachwood Delivers is her brainchild.

CARMEN: Believe me. I - we are not taking over UberEats or DoorDash or Grubhub.

WU: But they are partnering with 10 restaurants in the city to provide delivery at no cost to residents or restaurants. Beachwood Mayor Martin Horwitz says it's similar to another delivery service this affluent city has long been providing.

MARTIN HORWITZ: We're used to transporting seniors to appointments and everywhere else. We can certainly deliver a pizza.

WU: About a mile down the road from City Hall is a block-long row of upscale stores and restaurants, including Cedar Creek Grill.

KATE PARENTE: What can I get for you?

WU: Inside the dark wood- and glass-paneled doors, Kate Parente is taking orders over the phone. Next to her is a laminated list of city addresses. If the customer lives within the five square miles of Beachwood city limits, she rings a dispatch service for pickup.

PARENTE: Did you want this for a specific pickup time to be delivered to you or as soon as we can get it out there for you?

WU: Beachwood Delivers allows restaurants to circumvent the high fees delivery companies charge. Consider, for instance, what Cedar Creek pays the delivery service DoorDash. Restaurant operations director Tim Davin says the fee really cuts into his bottom line. Let's look at a hundred-dollar order.

TIM DAVIN: Well, immediately, $30 of that is going to go to DoorDash of that $100. Another $30 is going to go to pay for the food. All things being equal, another almost $30 is going to pay for labor.

WU: And Davin says on top of that are other overhead costs. But delivery and takeout are now essential if restaurants like this are going to survive. Before the pandemic, takeout accounted for less than 3% of Cedar Creek's business. Now it's nearly 30% of sales.

DAVIN: We're realizing that, more and more, delivery becomes almost mandatory in these times. There's people that can't get out or don't want to leave their house or don't want to climb in a car and go.

WU: Across the country, local governments are going after high delivery fees. Cities including Seattle and New York have placed caps on delivery commissions. In Boulder, Colo., officials are using CARES Act money to subsidize delivery service there. Back in Beachwood, Karen Carmen says the city's food delivery service is just considered part of its economic development plan on wheels.

CARMEN: Not only do you have to grow businesses and move people into your city, but you have to maintain and retain the people that are here. And this is a great way to retain the businesses that we need.

WU: For now, this city has set money aside to deliver dinner for local residents for the next 30 days or so. Then they'll decide whether to expand to more restaurants or to provide lunchtime delivery service, too. For NPR News, I'm Annie Wu. Transcript provided by NPR, Copyright NPR.