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Daily news and analysis about the food tech revolution

The Weekly Spoon

Hold the Phone. Soon it Will Be Your Restaurant’s Menu

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A couple of years ago I came across a restaurant in Dallas, Texas that featured a menu written entirely in emojis. It was unexpected and creative, yet clear enough that a server didn’t have to come over and re-explain everything on the page.

I’m not (necessarily) advocating we battle the current restaurant industry fallout with emoji menus, but maybe we could use some of that outside-the-box thinking when it comes to revising menu formats to fit the new reality we live in. 

Since reusable menus are basically germ repositories, it’s no surprise they’re out now that dining rooms are reopening. The CDC’s recently released guidelines for reopening suggest restaurants “avoid using or sharing items such as menus” and to “instead use disposable or digital menus. . .” The National Restaurant Association’s guidelines tell restaurants to “make technology your friend” and suggest mobile ordering, and every other restaurant tech company that contacts me these days is offering up some form of digital menu for restaurants to integrate into their operations. 

A lot of restaurants will definitely start out by offering simple disposable menus. Paper is cheaper than software most of the time, and typing up and printing out a menu is faster than onboarding your business to a new tech solution.

Over time, though, that could change. As more emphasis gets placed on digital ordering for everyone, we’ll access more restaurant menus through our own phones and mobile devices. That opens up a whole world of possibilities in terms of what restaurants could one day offer on their menus beyond just the food items themselves.

Just a few examples: Menus could provide in-depth information the ingredients in a dish, like where that cilantro came from and how many months the apple traveled before it hit your plate. Menus might also include ratings from other customers, and Amazon-esque “you might also like” recommendations could show up on the screen. Maybe you could dictate the portion size you want, thereby reducing food waste.

With AI making its way into restaurant tech more and and more, restaurants could also build dynamic pricing into menus, based on time of day, foot traffic, weather, and offer coupons and promotional offers in real time. And sure, if someone really wanted to, an emoji menu would probably fly right now in more than a few places.

Most of these things exist already, though they’re not widespread and some are still in conceptual stages. The massive overhaul of the restaurant menu is a chance to start bringing those disparate pieces together to revamp the way we order our food.

Kitchen United Is Open for Business in Austin

One effect of this whole pandemic is that we’ve seen an uptick in to-go orders, and that trend won’t subside anytime soon. That makes now a good time for restaurants — some of them, at least — to consider adding a ghost kitchen to their operations. 

Those in Austin, TX can add Kitchen United to their list of choices when it comes to choosing a facility. The company, which provides ghost kitchen infrastructure (space, equipment, etc.) to restaurants announced this week its new location near the University of Texas is open for business. 

A number of restaurant chains have either already moved into the space or plan to do so in the coming weeks. Kitchen United has also allocated one of the kitchens in the new space to Keep Austin Fed, a nonprofit that gathers surplus food from commercial kitchens and distributes it to charities. As part of the deal, Keep Austin Fed will be able to “rescue” food from restaurants with kitchen operations inside the new KU facility. 

A press released emailed to The Spoon notes that “additional kitchen space is currently available” for restaurants that want to expand their off-premises operations. On that note, a word of advice for restaurants: make sure your restaurant is actually in need of a ghost kitchen before signing up with one. Kitchen United’s own CEO, Jim Collins, told me recently that restaurants need a certain amount of customer demand in order for the economics of a ghost kitchen to make sense. It’s not a small demand, either. In times like these, where the future of all restaurants is uncertain and what little money there is needs to be spent carefully, it pays to exercise some caution, even when it comes to an enticing new trend like ghost kitchens. 

Los Angeles Moves to Cap Third-Party Delivery Commission Fees

Behold, more fee caps for third-party delivery companies. This week, the Los Angeles City Council voted 14–0 to ask attorneys to draft a law that caps the commission fees delivery services charge restaurants at 15 percent. “Why should restaurants, and their customers, be put in a position to subsidize delivery app companies? We need to level the playing field,” Councilman Mitch O’Farrell told the Los Angeles Times.

This week’s proposal would also require that 100 percent of the tips customers leave on delivery orders through these apps go directly to the driver, which is pretty standard nowadays but caused some ruckus in the not-so-distant past. The fee caps would end 90 days after Los Angeles lifts its dining room closures. 

Needless to say, the move — which several other cities have already made — is not popular with delivery companies. Postmates, which is LA’s most popular third-party food delivery service, said governments setting a price on fees threatens jobs and creates “a false choice between local restaurants and the delivery network companies that support them.” The service wants instead to have a fee charged in delivery orders that would assist restaurants. That in turn would translate to yet-another fee for the customer, and be yet-another way in which restaurant food delivery services will suggest/try anything to avoid having to shoulder some of the burden the pandemic has brought on the restaurant industry.

As restaurants slowly reopen and the industry starts to adjust to its new normal, now we’ll begin to see if fee caps actually make a difference for struggling restaurants, and if they are here to stay for the long run.

Fee Caps Can’t Save Restaurants

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I was going to use this newsletter to write about pandemic profiteering and the report that Uber wants to buy Grubhub. Then this gem of a dire headline hit: one in every four restaurants will go out of business because of coronavirus quarantines.

So says a new forecast by OpenTable, which Bloomberg reported on this week. According to OpenTable, total reservations and walk-in customers from its network (which has over 54,000 restaurants) were down 95 percent on May 13 from the same day one year ago.

That number shouldn’t surprise too much, seeing as most states have been on lockdown for the last six weeks. But according to the company’s data, even in states where restaurants are slowly reopening (at reduced capacity, of course), numbers are “still far below where they were last year.” Consider Scottsdale, AZ, which had no reservations from March 21 but saw that number change to -72 percent for May 13. Houston, TX was next, recording a -82 percent change. Other cities in Texas and Arizona, as well as those in Florida and a few other southern states saw some uptick in reservations, too. 

As much as I’d like to put an optimistic spin on this, I can’t. There are too many elements out there that make the idea of one quarter of American restaurants going under totally plausible.

For one thing, restaurants are not doing nearly as much business right now, and some none at all. Even those that have transitioned to off-premises formats struggle with the operational aspects of the model, and more and more restauranteurs say that delivery doesn’t make them any money. Full-service restaurants specializing in haute cuisine are even worse off because their food isn’t meant to be eaten out of a to-go box.

As OpenTable data shows, restaurants are slowly reopening. But those same numbers also clearly tell us restaurant traffic isn’t bouncing back to pre-pandemic rates. They can’t. States have mandated businesses operate at reduced capacity, as low as 25 percent in some cases. Diners are wary of going out to eat right now, which further reduces foot traffic. And while some states say their restaurants will be operating at full capacity by July, we’re simultaneously getting warnings of a second wave of coronavirus that could lock us all down again.

