Tech companies pivot to delivery
Welcome to Expedite, a (mostly) weekly newsletter by Kristen Hawley covering what’s important in restaurant technology.
It's Thursday, which feels like a long time since Monday.
I’m committed to aggregating a list of informative and useful information relating to restaurant and hospitality technology during these challenging times.
Emails will be archived here, with a proper Expedite website coming shortly.
Things are changing fast. Please send any relevant information or changes to firstname.lastname@example.org and I’ll update this accordingly. This isn’t exhaustive coverage — I recommend following local news sources for the latest in your area.
Pivot to Delivery
We’re nearing a week of severely reduced restaurant operations in major cities like New York and San Francisco, with other areas of the country not too far behind. Many operators quickly shifted to a delivery and takeout model as a stopgap measure to continue cooking and serving food that had already been purchased. Earlier this week I spoke to several restaurants on both coasts — successful ones — that had started operating in the red by Saturday.
Now, operators are starting to make decisions: do they continue with delivery and takeout businesses by ordering more product, or do they suspend these operations and close the business hoping to reopen on the other side?
While operators wrestle with these tough decisions, technology companies built around the dine-in restaurant industry are moving to online ordering, too. Reservations platform Resy has compiled lists of partner restaurants offering takeout and delivery in its markets, encouraging restaurants to fill out a form to have settings reconfigured to support to-go dining. OpenTable has listed delivery options in its mobile app for a few months, and is still supporting the feature — look for the “Get it delivered” option. SevenRooms, a company that handles reservations and customer relationship management, announced direct delivery for restaurant partners, allowing restaurants to accept orders directly into their systems. The service is free to “existing customers and new prospects” for the next 90 days. (I asked a SevenRooms rep who would fulfill these delivery orders but didn’t hear back by the time I hit send on this email. I’ll update on Twitter — follow me @kh.)
The third party delivery companies’ best asset right now are their fleets of drivers. This morning, Uber’s CEO told investors on a call that the company would funnel more of its rideshare drivers toward Uber Eats food delivery as demand increases. DoorDash announced a plan to fast-track recently unemployed restaurant workers who want to become “Dashers” — that’s couriers, in DoorDash speak — on the platform. (Bonus: many of these workers probably have food handling certifications, something delivery drivers are currently not required to have. This means they’re trained in the rigors of food safety, which I don’t have to tell you is of paramount importance at the moment.)
Companies like UberEats and Grubhub are still taking commission payments from restaurant businesses, even as some have waived consumer-facing fees. These commission payments alone won’t sink a restaurant business right now, but they’re a deep wound among the thousand cuts these businesses have received over the last week.
(I know these companies want to stay in business, too, but marketing via push notification with messages like “save restaurants order delivery!” would be more effective if these businesses would do their part to save restaurants. Directing customers to businesses isn’t enough anymore. Every dollar will count as a restaurant business sees if it will be able to open on the other side of this.)
What of the Ghost Kitchens?
I have a million ideas flying around my head right now, but as I hear about one independent restaurant after another closing — and many of these closures will be permanent, chef and restaurateur Tom Colicchio said that 75 percent or more American restaurants will close — I can’t help but think of companies like CloudKitchens, the commissary kitchen startup that has raised hundreds of millions of dollars at a reported $5 billion valuation. I’m going to organize my thoughts around this for Monday, but if you have some to share: email@example.com
Who else is doing what:
Larger restaurant companies that can afford and support it have moved to digital ordering platforms. Many, like Sweetgreen, have offered the technology for a while, making it a little bit easier to eliminate any person-to-person contact in restaurants. It’ll be a test of their systems and capabilities, but the big companies will stay in business. Most major American fast food companies got a seat at the table with the president this week; independent restaurants and the groups that represent them did not.
Lists and lists and lists: Lists of restaurants that offer delivery abound, and they’re changing so frequently I’m not going to list them all out here. But within the industry, I’m hearing rumblings of separating those who are taking offers directly — that is, without the third party fees — from others to maximize support dollars going to restaurants. One example: New York-based restaurant tech company Bikky has compiled a searchable list of restaurants offering direct ordering. (It’s pretty New York-centric for now.)
The great gift card rush: Everyone from OpenTable to my neighbor down the street is pushing gift cards as a way to support local businesses. It’s a potential short term solution, but could present some cash flow problems in the future. One Chicago chef-restaurateur I talked to yesterday was matching takeout and delivery orders with gift cards of equal value. I asked him if he thought he’d have trouble fulfilling such gift card demand on the other side, and he said he was sure that people wouldn’t all rush to redeem gift cards on day one of resumed operations. I am not so sure a weeks-long quarantine will completely change human consumer behavior, so if you’re buying gift cards to support businesses *please* consider the amount of capital a business will need to reopen, don’t inundate them with gift cards to redeem, and, if a business you supported with a gift card purchase closes — and some will — don’t ask for your money back (or put them on blast on Twitter, or otherwise add salt to a painful wound.)
More soon! Take care, and solidarity to all my fellow work-from-home parents
Expedite is produced by Kristen Hawley, a San Francisco-based journalist with over six years of experience covering the restaurant technology industry. Previous iterations of this content were available via Chefs+Tech and Skift Table. Thanks for reading.
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