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DoorDash

April 1, 2020

DoorDash Launches Convenience Store Delivery with 7-Eleven, Circle K, Wawa and More

DoorDash announced today that it is expanding its food delivery operations into the convenience store category. The delivery service has partnered with regional and national convenience stores such as 7-Eleven, Wawa, Casey’s General Store, and CircleK to drop off items like sodas, snacks and over-the-counter medicine at your door (with no human-to-human contact, of course).

DoorDash didn’t say specifically where in the U.S. its new convenience delivery is available, only that it added more than 1,800 stores to its platform. Where available, DoorDash users will see a “Convenience” icon or banner in the app. Upon clicking that banner, you can shop for the packaged goods you’d normally buy at a convenience store.

In a corporate blog post announcing the new service category, DoorDash’s Head of Grocery Partnerships, Mike Goldblatt, and Fuad Hannon, the company’s Head of New Business Verticals, wrote that DoorDash piloted the service earlier this year but has accelerated its official launch to accommodate needs “during a time when delivery and pickup are vital to consumers’ wellbeing and to the health of our local communities.” See also: global pandemic upending pretty much every aspect of our everyday lives and every previous business plan for startups.

DoorDash Convenience in action

Another good reason for DoorDash to expand its service categories is that its main clientele, the restaurant industry, is in the midst of an unprecedented collapse. Social distancing has forced the closure of restaurant dining rooms across the country. While some are pivoting to delivery only, the economics of restaurants relying on third-party delivery services like DoorDash remains to be seen.

Coincidentally, DoorDash’s announcement comes on the same day that Uber Eats announced it was expanding into more grocery delivery via convenience stores in France, Spain and Portugal.

Providing groceries via convenience stores make a lot of sense for third-party delivery services like DoorDash and Uber Eats. They can fulfill quick-hit food needs that aren’t full-on supermarket shopping trips. This not only allows for faster and therefore more deliveries (and more revenue), it also doesn’t turn delivery people into grocery shoppers wandering around a giant supermarket, hand-selecting produce, chips, etc.

Of course, at a time when delivery services grocery stores and through Instacart are being slammed with new users, having this type of quick hit delivery for small things could relieve some pressure and provide relief for those stuck at home.

The coronavirus outbreak is accelerating a lot of changes to food tech businesses. DoorDash’s expansion into convenience stores is just among the many we’ll be seeing as this pandemic continues.

March 27, 2020

Grocery Chains Hy-Vee, Woodman’s and More to Offer Free Delivery for the Elderly

The ability for folks over the age of 60 to get groceries is a big concern during this pandemic. Stores are creating special shopping hours for the elderly, I’m Instacarting my septuagenarian parents, and starting today, more than 2,000 grocery store locations across the country will offer free grocery delivery for those over 60 years old.

According to a press release emailed to us this morning, Hy-Vee, Woodmans, Kowalski’s Markets and “hundreds of independent grocers” such as Piggly Wiggly, LifeThyme Natural Market, Le District and Matherne’s will all be waiving delivery fees on orders fulfilled by DoorDash for those 60 and older.

DoorDash is leading the effort with participation from grocery solutions Freshop, GrocerKey, Mercato and Rosie. Customers will have the option of no-contact delivery. It’s not quite a blanket solution as there are some holes in coverage and some fine print, as outlined below. Here are the specifics from the press announcement:

  • Hy-Vee:  Starting March 31, Hy-Vee will offer free delivery to individuals who are 60 and older as well as expectant mothers and those who are considered high risk for illness in communities where Hy-Vee Aisles Online delivery orders are fulfilled by DoorDash. These customers will be able to use a designated promo code at checkout when they place their order through hy-vee.com/grocery. The promotion with Hy-Vee will cover up to 20,000 deliveries. 
  • GrocerKey: Partnering with market leading retailers throughout the U.S. and Canada, GrocerKey provides a full stack retailer branded eCommerce platform built for independent and regional grocery chains. GrocerKey also provides full service solutions, including in-store labor to pick and pack orders for fulfillment. In partnership with DoorDash, Kowalski’s, and Woodman’s, GrocerKey is extending free delivery to customers throughout Minnesota, Wisconsin, and Illinois (details below on how to receive free delivery).  

    Woodman’s: Log in to your account on ShopWoodmans.com. If you are a new customer, please create an account first and then start shopping. The discount will be available through May 1. 

    Kowalski’s: Log in to your Kowalski’s On The Go account. If you are a new customer, please create an account first and then start shopping. The discount will be available through May 1. 
  • Mercato: Mercato provides online ordering and same-day delivery from high-quality independent grocery and specialty food stores across the country. To sign up for unlimited free delivery from any one of Mercato’s 900+ participating stores until May 7, visit Mercato.com, input your delivery zip code, and choose products from any of the stores in your delivery area. During checkout, you can sign up for a free trial of the Mercato Green delivery membership program, input the promo code OVER60, and you will be prompted to put in your date of birth. When the delivery arrives, you will also need to show ID verification to the delivery driver. [Ed. Note: This does not seem like no-contact, come on, Mercato, relax.]
  • Rosie: Rosie is the preferred eCommerce partner to independent retailers such as Rosauers Supermarkets, Super 1 Foods, Macey’s, and Gourmet A’Fare and many more. Find a full list of stores here. To sign up for free delivery through May 7, head to Rosie and use promo code “DDFREE” at checkout for nearly 200 participating retailers.
  • Freshop: Freshop builds eCommerce platforms for over 2,000 of the nation’s leading grocers and specialty retailers including Foodtown, Fisher’s Foods, Brookhaven and Hays and is adding 300+ stores a week in support of COVID-19 efforts. DoorDash has enabled many Freshop stores to start offering delivery during these challenging times. Learn more at https://www.freshop.com.