The bitter pill from all this is that we’re going to lose a lot of local restaurants. There is no way to sugar-coat that. Now we have to figure out what we can do to save at least some of them. That’s going to take a combination of government assistance, charitable donations, technological innovation, and a rethinking of what the restaurant experience means. It’s a tall order — and one we have to accept as we continue the fight to save restaurants.

More Regulation Comes for Third-Party Delivery Caps

Fee caps — another hot-button topic in the restaurant biz — got their fair share of news this week as well. New York City, which has considered placing limits on the commission fees Grubhub et. al charge restaurants for a while, finally voted to cap those fees at 20 percent while NYC is in a state of emergency.

The original bill, which was debated at a recent public hearing, had fees capped at 10 percent. The bill was modified over fears that delivery services would offset the revenue lost from fee caps by lowering workers wages. 

At the same time, Chicago’s 5 percent cap got an upgrade this week when Mayor Lori Lightfoot imposed additional rules over transparency around commission fees. Third-party delivery companies like Grubhub will now have to provide itemized recipes of all the charges involved in each transaction, including the cost of the meal, service fees, delivery fees, and, yep, commission fees.

Right now, the average consumer doesn’t necessarily understand where their money goes when they purchase food via a third-party delivery app. They may not know, for example, that there’s a difference between a tax and a service fee. Many certainly don’t know that third-party services charge up to 30 percent per transaction in commission fees for the restaurant.

Chicago’s new rules seem aimed at making consumers more aware of this. Of course the question is, will knowing that Grubhub is gutting your favorite restaurant keep you from conveniently using the Grubhub app to order?

I doubt it — for now. what needs to happen simultaneous to these rules and regulations is this: restaurants need simpler, faster ways to offer convenient off-premises options through their own digital properties. Due to time and cost, independent restaurants are unlikely to have the resources to go DIY when it comes to food delivery. Restaurant-tech companies are responding, and a number of different solutions exist that claim to reduce or eliminate fee caps. As of now, though, it’s hard to tell which tools actually deliver on that promise. 

One thing that may come out of the pandemic will be a more standardized set of tools for native food delivery. A restaurant could work with a single third-party tech company that would provide them with the infrastructure to create and manage a mobile app, from updating menus to processing orders. Restaurants would still need to pay someone to actually deliver the food, which is a huge cost in and of itself. In that case, third-party delivery services would still be relevant, and restaurants would still owe some commission fees, though not nearly as much.

Only with a solid platform for native delivery will restaurants be able to convince consumers to drop the third-party apps and order direct. If this happens, maybe someday we won’t need to rely on government regulation to give restaurants a fair playing field.

Dive Bar, Meet Your New Reservations System

In a lot of states, bars didn’t make the cut when it comes to foodservice businesses allowed to reopen. It’s not hard to see why, since they tend to be dark, crowded rooms in which strangers mingle, often in a shoulder-to-shoulder capacity. On a busy night, there might also be scores of used glasses lying around. None of that exactly instills confidence in would-be customers emerging from a pandemic.

To combat that, bars, when they do open again, will have to stick to the same reduced capacity guidelines restaurants do, and in some cases may even have to start accepting reservations.   

OpenTable clearly anticipated that development, as the company just announced it has added bars and wineries to its platform. Once “drink-focused destinations” open again, customers will be able to book a table at their favorite watering hole, join a virtual waitlist, and, at participating wineries, prepay for tasting menus. A couple famous spots — the Flatiron Room in NYC and The Roosevelt Room in Austin, TX, have already signed up with the platform in preparation for reopening. 

To be honest, it’s not hard to picture spots like those two taking reservations. They’re upscale — dare I say chic — spots you would hit for a classy night on the town. In other words, they are not your average dive bar. It’s the latter category that’s going to struggle more when bars are finally allowed to reopen. Your average bar sells $6 beer-and-shot specials, not $80 bottles of wine that could help make up for reduced capacity. Reservations will certainly help with social distancing efforts, but for bars that specialize in selling huge quantities of small-ticket items, they may not make a difference in terms of keeping a lot of places in business. 

The larger question is, How will the pandemic change bar culture in general? Once bars are allowed to turn the lights back on, your average Friday night out could look a whole lot different.

Welcome to Burger King. Did You Have a Reservation?

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Things I never thought I’d live to see: a global pandemic shutting down the economy, the McDonald’s snuggie, and fast food restaurants requiring reservations to dine in. But with the restaurant biz on the brink of catastrophic meltdown and businesses slowly reopening under strict social distancing practices, we can expect lots of new versions of the on-premises experience over the next few months — and probably a total redefining of what it means to be a restaurant. 

News landed this week that Burger King is testing an app for dine-in reservations at three stores in Milan, Italy that are expected to fully reopen on June 1. Reuters reports that the app lets customers order food and book a table before ever setting foot in the restaurant, which will operate at less than half its pre-pandemic capacity. During peak hours — 12–2 p.m. and 7–9 p.m. — roughly one-third of those tables will be reserved for customers using the app.

The company says it expects the new booking system to keep its revenue stable in the face of reduced in-house seating. Previously, BK in Italy got about 70 percent of its revenues from dine-in customers. Social distancing won’t allow for that now, and BK said it hopes to make up some of those lost sales with drive-thru.

Reservations are one way to keep crowds at bay in QSRs. Another is to build social distancing features into the actual store layout and operations, as McDonald’s has done in The Netherlands. The mega-chain is trialing a few initiatives at one store in the city of Arnhem, including table service, where burgers are delivered on trolleys, designated waiting spots for the line, and hand sanitizing stations at the store’s entrance. There may also be a host behind a plexiglass-shielded station, directing people where to stand in line.

There’s no word yet on whether this McDonald’s prototype will make its way to the U.S., though I wouldn’t be surprised if some social distancing elements wind up in the chain’s ongoing Experience of the Future store remodels. Burger King, meanwhile, has said if the trial of its app is successful in Italy, it could be used in other countries. 

And while QSRs are busy adopting features we’re most used to seeing at casual dine-in joints, the latter continues to adjust its format to be more to-go friendly. This was already happening B.P. (before pandemic). Now, sit-down restaurants are accelerating the addition of things like drive-thru lanes and self-service kiosks to keep business moving and socially distant at the same time.

All this suggests some seriously blurring lines between the normally siloed types of restaurant experiences. Going to a McDonald’s might suddenly feel like a more formal affair, while family dinner night at The Melting Pot might feel strangely casual without the usual person-to-person formalities. Tech tools that automate the order and pay process, and redistribute the tasks of servers, food runners, and cashiers, will only further change the now-fluid definition of the restaurant. 

We’re only at the start of things when it comes to these new dining out formats. Expect many more iterations of the restaurant to surface in the coming weeks. 

Grubhub Responds to Commission Fee Caps.

Meanwhile, I’d be remiss if I didn’t mention the ongoing smackdown between third-party delivery services and governments mandating caps on the commission fees these tech companies charge restaurants. That was a hot topic this week as more cities joined the list of those either considering caps or already implementing them. 

