Trendy Sydney cocktail spot the Golden Gully made $1,000 in a matter of hours, all without opening its doors.
Cocktail coupons. Wine deliveries and subsequent tasting sessions via Zoom. Online cooking lessons with the chef. This is what’s on offer at the Virtual Gully, the newly launched digital version of the bar and restaurant.
Deemed “non-essential” businesses, innumerable cafes, bars, pubs and restaurants have shut down around the world as country after country puts citizens on lockdown due to thepandemic. Hospitality businesses in US cities like New York and Los Angeles have been shuttered since mid-March, allowing takeaways and delivery only. The UK followed a week later. Australia’s measures went into effect this week.
Unlike office workers, people who make their living in restaurants and bars can’t adapt to the coronavirus spread by simply working from home. With customers locked inside their houses, it’s one of the industries most sensitive to city shutdowns. Global jobs at risk have yet to be calculated, but the hospitality industry employs over 16 million people in the US alone. Unite, a union, estimates that one-third of the UK’s 3.2 million hospitality jobs are at risk.
Some venues remain partially open, selling takeaway coffee, food and, depending on licensing, alcohol. Some have shut completely and hope to make it through to the other side.
Others, flustered, are trying something new. Bread Ahead, a bakery in London, has started livestreaming home baking sessions on Instagram, selling online gift vouchers for bread and future workshops. Après, a gluten-free cafe three stops away on the tube, has turned itself into a supermarket, delivering its produce to customers. Across the pond, in New York, an employee at a Jack’s Wife Freda cafe started a GoFundMe to help pay its three stores’ employees.
“Most of us live paycheck to paycheck and when restaurants were ordered to close by the government we all suddenly found ourselves unemployed overnight,” explained Kate Waldron, the employee behind the fundraiser. The GoFundMe raised $6,500 in the last week.
“It was either just cop it or do something about it,” said Daniel McBride, co-owner of the Golden Gully. The Virtual Gully project has continued to bring in money, more than McBride anticipated. But with Australian officials uncertain how long the shutdown will last, or whether more draconian measures will be enacted, it’s hard for him to be too optimistic.
“It’s great, it’s money we didn’t [expect to] have,” he said, “but it won’t last. It’s not a sustainable business model.”
It’s a similar story for the owner of New York’s Mile End Deli, Joel Tietolman. His deli continues to serve bagels, poutine and more through an online delivery portal that predated the coronavirus. Days after the New York shutdown was announced, Tietolman added a feature to the service: As customers check out, they can now sponsor meals for medical professionals on the frontline.
Over 200 packages have been sent in the last week. Between this and the deli’s regular customers, Tietolman can keep the venue open and his staff employed. He estimates revenue to be 40% of March’s usual level. It’s enough to pay staff and buy ingredients, but not enough for bills like rent, water and taxes. Profit is not on the menu.
“All of this is being done for the complete disregard of the viability of my business long term,” he said. “If half the restaurants and New York declare bankruptcy at the end of this and I’m one of them, so be it.”
Just like the COVID-19 spread has forced companies around the world to invest in work-from-home infrastructure that’ll outlive the virus, the adaptations small venues are making could stand as legacies of the shutdowns.
McBride said the Virtual Gully will live on, even when the Golden Gully is allowed to re-open its doors. Tietolman has changed the way he pays staff. Now everyone gets paid the same hourly rate, as opposed the standard model where back-of-house workers like chefs get paid more to account for not getting tips — which he said will stay in place once New York’s lockdown ends.
“At the end of this all, it’s gonna be a whole new world,” Tietolman said. “The way hospitality is run is gonna change.”
With dining-in no longer an option, many venues are trying their luck with Uber Eats and its kin. Uber has kept numbers close to the chest. But Matt Maloney, CEO of Grubhub, one of Uber Eats’ US competitors, said it’s getting “5 to 10 times” the usual amount of restaurant sign-ups, according to Yahoo Finance.
Deals vary, but cafe and restaurant owners say fees charged by these companies, around 30% in Uber Eats’ case, mean that it’s only possible to make money with McDonald’s-esque volume.
How will that work for, say, a small cafe? “We don’t know,” said Jim Papadakis, owner of Queenside, a chess-themed cafe in Sydney. “We’re gonna give it a go. We have no other choice.”
Food aggregator platforms have cut costs for restaurants since lockdowns went into place. Uber Eatsuntil April 19. US-based DoorDash is eliminating commission fees for pick-up orders, as well as cutting sign-up fees for new businesses. Grubhub will temporarily defer $100 million worth in commission fees to help businesses struggling through the COVID-19 shutdowns.
Yet many insist it’s not enough. Grubhub’s commission deferral is actually a commission delay: After the deferment period ends, venues will have to pay back the money they saved. Meanwhile, over 43,000 have signed a Change.org petition demanding all food delivery platforms cut commission fees by half. A quick examination of the balance sheets — Uber Eats lost $461 million in 2019’s final quarter — shows that this accommodation unlikely to be affordable.
More helpful for McBride at the Golden Gully has been Instagram and now Facebook, where he’s begun to promote the Virtual Gully. If this was 15 years ago, McBride notes, he’d be forced to call his regulars to advertise the service. He plans to shuttle wine, beer and cocktail jugs from the bar to customers throughout the weekend.
“Gotta make hay while the sun is shining,” he said. With more intense lockdown measures expected for Australia soon, he may not have long.
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