Delivering directly
Toast’s recent Uber deal highlights a top trend.
Last week, restaurant technology company Toast added an Uber Direct integration to its ordering platform. Restaurants using Toast Delivery Services through its point of sale system can tap Uber’s drivers to deliver orders placed directly. It's an arrangement that circumvents the Uber Eats marketplace, which lists hundreds of thousands of restaurants for diners to discover and charges restaurants commissions on each order.
Uber Direct and its frenemy, competing service DoorDash Drive On-Demand, represent a next step of sorts for third-party delivery companies working to insert themselves into more restaurant transactions. The services aren’t new; DoorDash launched its then-named Drive in 2016; Uber launched Direct in 2020. When a customer places an order with the restaurant, a driver is dispatched to deliver the food. Each delivery company charges restaurants a flat, per-order delivery fee based on delivery distance. Those fees, the platforms say, can be easily passed on to the guest, either partially or in full.
The apps didn’t invent direct delivery, but they did optimize logistics. With networks that extend across the country (and, in Uber’s case, around the world), these huge and valuable companies are best positioned to take on the complexities of moving food at scale from points A to B.
Proponents of direct ordering — and fulfilling orders via this white-label delivery — say it helps restaurants. Aside from avoiding third-party commissions, Data collected last year from Paytronix, an engagement platform for restaurants, found diners who order directly with a restaurant tend to order more often, spend more, and tip better.