Grubhub responded this week via its Q1 2020 earnings call. CEO Matt Maloney said these fee caps force the company to increase fees for consumers, lessen marketing spend, and are ultimately resulting in fewer orders for independent restaurants. “Our preliminary data shows that on average, our independent restaurants are seeing over 10% fewer orders since the fee cap and many of these orders have shifted to a large brand or QSR restaurants that were not impacted by the emergency ordinance,” he said.

Note that he said “orders” not “revenues.” There’s no question that being on a platform like Grubhub makes a restaurant more visible to more potential customers. That in turn would hopefully fuel more orders for, say, your local pizzeria instead of Papa John’s.

But with Grubhub et al. taking an up to 30 percent commission of each restaurant transaction, more orders does not translate into significantly more revenues for restaurants. See this gem of a receipt, courtesy of one independent business, as proof of how little restaurants make on third-party platforms. 

On the call, Maloney said one-size-fits-all model “will not work.” And yet one independent restaurant owner who testified at a public hearing last week about NYC fee caps suggested there was virtually no negotiability when it comes to commission fees, suggesting Grubhub runs its own one-size-fits-all model when it comes to food delivery.

The debate around commission fees has been building momentum for some time. The pandemic has effectively stripped any remaining gloss off the facade of third-party food delivery and put its unsavory insides on full display. That the sector will need to make a pivot of its own if it wants to stay relevant seems more and more a question of “when,” not “if.” 

Amazon Returns to Restaurant Delivery. Sort of

But let’s end the week on a less-infuriating note, like Amazon running a makeshift third-party delivery service for restaurants in its corporate buildings. Drivers that used to transport the Seattle tech giant’s corporate employees are now running food from restaurant to customer, according to Eater Seattle.

Deliveries are contactless, meaning the restaurant packages up the order and sets it in the delivery driver’s trunk. Said driver then leaves the food on the customer’s doorstep. 

Once upon a time, Amazon ran a restaurant delivery service, which it shuttered in June of 2019. At the time, Amazon cited competition from the likes of Grubhub, Uber Eats, and other third-party delivery services. The new endeavor doesn’t appear to be a play by the company to get back into that space. Rather, it seems to be a temporary lifeline for local restaurants, not to mention a way to keep drivers who once ran corporate employees around working now that those employees are under stay-at-home orders.

On that note, have a good weekend, and don’t forget to tip your drivers.

Jenn

Fight Club: Mischief. Mayhem. Third-Party Delivery Fee Caps.

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If you like a good fight, the one around restaurant commission fee caps is worth watching. I spent the better part of three-plus hours the other day tuned into the New York City Council’s Committee on Consumer Affairs and Business Licensing public hearing. One hotly debated topic was around capping commission fees third-party delivery services like Grubhub and Uber Eats charge restaurants.

I’d love to say everything got resolved and NYC will be placing caps on third-party service commission fees for all time. The reality is that this fight was here long before the pandemic and will be around long after it leaves.

I’m sure you’ve heard of the brouhaha brewing around the issue. Restaurant industry advocates and businesses alike had flagged those third-party delivery commission fees — which can go as high as 30 percent per transaction — as prohibitively expensive for restaurants. With dining rooms closed now, most restaurants are left with the options of either shutting down completely or relying on a third-party service like Grubhub to help them execute on delivery orders.

One restauranteur who testified at this week’s hearing explained that for independent restaurants, the fees are more or less non-negotiable. (Side note: he also expressed fear of retaliation from delivery companies for his speaking at the hearing.) Jessica Lappin, a former NYC council member and the President of the Alliance for Downtown New York, said that even if restaurants are doing takeout and delivery right now, they are doing it at a loss. Council member Mark Gjonaj suggested that due to the commission fees, each transaction a restaurant makes is “yielding a net loss.”

Perhaps the most telling moment came when a Grubhub representative took to the mic to “express Grubhub’s strong opposition” to fee caps. You can watch the entire (and rather circular) debate that broke out here, but it more or less boiled down to the idea that if NYC and other cities successfully impose fee caps, Grubhub et al. will have to change their business model.

Therein lies the marrow of the matter in terms of why third-party delivery companies oppose commission fee caps and other changes (e.g., reclassifying workers as employees). Government oversight of those fees cost these companies more money, and further erode their chances of ever becoming profitable. An unprofitable model won’t satisfy investors, and third-party delivery as we know it would then be on the rocks.

Sky-high delivery fees and a faltering economy won’t help the model in terms of its attraction to the average end consumer. And they certainly won’t improve the net-negative returns restaurants are making at the moment.

In some cities, Big Government has already stepped in. San Francisco, Seattle, and Chicago have all introduced fee caps that will last at least as long as dining rooms remain closed. Los Angeles is considering a similar measure. NYC’s proposed 10 percent cap was actually introduced months before the novel coronavirus hit the U.S. in full force. 

As emergency measures, these fee caps feel necessary right now if independent restaurants are to have any kind of shot at keeping the lights on. Longer term, everyone (restaurants, advocates, government, tech companies, and consumers) will have a responsibility to address how much damage the delivery model is actually doing. It seems a global pandemic that’s taking lives and shuttering businesses isn’t enough to make some of these services stop siphoning the livelihood from restaurants. Are those really the businesses we want calling the shots in the restaurant industry in the future?

McDonald’s limited menu is good news for the drive-thru lane.

Among other things, like drive-thru lanes generating more sales, McDonald’s spent quite a bit of its earnings call this week talking about its menu. Since shelter-in-place orders forced the chain to close down dining rooms and rely on off-premises orders, McDonald’s has been offering a limited menu. For example, it doesn’t offer breakfast for the time being.

Cuts like that were made to help the mega-chain manage the operational difficulties restaurants face right now. On this week’s call, CEO Chris Kempczinski suggested customers should not expect every McDonald’s in the nation to immediately revert back to its pre-pandemic menu.

Smaller menus for the long term could work in McDonald’s favor, though. When we looked at the QSR Drive-Thru Study last year, one of the standout points was the steady increase in drive-thru wait times over the last couple decades. Growing right alongside those wait times has been the number of items QSRs offer on their menus.

These complex menus take longer to read, present customers with the tyranny of too many choices, and up the risk of an order being inaccurate when it is ready. None of those things make for speedy service, and with more customers likely going to opt for the drive-thru lane over the dining room now, finding ways to fulfill orders faster is crucial for QSRs.

No one is suggesting we revert back to my favorite picture of all time, this McDonald’s menu from the ’80s. But as restaurants pare down menus and plan to work with reduced capacity and limited staff once they reopen, the bloated mess of choices QSR’s previously offered may become a thing of the past.

Sweetgreen just added dinner options.

One company not paring down its menu is Sweetgreen. On LinkedIn this week, cofounder and Chief Brand Officer Nathaniel Ru unveiled the chain’s new dinner menu, called Plates.

