A recent CNN Money headline read “Why Uber Eats and GrubHub partnerships are risky for restaurants.” The post lays out reasons for caution, including squeezing already tight restaurant margins with third-party delivery fees and increased chances of poor customer experiences with your brand (think: late delivery of lukewarm food).
The siren song of these alluring delivery services is enticing, especially considering the large audiences companies like Uber Eats and Grubhub have. In the fourth quarter of last year, GrubHub alone had 14.5 million “active diners” (a 77 percent year-over-year increase). And in the cutthroat world of the restaurant biz, you have to go where the customers are.
Ontray, a small Philadelphia-based startup, doesn’t want eateries to abandon services like GrubHub and Uber Eats. But it does return some of the power (and the purse) back to individual restaurants.
It does this with a SaaS-based tool that makes it easy for smaller restaurants to create their own websites, complete with online ordering and delivery capabilities. There’s no upfront cost for the restaurant; Ontray only charges a 5 percent commission on sales, which the restaurant can assume or charge to its customers.
Armed with their own site, restaurants can better claim their own SEO, and they aren’t driving repeat customers to an aggregator like GrubHub. If forced to go to a service like Uber Eats, a customer could be distracted by a different restaurant listed or even nudged into a restaurant owned by Uber.
Ontray Founder and CEO, Tyler Wiest, considers his company complimentary to delivery services. He thinks restaurants should take advantage of the big audiences GrubHub and Uber Eats provide, but those services should serve as springboards. Wiest suggests that when restaurants fulfill those outside delivery orders, they should include a coupon offering 10 percent off the next meal if it’s ordered directly through the restaurant’s site. In other words, a third party like GrubHub should become more of a marketing arm for a restaurant rather than an ongoing driver of business.
To broaden its reach, Ontray also partners with smaller, regional delivery services like Chow Caddie just outside of LA, and Catskills Delivery outside of NYC. These local services can do the leg work of reaching out and bringing neighborhood restaurants onto the Ontray platform.
While this moves Ontray in the right direction, Wiest’s company still faces competition from a number of bigger players like Olo, LevelUp and MonkeyMedia–all of whom offer tools to get restaurants online. Additionally, while Ontray-created sites are mobile friendly, they don’t yet offer restaurants the ability to create their own mobile apps.
While it’s great that Ontray wants to even the playing field for the little guy, targeting small businesses makes it more difficult for the startup to scale. The company isn’t venture backed as of yet, and Wiest, the only employee, has had to manage both the technical and business development side of his startup, which can put a strain on both.
Wiest remains undaunted, however. In an email he told me, “Ontray is primarily using online ordering to gain a foothold in both the restaurant and delivery industries. Using this foothold allows us to build an ecosystem facilitating interactions between not only restaurant and delivery providers but also marketing agencies, reservation application, ticket management / POS systems etc..” He sees Ontray becoming the glue that brings together any system the restaurant wants to use to facilitate order and delivery.
Until then, however, restaurants looking to get online can give Ontray a try. Since there’s no upfront cost, that relationship probably isn’t terribly risky.