Technology Was Never Meant to Save Restaurants
(Tell that to technology companies.)
Welcome to Expedite, a (mostly) weekly newsletter by Kristen Hawley covering what’s important in restaurant technology.
Uber Eats released a joint report with Technomic on Tuesday, detailing the impact of third-party delivery during the pandemic. As these surveys are wont to do, findings skewed favorably toward Uber Eats because they relied on a survey of 418 restaurants that already partner with the company. (Over 350 of those restaurants also partner with another third party, it said.) One stat that Uber trots out in its own blog post is that 3 in 4 restaurants say they would have had to shut down were it not for Uber Eats. Ok!
Additionally, 81 percent of operators answered that they agreed or strongly agreed with the statement “If not for third-party delivery, I would have had to lay off staff members.” Uber’s blog post interprets this as “81% would have had to lay off staff members if not for third-party delivery” which I don’t think is exactly the same thing — does that mean that 81 percent of restaurants using Uber Eats didn’t lay off any staff? That is… an improbably high number in my opinion given my own recent reporting — but here I go, splitting hairs contained within a corporate blog post.
There’s a bigger issue here, and it’s one that bears addressing: it’s time for technology companies to stop taking credit for restaurant survival.
The report even calls out some of the harder-to-swallow industry data, like 8 million unemployed restaurant workers in the first month of the pandemic alone; and that operators reported laying off over 80 percent of their staff, yet somehow seems to position Uber Eats as unequivocally helping the restaurant industry. (Can you understand why I’m having a hard time with that new 81-percent-say-third-party-saved-their-staff statistic?)
Uber Eats uses this data as a jumping off point to announce some new things: online ordering via a restaurant’s website, waived fees for pickup orders, some new functionality on the restaurant side.
I’m generally sympathetic toward third party delivery services and restaurant tech; I think there’s value and promise in tech and its application in new ways to improve operations and inform future decisions. I’m happy to admit this. It’s why I started a restaurant technology newsletter in the first place. But! A delivery app isn’t saving your local restaurant business just like Zoom isn’t saving your yoga routine. And remember, restaurants, in most cases, *pay for the privilege* of using these platforms. So really, sharing numbers like these is akin to saying “most of our customers want to be our customers.” Cool! I believe that — and I’m glad they find value in your offering. I still don’t believe that this means that any product or service will save the industry.
They might be doing the opposite, actually. New data released this morning from Yelp shows a “statistically significant correlation” between an increase of consumer interest in listings like restaurants, bars, and nightlife in May and an increase in Covid-19 cases in June in certain locations. Consumer interest in the same things (including gyms, I should say) didn’t increase nearly as much in places like New York and Massachusetts among other states with the largest decrease of Covid cases in June.
It’s not Yelp’s fault that people are using Yelp the way Yelp was intended to be used — to search and leave ratings and reviews of businesses they’re interested in. But restaurant tech companies also have a recent history of meeting the moment. Early on, most waived fees for restaurant customers, or offered them breaks on marketing and other services because they knew they had to in order to see any business on the other side of this mess. What does that responsibility to restaurants look like now as consumers take to their smartphones to discover local businesses on a platform that reaches millions? (I have a significantly smaller reach here, but, um, please wear a mask.)
A recent Eater piece also criticized Yelp, saying it could — and should — do more for restaurants right now:
“Yelp has acknowledged the current moment by imploring reviewers to take a restaurant’s precarious position into account before leaving a review, noting that reviewers should “remain empathetic and patient with businesses.” But the platform’s concurrent claim that “reviews remain as important as ever during COVID-19,” raises some eyebrows,” it reads.
(I’ve mentioned this before, but Yelp does have a zero-tolerance policy for reports of contracting Covid at a business, though it relies on its normal reporting channels — i.e., “flag for review” — to police this.)
Of course, Big Tech isn’t the only entity taking credit for saving restaurants right now. Enter: the ghost food hall, which, according to experts quoted in the Washington Post, could also save restaurants.
If we’re going to talk about saving restaurants, I guess it’s worth deciding what about restaurants we’re trying to save. The brand? The food? That one sandwich you, personally, love? The place you got engaged? The generations-old legacy restaurant that’s been a comfort to you your entire life? The local chef who’s involved in their community and makes your neighborhood a better place to live? The business that employs hundreds of people who themselves have families and lives? Or just the convenience of getting whatever you want delivered to your house at 7pm on a Tuesday night?
There’s not a right or wrong answer here, but when it comes to technology swooping in to make any dimension of the restaurant experience better, easier, more cost-effective, more marketable, or just viable at all, knowing what we’re trying to save — and knowing also what the tech industry is trying to save —makes a big difference.
I believe in a segmented industry, and less in any one-size-fits-all solution. I think there’s a place for robot-made pizza just as there’s a place for a completely disconnected dining experience unencumbered by tech. It’s important to imagine them separately. Large companies like third-party ordering and delivery services are going for broad growth, working to penetrate all facets of the market. The pandemic has expedited this, given them the marketing hook they need to somehow prove that they are indispensable to restaurant operations, and therefore, indispensable to your life. Everyone has to eat, right?
Uber Eats’ new research serves to confirm this, and as we’re conditioned to digital convenience, we can understand it. But in reality, technology isn’t our savior because it’s not a replacement for the human-powered hospitality we so desperately miss.
What else is happening?
Local delivery services might be the way forward right now. I missed this last week and I want to come back to it. There’s a new app called ChewBox, launched and operating in Los Angeles, operating in the former Loco’l space in Watts. Food & Wine has a nice story about it, and Loco’l co-founder Roy Choi is involved. It does have expansion plans, but it’s starting small.
Food delivery is a local business. Regulations, from service fees to minimum wage, and operational constraints like the best business hours and traffic patterns are location dependent. Uber’s early growth strategy is proof of this. A decade ago, the company grew by depositing a “city manager” into targeted expansion areas allowing them to spin up operations with a local team, less connected to a corporate HQ, more connected to their operating area. (Of course, this strategy changed under Uber’s new CEO and the company’s massive scale, but that only proves my point further.)
The potential for growth and scalability make these big companies tech companies. Take that away, add a targeted local focus, and you get… a hospitality business. Imagine that.