For the last four weeks, the tech-forward fast-casual chain — most widely known for its highly Instagrammable salads — has been testing a Sweetgreen dinner menu. Via a post on Medium, the company said the process has been about “operationalizing an entirely novel concept (normally a year-long process) in just 30 socially distant days.”

That 30-day process looks, from the photos, to have turned up a menu full of plant-centric dishes and lots of legumes, grains, and sauces. If you want more details around how the team put this new concept together, the full Medium post is definitely worth a read.

Sweetgreen had been planning the dinner concept for some time in the hopes of launching it next year. But, as the Medium post notes, “given the current state of uncertainty, the need for warm, familial, and home-cooked food has never felt more important.” 

They’re right on the money. Family-style meals and comfort food are two major trends right now for restaurants as people shelter in place. I’ve never considered couscous and warm leafy greens comfort food, but I’m from rural(ish) Tennessee so what do I know? Plenty of folks are health conscious these days, and with many consumers likely to be wary for some time about going out to eat, a dinner concept is a smart play for Sweetgreen. 

Now if we could just get it delivered without those pesky commission fees. 

Curbside Bots and Contactless Everything: What the Post-Pandemic Restaurant Will Look Like

Even an introverted work-from-home veteran like me is starting to get kind of daffy during this here quarantine. But I will say that being stuck at home has given me a lot of time to think (and write) about the state of the restaurant industry, and I catch myself imagining what eating out will be like once we’re past this pandemic. So when Starbucks CEO Kevin Johnson posted a letter this week to employees about the chain’s future, it caught my attention.

In his letter, Johnson more or less said the chain is planning to reopen some of its locations and outlined a plan for doing so. To be clear: Johnson uses the words “open” and “reopen” several times in the text, but at no point promised that your local Starbucks will reopen overnight with the usual setup and operations that existed before the pandemic. 

Which is why I’m singling out Starbucks in the first place. As an international chain that has already dealt with this recovery process overseas, and as a leader in digital business and operations, Starbucks’ plans for reopening stores give us a good hint of what we can expect restaurants to look like once the process of opening the economy begins.

Pulling from Johnson’s letter as well as numerous statements and activities from other restaurants, tech companies, and governments, we put together some predictions for what the post-pandemic restaurant experience might entail.

Note that most of these predictions are around operations and the customer experience. There are a host of other issues, from labor to food waste, I’ll be unpacking those over the next few weeks, so stay tuned.

More space, fewer tables. This is less prediction and more fact, with public figures like California Governor Gavin Newsom saying restaurants will have more space between tables and fewer seats, to ensure social distancing when eating out. Separately, the WSJ noted that restaurant chains may operate at half capacity going forward, and include things like plexiglass shields between booths. That could also spell the end of buffet-style dining and family-style seating. Golden Corral, that bastion of all buffet restaurants, has closed all units for the time being. Even before state-mandated shutdowns, other businesses were nixing community seating. And grocery stores are closing down hot bars.

Lots more mobile payments. Some restaurants are already pushing customers to use their mobile apps to order and pay for food, eliminating the need to touch a kiosk or swipe a credit card. Granted, you have to have a well-designed, easy-to-use app in order to do this, which means we’ll see a surge in smaller restaurant chains developing and/or improving their own mobile experiences for customers, whether in-house or through a third-party service. I expect we’ll also see an uptick in mobile-only locations (though it’ll vary based on state laws around cashless businesses).

Curbside delivery for all. Curbside pickup was once the territory of Sonic and the odd McDonald’s location. With dining rooms shuttered these last few weeks, restaurants have had to find other ways of bringing food out. And since not all of them have been equipped with drive-thru, curbside pickup has become the default option for many. This is one of the methods Starbucks has put into practice over the last few weeks, in some cases even taking it a step further to offer “entryway pickup” for locations without parking lots.

Contactless everything. “Contactless delivery” barely existed as a phrase before China implemented it during the peak of its fight against the novel coronavirus. Now, everyone from Instacart to Pizza Hut offers it, and I doubt we’ll revert back to the old way of handing goods off between courier and customer. For contactless to live up to its name, though, brands need to think about the technical logistics behind the operation. Restaurants’ online order systems need to have the option built right into the checkout process. They should consider providing additional features, such as push notifications to alert customers when and where their order is ready. Contactless will stick around permanently for delivery and curbside orders and, when companies figure out how, probably for in-store purchases, too.

More drive-thru lanes. Austin, TX-based chain Torchy’s Tacos explained to me recently that once the chain was forced to shut down dining rooms, it quickly opened drive-thru windows in locations that had always had the feature but had never utilized it. Many restaurants set up shop in locations that were once a Wendy’s or other fast-food chain. If they haven’t already, they could utilize that space to start offering drive-thru on the regular to customers.   

Gloves and face masks for workers. Restaurants I’ve spoken with over the last couple weeks are quick to emphasize the steps they are taking to protect both customers and workers when it comes to health. Gloves and face masks nearly always come up in that conversation. They’re also part of Gov. Newsom’s plan for restaurants, and will definitely make their way into other states’ frameworks for reopening business.

Robot staff.  Having said that, though, some might just opt for robots when it comes to who’s going to handle your food. My colleague Chris Albrecht recently pointed out that dining customers might prefer “the cold sterility of a robot” to a server wearing a face mask and gloves. Robots, of course, bring up the whole loss of human jobs angle. However, as Chris notes, with fears around the virus and human-to-human contact unlikely to subside for some time, for those restaurants that can afford it, robots might be an appetizing option, at least where city laws permit. Somehow I think they would come in especially handy for running curbside orders to cars.

Okay, wait a minute. Does all this mean my future restaurant experience will involve ordering food ahead of time via an app, then waiting at a plexiglass-encased table for a wheeled bot to roll up with my burger? That sounds lonelier than a month in quarantine.

I doubt it comes to that scenario, though. The COVID-19 situation changes daily, which mean so do expectations about what restaurants will look like when the economy reopens. Maybe all of these predictions will come true. Possibly none of them will. The most likely scenario is that a few of them, like curbside pickup and mobile payments, will become industry standards, and restaurants will use a mixture of the others based on time, money, and customer volume. As states begin discussions around reopening the economy and more chains like Starbucks start outlining their plans, we’ll get a clearer picture of what to expect in the the post-pandemic restaurant experience.

Thanks to Tech, Restaurant Employees Are Accessing Earnings Faster

One area that’s part of any good discussion about the future of the restaurant concerns employees — that is, the servers, baristas, drivers, managers, and others who make up the backbone of the industry.

How they get paid is something that’s fast changing as the industry grapples with dining room closures, mass layoffs, furloughs, and general economic tension. This week, we wrote about Domino’s teaming up with challenger bank Branch to offer employees instant access to their earnings via the Branch app.

Branch is one of a few apps out there that lets hourly workers — who often live paycheck to paycheck — get faster access to much-needed cashflow. DailyPay, which we’ve written about before, is another popular one.

I see an uptick in restaurants making it possible for employees to use these types of apps in future. As everything in the previous section of this newsletter suggests, the restaurant model is rapidly changing, and it’s hard to guess now which formats are most likely to be around next week, next month, or even next year. That means it’s also hard to predict how many people a restaurant will need on staff, and how many hours those individuals can work.

With so many questions up in the air, the least restaurants can do is integrate with one of these apps to get their employees paid faster.

In a Time of Broken Norms, Restaurants Experiment to Stay Intact

So earlier this week I was chatting with a food industry colleague who pointed out the sheer amount of opportunity food businesses have right now to experiment with existing norms. At the moment, breaking those norms feels less risky because in many cases we can’t do things the old way.

No one knows this better right now than restaurants. Dining rooms are closed and once they reopen they won’t look the same. Shifting to a delivery-takeout model is a necessity, but it may not make up for all the lost sales. And lately, restaurants are going far outside their normal territory for ways to survive the double whammy of a global pandemic and an industry on the brink of meltdown.  

Selling groceries is one way.

Case in point: Subway this week announced Subway Grocery, a site where you can buy pantry staples straight out of the Subway supply chain. Think foot-long bread loaves, frozen soup, bagged lettuce, and bulk amounts of bacon. The move is a way to get consumers goods that might not actually be in the grocery stores right now (thanks, panic shopping). More importantly, it lets the chain supplement its to-go format while dining rooms stay closed due to coronavirus.

Panera quickly followed that news with a similar concept, Panera Grocery. Customers can order grocery items like breads, produce, and dairy items straight from Panera’s supply chain and via the Panera app or through Grubhub. Like any Panera meal, the goods get delivered to customers’ houses.

And in NYC, just salad launched Just Grocery, which says it will deliver household staples — from produce to paper towels — in 90 minutes or less to Manhattan residents. The company also launched a meal kit service of items from its own menu, which customers can also order from the Just Grocery site.

If I were a betting woman, I’d say more of these initiatives are to come. Right now, big chains like the ones above as well as smaller restaurant businesses (see below) have no choice but to adapt their businesses to new formats so they can add incremental revenue to severely declining sales Plus, I imagine prepping grocery and meal kit orders is another way to keep employees occupied in the process, not to mention save on food waste costs.

But what about when dining rooms open again? Will restaurants need an additional grocery business?

I’ll go on a limb here and say yes, and that at least some of these initiatives will be in place for a while. The reason is that once dining rooms re-open, they’re not going to resemble their former selves. I’m just going off my own speculation here, but I foresee the days of cramped tables close together and family-style seating as a thing of the past. Restaurants dining rooms will have way less capacity, and more than a few people will be wary of going out to eat.

That makes the additional revenue from grocery businesses an attractive long-term play for many of these chains.

Small Restaurants Turn to Big Grocery

Other restaurants are turning to grocery stores themselves, not to sell pantry staples but to get their own meals in the hands of customers at a time when eating out isn’t an option. Texas chain H-E-B launched a pilot program to carry ready-made meals from restaurants in 29 of its stores. For the program, the chain has partnered with local restaurants, some of which have been able to bring back furloughed employees thanks to the extra work (and presumably money). 

And in some cases, grocery stores are actually doing the hiring themselves. When Greensboro, NC-based chain The Fresh Market realized it didn’t have enough staff to keep up with the demand for groceries as well as the chain’s deli counter, it reached out to Darden Restaurants to hire out-of-work employees from the company’s restaurants (Olive Garden, Longhorn Steakhouse).

The sharing of employees seems more of a stop-gap measure than long-term employment solution for many individuals, particularly those building a career in the restaurant industry. Selling restaurant food in stores, however, might stick around. Like I said above, there’s a pretty good chance restaurants won’t be operating at their old capacity once dining rooms reopen, which means other sources of revenue — even incremental revenue — will be a necessary staple for some time to come.

DoorDash Slashes Restaurant Commission Fees By 50%

Of late, I’ve approached most news from third-party delivery aggregators with more than a little skepticism along with the question: Is this really helping restaurants?

DoorDash announced it is reducing commission fees for “local” restaurants by 50 percent, from April 13 through the end of May. “This is not a deferral of fees, nor will merchants be asked to pay anything back,” the company said.

Third-party delivery companies are getting an increasing amount of flack for those commission fees, which can go as high as 30 percent per transaction. Cutting back those fees would obviously help restaurants during this time.

What I’d like to know is, when will the other shoe drop? More and more, the major third-party delivery companies are seen as predatory entities that are astoundingly out of touch with the daily realities of running a restaurant. Is this news from DoorDash an about-face for the company or is the other shoe dangling in the air right now? Maybe it’s hidden fees or getting locked into a contract. Maybe it’s none of those things, though that feels too optimistic an idea in a discussion about third-party delivery.

I’ll be having a third latté and digging into the fine print, so more on this to come.

Keep on truckin’,

Jenn

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Newsletter: How to Support Restaurants Right Now Without Endangering Everyone’s Health

To do my bit in supporting restaurants right now, I’ve been ordering from them once every few days for the last couple weeks. More times than not, it’s been a logistical circus that winds up costing a lot of money and, especially lately, unnecessarily putting workers’ health at risk.

Case in point: Tuesday night I ordered online from a local burger place. While the system gave me a “curbside pickup” option, there was no curbside at which to actually park once I arrived at the restaurant. Rather, I joined a crowd of other people clustered in front of the restaurant. A lone worker frantically ran in and out of the restaurant calling names as she tried to determine which order belonged to which customer. No one wore gloves and no one was standing six feet apart.

The inconvenience of the experience is the least problematic part of this example. Far more unsettling are the financial and health risks of running an off-premises business when you’re not an off-premises restaurant. Through no fault of its own, that burger place is not equipped to efficiently manage the volume and logistics of a curbside business. It’s never had to until now.

Restaurant owners and industry folks have long argued that the dine-in experience differs greatly from a to-go operation, and that one can’t simply flip a switch and be asked to transition from one to the next without a hitch. And yet that’s exactly what thousands of restaurants across the country are at this moment being forced to do. And what you get is a scene like the other night, where there isn’t enough staff to even pick up the phone, let alone manage the influx of orders going out and customers waiting. Staffers are interacting with way too many people than could possibly be safe, and everyone’s health is at risk. There’s also evidence that an off-premises strategy isn’t even financially fruitful for many restaurants.

Is it really worth it or is there another way to support restaurants that desperately need a lifeline as dining shutdowns and COVID-19 ravage the industry?

The answer, fortunately, is “yes.” Shortly after states began mandating dining room closures, charities and funds began popping up online. Last week I wrote about virtual tip jars for servers and bartenders out of work right now. And some of these funds go directly to restaurants themselves.

The James Beard Foundation has launched a Food and Beverage Industry Relief Fund that accepts donations from corporations, foundations, and individuals to provide micro-grants to independent food and beverage businesses.

Dining bonds and gift cards are another route. The Dining Bonds campaign was started by a group of industry professionals to get immediate relief funds to restaurants. It works like a savings bond: guests purchase a bond at today’s value rate and can redeem it for full face value at a later date. Support Local lets you purchase restaurant gift cards from independent businesses in a number of cities. They can be redeemed now or, if you’re not feeling up for off-premises, later on, when dining rooms open again.

Initiatives like these aren’t a magic bullet. But they do provide some other avenues for supporting restaurants, whether you’re trying to avoid other people or just looking for a way to give a little extra help.

Running a Restaurant? We Want to Hear From You

If you’re reading this and also happen to be a restaurant owner, operator, or worker, help The Spoon help you. We’re currently collecting stories, tips, and ideas about what it’s like to actually live and work in the restaurant biz during this strange, unsettling time.

That includes anything from new strategies to make delivery and takeout more efficient to how you’re keeping yourself and your workers safe. And, this being The Spoon, any stories of how you’re using tech to help cope with this situation are most welcome. But before the tech comes the people, which is why your voice is the most important piece of our ongoing coverage and narrative.

Drop us a line a tips@thespoon.tech or DM me via Twitter.

It’s Almost Here: The COVID-19 Virtual Strategy Summit

If you’re a restaurant, food business, or food tech company, join us next week for a virtual summit on how to do business in the age of coronavirus.

On Monday, April 6 The Spoon will host the COVID-19 Virtual Strategy Summit for Food and Restaurants. No travel required to get there and 100 percent socially distant, this online summit will features talks and fireside chats from leading experts including:

  • Chef Mark Brand – Founder of Save-On Meats and creator of the Token Program to feed those in food insecure situations
  • Caesare Assad – CEO of FS6
  • Sara Roversi– Founder of the Future Food Institute
  • Dana Gunders – Executive Director of ReFED
  • Phil Lempert – the SuperMarket Guru
  • Paul Freedman – Professor of History at Yale University and author of American Cuisine: And How It Got That Way
  • Ryan Palmer – Partner at Lathrop GPM and chair of firm’s Restaurant, Food, and Hospitality group

Register today.

Keep on truckin’,

Jenn

Newsletter: As Food Gets Personal, What Happens to Our Data?

With Customize, The Spoon’s daylong NYC summit, just around the corner, we’re talking all things food personalization these days. And with personalization comes personal data, which you, me, and a growing number of consumers endlessly hand over these days to CPGs, grocery services, nutritionists, and, of course, restaurants.

I was reminded of the data portion of personalization earlier this week when I came across a new report from Technomic that noted just over half of U.S. consumers want to know more about how restaurants use their personal information. To be honest, I was surprised the exact number, 56 percent, wasn’t higher, though it probably will be by the end of this year.  

Restaurants now have a growing number of ways to find out more about their customers, and since food preferences aren’t the most high-stakes form of personal data, we’re more willing to part with that information. As one survey respondent noted, “The benefits of using technology to order/pay for food and beverages from restaurants outweigh the risks to my personal data.”

Still, as more kiosks land in the front of house and more brands implement AI to better understand their customers, proving themselves trustworthy with customer data is crucial. So what does that look like?

There are the obvious steps around safety, of course: staying PCI-compliant, vetting third-party vendors, etc. Those are all back-end policies and procedures consumers neither see nor probably care about unless something like a data breach occurs. 

What consumers do care about is getting a consistently good experience with a food or brand. I don’t just mean having an easy-to-use mobile app or quick drive-thru times. Restaurants must also be able to show customers that the personal data they hand over is what creates that consistently good experience. If a chain has my birthday stored in its system, it should automatically be able to offer some kind of reward (e.g., dessert) on that day. If a coffee chain already knows I can’t have sugary syrups in espresso drinks, its system should stop offering me those upsells when I order. Use the digital real estate to try selling me something I would actually buy, like a bagel.

Many restaurants, multi-national chains and indies alike, are already working to offer these kinds of experiences. Many more will follow as personalization becomes as common in restaurants as mobile apps have. Right now, however, it’s no sure bet your personal data is going to create your most optimal experience from one restaurant to the next, or even from one chain’s store to its next. Figuring out how to standardize some of these processes will be the next step in restaurant personalization. 

Can Customization Lead to More Food as Medicine?

Food customization and personalization are happening outside the restaurant, too. Some of it involves using your DNA to tell you exactly what foods you should be eating. 

My colleague Catherine Lamb explored that this week when she wrote about her experience with GenoPalate, a service that uses information gleaned from a user’s DNA to create a personalized nutrition plan for them.

As Catherine rightly points out, a tool like GenoPalate isn’t yet terribly useful to the average person, other than telling them to eat a healthy diet. However, for those who suffer from chronic illness or other issues, the service could offer an easier way for people to adjust their diets in order to live healthier, more comfortable lives.

I wonder about the food-as-medicine angle here. If GenoPalate can recommend certain foods and recipes for someone with, say major digestive issues, could a more personalized diet keep that person from having to heavily rely on over-the-counter pills and prescription meds. And to take things a step further, can personalization tech eventually help consumers make the needed behavioral changes necessary to eat better instead of simply swallowing another pill?

There’s tech that simply informs us and there’s tech that can actually help us alter our lifestyles for the better. When it comes to personalization, companies that can accomplish the latter will be the ones who stand out. 

Last Chance for Customize Tickets

Since we’re talking food personalization today, now’s the point when I shamelessly plug The Spoon’s NYC event next week. If you want to know more about how your DNA could create a better diet or simply when The Cheesecake Factory will start offering you a free birthday dessert, head up to Manhattan on February 27 to join us for the event.  Use code SPOON15 to get 15 percent off tickets.

Keep on truckin’,

Jenn

Newsletter: Consolidation Is Imminent for Food Delivery, Plus Customize is Coming to NYC

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If 2019 was the year restaurant food delivery companies went mainstream, 2020 is shaping up to be the year mergers and acquisitions whittle the competition among these third-party services down until just a couple companies emerge victorious.

Case in point: this week, Uber announced it is selling its Eats business in India to Zomato, a local rival that processes at least half a million more orders per day in that country than Eats does. Uber’s exit from the Indian market leaves just two major players: Zomato (which Uber will have a small stake in) and Swiggy, who also has access to deep pockets thanks to backing from investment firm Naspers.

And that news is just the latest in a series of announcements that all suggest acquisitions and mergers are the fuel pushing further consolidation worldwide in the crowded food delivery space. The ongoing bidding war over UK-based service Just Eat looks to finally be at an end, with Takeaway.com, who originally planned to acquire the company, coming out as the winner. The combined entity of Just Eat and Takeaway.com would form one of the largest food delivery companies in the world. In the States, Postmates has reportedly been exploring a sale instead of its planned IPO (which still hasn’t happened). A Wall Street Journal report from earlier this month said Grubhub had hired financial advisors to consider “strategic options including a possible sale” — though Grubhub denies the claim.

Uber’s motivation in the Zomato deal is in part all about cutting back on loss-making operations as the cash-burning business comes under increasing pressure to prove profitability over the next year. On that score, the company isn’t alone. Postmates shuttered its Mexico City operations in December. Deliveroo closed up shop in Germany last year. In 2018, Delivery Hero sold its German operations to Takeaway.com. And Uber itself ended its Eats business in South Korea last year.

Consider all that activity the tip of the proverbial iceberg. Most delivery companies are currently in the same boat as Uber, where investors are applying pressure to show the food delivery model can in fact be profitable and not just burn through money. So it’s safe to say that many services will continue shutting down or selling loss-heavy operations around the globe over the next several months and opening the door to further consolidation.  

At-home Indoor Farming Is Suddenly the New Black

There’s a new trend afoot in the connected kitchen: vertical farms built specifically for the home and meant to be used by your average consumer. 

Ever since CES, when major appliance-makers like LG and GE showed off flashy vertical farming concepts for the consumer kitchen of the future, here at The Spoon we’ve gotten a seemingly endless series of pitches and news announcements about this indoor-farm-to-table concept. The idea is simple: make an indoor farm that ranges anywhere between a flowerpot and a bookshelf in size, outfit it with accompanying technology that automates much of the actual work around growing the plants, and sell the product to consumers for, in most cases, under $1,000.

In the last several weeks alone, Rise Gardens, the Planty Cube, Miele, and many others have shown off products that hit these marks. But while there’s a lot of excitement (bordering on hype) around growing salad greens in your own kitchen, the still-nascent market hasn’t yet hit the point where the questions start to sprout up. Are these farms really as easy to use and automated as companies say? Can they actually save people money? Can individuals with a terrible track record when it comes to gardening (me) grow something that actually tastes good?

The next several months should provide some answers to these questions. 

Customize Is Almost Here!

That’s a wrap for this week. But before I go, here’s a quick reminder that we’re gearing up for Customize, our first NYC event. Personalization is changing everything from restaurants to grocery stores to our own kitchens, so join the Spoon team and our amazing group of speakers on February 27th! Just use the special Spoon subscriber discount code THESPOON15 for a 15% discount off of tickets. 

Keep growing,

Jenn


Newsletter: What Comes Next for Ghost Kitchens? Plus, Third-party Delivery and At-home Agtech

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I’m not gonna lie: putting together our market map on ghost kitchens was hard. The concept as we know it is relatively new, and the lines between the different categories of ghost kitchen might be easy enough to draw in a graphic but are never as solid in real life. For example, CloudKitchens provides kitchen space but it’s also a network of virtual restaurants. Starbucks runs its own kitchens but relies on Alibaba’s Heme supermarkets to provide the space. Grubhub, Uber Eats, and DoorDash deliver food but also operate in other areas of the stack.

That overlap, though, is a big part of what makes this area of the restaurant industry such an interesting one to watch. Not only is the 2019 ghost kitchen redefining the restaurant experience as we know it, it’s also redefining the way restaurants operate, the technology they use to do that, and even what their menus offer in any given area. Fat Brands, for example, uses Fatburger locations on the West Coast to also fulfill delivery-only orders for sister brands that would normally only be available to customers in the East. 

As we head into the next year, we can expect the overlap of companies and categories to increase as more multi-unit chains try their hand at ghost kitchens, more kitchen infrastructure providers try out their own virtual restaurants, and literal mobility (kitchens on wheels) becomes more commonplace. 

Head over to The Spoon for more predictions on what comes next for ghost kitchens (RIP POS?) and to download the map. And since this is such a nascent market that changes weekly, expect more iterations of this map to hit your inbox in the future.

Third-party delivery is staying put. Sort of.
It’s no secret that consumer appetite for delivery is driving the growth of off-premises orders. And while they may be controversial, third-party services like DoorDash and Postmates are a big part of this growth.

The biggest part, by some accounts. This week, CBRE Group noted in a new report that 70 percent of delivery orders will come from third parties by 2022. That’s a no-brainer. These services provide the tech infrastructure, logistics, and actual drivers that are often too expensive for restaurants to operate on their own. Third-party delivery may be expensive for restaurants and paddling through a sea of bad press lately, but it is in many ways necessary for businesses who want (need, actually) to offer off-premises ordering for customers. 

Like ghost kitchens, this is a messy, fast-changing market whose model will continue to evolve as restaurants adopt hybrid strategies and new laws are passed regulating how these companies do business.  

At-home vertical farms: Big convenience or big expense?
If you still prefer the old-fashioned method of actually cooking food for yourself, Miele’s latest news will be of some interest. As my colleague Chris Albrecht reported this week, the German appliance-maker known for everything from washing machines to coffee systems has acquired Agrilution, a Munich, Germany-based agtech startup known for its Plantcube indoor vertical farm. 

As Chris notes, the Plantcube looks like one of those at-home wine fridges, and like any vertical farm uses software to regulate temperature, climate, water levels, and nutrient delivery to crops. The system grows a variety of leafy greens and fits right inside your existing kitchen infrastructure. 

Question is, Do people want vertical farms built into their kitchens?

Potentially.

No, setting up a grow system in your home is not as convenient as buying a bag of kale from the store. For those so inclined, though, an at-home vertical farm like Agrilution’s means being able to pick fresh, better tasting ones right out of their own cabinetry. Those living in dense urban areas, where the fire escape is the closest thing to outdoor space, could have an actual at-home garden.

First, though, we have to get over the cost hurdle. Right now, price points of various at-home vertical farming systems go for anywhere between roughly $500 (Ponix Systems) and $3,000-plus (Miele). What we don’t have is abundant data on how much these farms cost consumers in terms of electricity, water, or repairs if the system breaks down. There is also the issue of space. Agrilution’s Plantcube may fit nicely into the under-counter space of a single-family home in Nashville. Your average New York apartment, on the other hand, would be hard-pressed to accommodate one.

Still, it’s a great sign that a major appliance-maker like Miele is showing interest in getting cabinet-to-table greens to more homes in the future.

Until next time,

Jenn

Newsletter: Personalization in a Tech-centric Food Era, Plus Food Tech Hacks for Your Thanksgiving Prep

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Customizing our food is a decades-old practice we’ve come to expect if not outright demand when it comes to the way we eat. Fast-casual chains like Chipotle and Sweetgreen are built on the idea of each person customizing a meal to their specific eating needs. Most of us will to some degree customize the traditional Thanksgiving spread tomorrow, using plant-based ingredients in place of meat or maybe even turning the whole meal into a bowl of ramen. Meanwhile, there are reportedly 87,000 ways to order a drink at Starbucks. Can our food and beverage consumption get any more customizable. 

Yes, actually, and largely thanks to tech. As we discuss often at The Spoon, apps and other tools powered by AI and machine learning, big data and analytics, as well as food science and research are making it possible to customize our food  right down to our DNA. That includes food not only at restaurants or holiday feasts, but also with our daily meals and snacks, our dietary needs and restrictions, and even our grocery shopping lists. 

Customizing and personalizing our food through tech, however, is a relatively new practice. While some standardization is beginning to occur — notably in the QSR drive-thru lane — this space is right now a pretty fragmented one, with many ideas and solutions but no clear idea yet as to how they come together to help us eat smarter and enjoy our food at the same time.

That’s why we created Customize, a one-day executive summit slated to take place on February 27 in NYC. During the one-day event, which will be held at WeWork’s 85 Broad St. space, The Spoon will examine topics from the world of food personalization, including microbiome-based nutrition, AI-powered grocery recommendations, new developments in CPG products, and much more.

We’re already got a great lineup of speakers to talk about the impact of personalization in the grocery store, at the restaurant table and in our own kitchens, and we’re adding more every week so make sure to check them out!

Want to learn more? Head over to The Spoon Publisher Mike Wolf’s post introducing the event, then grab tickets before they sell out (which they will).

Nutrition is one area where customization is going to be huge, and indeed is already showing up via apps and websites that help users determine the kinds of foods they should be eating and plan out meals and diets.

Trouble is, it’s one thing to download an app that promises to help you eat healthier. It’s another to actually take the time to track the food you’re eating and determine whether it has any actual nutritional value in your life (hey, iceberg lettuce).

That’s where companies like Foodvisor come in. As my colleague Chris Albrecht noted recently, the French nutritional coaching app startup lets users simply snap a picture of their food then, using computer vision and deep learning, the app analyzes it and auto-creates a nutritional report of the food. The company just raised $4.5 million in fresh funds, and it’s one of a growing number of food-tracking apps out there. Another notable example is Bite.ai’s app, which also offers consumers visual food tracking through their smartphones.

Getting consumers to actually change out unhealthy eating habits for smarter ones is, of course, a whole other mountain to tackle, and one we’ll be discussing more of at Customize. 

Last-Minute Food Tech Hacks for Thanksgiving

Of course you may have more immediate concerns around customization, like how in the heck you’re going to get dinner on the table on time and with every dish at the right temperatures.

Fear not. Chris put together this handy guide that highlights a few pieces of connected-kitchen gear that could make your cooking easier, some of which you can still grab before your Thanksgiving cooking commences.

Finally, if you are planning on going to CES and are looking to explore some food tech in Vegas, make sure to check our Food Tech Live event. If you want to showcase your product at FTL drop us a line, and if you want to attend you can request a ticket here.

Feast responsibly,

Jenn

Newsletter: Third-party Food Delivery Keeps on Fighting, But Its Opponent Is Getting Stronger

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It’s getting to be that time when us journalists haul out the predictions for the coming year. You can be sure we here at The Spoon will have plenty of those in the coming weeks. And you can be sure some of them will center around the how the food delivery model could change in the wake of the many controversies its currently mired in. Exorbitant commissions for restaurants, antitrust accusations, paying workers a wage they can’t live on — all this and more (did I mention plummeting stock?) underscores the same point: the third-party food delivery model is unsustainable, far from profitable, and larger swaths of the entire food industry are starting to push back. Hard.

Another log went on that fire last week when online grocery fulfillment platform Instacart cut bonuses for its Shoppers — that is, the folks getting groceries off the shelf and delivering them to customers’ houses. Oh, and it just so happened that this cut, which can reportedly account for up to 40 percent of some Shoppers’ earnings per order, came just days after said Shoppers instituted a protest over previous changes to their pay.

Instacart says the new pay cut is “not a form of retaliation.” Whether that’s completely true or not seems irrelevant. It’s a bad look for Instacart, who, along with DoorDash and Postmates, already came under fire earlier this year for its worker-tipping policy.

Then there’s the fight over AB 5, California’s so-called “gig worker bill,” which was signed into law recently and reclassifies gig workers as actual employees. Instacart is not in on that fight, but DoorDash, Uber, and Lyft are, and they’ve vowed to spend $90 million in 2020 to get a ballot measure passed that would counteract AB 5. Talk about a bad look.

Plus, even if these companies overturn the protections laid out in AB 5, they will still face an endless series of new bills, laws, and regulations that will undercut their core business model and further put the question of profitability in question. Meanwhile, investors are getting antsy, and restaurants themselves are starting to take pieces of the delivery chain, from branding to retaining customer data, back in-house, further eroding the reach of third-party delivery.

Instacart, DoorDash, Uber, and others can fight all they want, but their opponents are getting undeniably stronger. Grab your (delivered) popcorn and sit back. The battle is far from over.

Food Delivery Services Pile On New Features
One fighting tactic for food delivery services is far simpler than pledging tens of millions of dollars to fight legislation: pile on the features in the hopes of attracting more customers and restaurant partners.

This week, Deliveroo announced a pickup feature that lets customers order food via the app then collect it themselves, bypassing the delivery fee on the way. The move could appeal to more cost-conscious folks. Customers ordering food might not want to pay a $5 delivery fee for a restaurant that’s a three-minute walk away. And some restaurants could find the option appealing as it would allow them to work with these off-premise order platforms but pay them slightly lower commission fees.

Uber Eats also recently announced some discounts for its restaurant parters — specifically those who use the Ordermark system, which funnels delivery orders from different third-party channels into the restaurant’s main POS system. Ordermark restaurant customers who sign up to use Uber Eats through the Ordermark platform will receive discounted rates.

Eats is also selling ad space inside its platform to restaurants. “If we have all the restaurants on the marketplace and we give them tools to help them grow, then this will be a very efficient marketplace,” Uber told TechCrunch.

The Robots Are Coming (For Your Food Order)
In another likely scenario for the future, we won’t need a gig economy because the robots will do it all.

At least, they’ll be able to do an awful lot of peddling restaurant and grocery deliveries to customers’ apartments and houses. With delivery robots roving around college campuses, some cities, and now Russia, it’s possible — nay, inevitable — that delivery services will render the debate over human workers pointless by replacing said humans with these six-wheeled bots.

So too will autonomous vehicles. Amid far more controversial statements this week, Uber’s CEO Dara Khosrowshahi’s said autonomous ride-hailing is probably five to ten years off, and that there will be some autonomous driving going in just three to five years for simple tasks and routes.

Writing about the Uber news, my colleague Chris Albrecht points out that “food delivery certainly seems like it could fit the bill when it comes to simple tasks and routes” and that autonomous vehicles nix the cost of human drivers. But he also rightly notes that “this displacement of human labor brings up its own societal issues.” Which means robots and autonomous vehicles could potentially resolve some of the fight around the gig economy, but they’ll open up a fresh can of worms when it comes to the ethics of the food delivery model.