Today’s free delivery announcement follows the announcement earlier this week from ridesharing company, Lyft that it would be providing meal deliveries to the elderly and school kids.

Hold on to these bright spots, the dark times aren’t over yet.

March 26, 2020

Report: Sales From Third-Party Delivery Apps Are Slowing. Might It Be Those Fees?

Despite dining rooms being closed and delivery being one of the few sales channels on which restaurants can rely, the numbers are down as far as third-party platforms like Grubhub and DoorDash are concerned. Data from Earnest Research shows that these platforms are “declining in growth,” according to an article today on Nation’s Restaurant News.

Earnest Research analyzes credit and debit card purchases. Its findings, which end with numbers from March 18, show that instead of ordering more restaurant delivery, consumers are instead spending their money on grocery store purchases.

From NRN:

Earnest Research recorded national restaurant spend down 17% year-over-year for the week ending March 18, specifically driven by declines in QSR (-12% YoY), fast-casual (-24% YoY), and casual dining (-34% YoY). Spend with delivery aggregators (how Earnest defines third-party marketplaces and delivery app services) decelerated to +11% YoY from mid-twenty percent growth year-to-date.

Brick-and-mortar grocery stores, on the other hand, saw a 79 percent year-over-year growth, while online grocery orders were up 66 percent year over year. “This suggests a shift in shopper behavior as customers are trying online grocery for the first time, increasing their frequency, or both,” the report notes.

You can hardly blame consumers for wanting to spend their money on grocery items that can stretch across multiple meals. I, too, had a recent experience that really underscored how expensive restaurant food delivery actually is. Over the weekend, I ordered a $20 pizza from a local place here in Nashville. The shop only delivers through Postmates, and between delivery fees, service fees, and a tip, I dropped about $38 for that pizza. (Part of that did go towards a larger-than-normal tip.) Fast-forward to yesterday when I swooped into a grocery store to pick up enough for a few meals plus a week’s worth’ of oat milk. The goods cost about $30 total.

Many more are probably making similar comparisons right now. More than 3 million people filed for unemployment benefits in the last week, and that number could rise. Federal Reserve Chairman Jerome Powell said today that we “may well be in a recession” and that economic activity will substantially decline from April to June.

All of which is to say, this isn’t exactly the climate in which to regularly cough up $10-plus in fees on delivery orders, which makes it not all that surprising that numbers are down for delivery platforms. 

It’s a bummer, to be sure. In an ideal world, everyone would have the funds to support local restaurants and regularly purchase delivery and takeout meals from them while COVID-19 has us all on lockdown. It’s unrealistic to expect the majority of Americans to do this, though.

Some restaurant chains have gotten hip to the issue of high delivery fees. Subway, McDonald’s, Del Taco, Chipotle, KFC, Taco Bell, and others have all announced free delivery promotions through some of their third-party partners. Still, even with waived fees, for most of us, our money goes a lot farther when we’re spending it at Publix.

Another week or two of lockdown should tell us if such deals are enough to reverse the declining numbers for third-party delivery platforms. With no seeming end in sight to either the pandemic or the economic roller coaster we’re currently on, more people willing to spend their bucks on delivery is far from guaranteed.

March 17, 2020

Uber Eats Waives Delivery Fees for Independent Restaurants

Uber Eats is waiving delivery fees for all orders coming from independent restaurants in the United States and Canada. The move is a response to the operational and financial strain restaurants are feeling as governments order statewide shutdowns of hospitality venues in the wake of the COVID-19 pandemic. 

Effective now, customers can find independent restaurants in the Uber Eats app by looking for the EAT LOCAL banner. Delivery fees will be automatically waived. This will help alleviate some of the financial strain restaurants are currently under as they are forced to close dining rooms and adopt or expand off-premises ordering. To further assist with monetary burdens, Uber Eats is also allowing restaurants to opt into daily payments, rather than billing weekly, as is normal.

All the major delivery companies now offer some form of relief to both independent restaurants and those driving/biking food to customers’ doorsteps. Grubhub/Seamless has suspended commission fees for these independent restaurants and set up a fund for drivers and couriers impacted by the COVID-19 pandemic. Postmates, too, has a fund for workers and will waive commission fees for new restaurants signing up with the platform in San Francisco. DoorDash just unveiled a boatload of initiatives for both its drivers and its restaurant partners.

Uber Eats will offer two weeks of pay to its drivers who test positive for COVID-19 and those who have to quarantine. The service has also said it is providing products with which they can sanitize equipment used to make deliveries. 

March 17, 2020

DoorDash Makes Moves to Help Workers and Restaurants Impacted by Coronavirus

Third-party delivery service DoorDash today announced a series of moves aimed at protecting workers and customers, and helping restaurants survive in the wake of coronavirus. In a letter sent to The Spoon today, CEO and cofounder Tony Xu outlined the steps his company has taken as more restaurants shutter their dining rooms and states mandate social distancing initiatives that include restaurant closures.

Xu noted that DoorDash has changed its app so that it automatically defaults to the contactless delivery option upon checkout to minimize person-to-person contact between drivers and customers. 

To better protect drivers, DoorDash is also shipping 1 million sets of free hand sanitizer and gloves to its drivers and couriers, as well as consulting with restaurants and health officials to improve safety around food preparation protocols. 

DoorDash is also providing financial assistance to DoorDash/Caviar drivers diagnosed with or quarantined because of COVID-19. The COVID-19 Financial Assistance Program means drivers in the U.S., Canada, and Australia can submit a claim and be eligible for up to two weeks of assistance. It’s an important offering from delivery companies at this time, as most drivers (and gig workers in general) do not get health benefits through their companies and do not qualify for paid sick leave. DoorDash’s program comes on the heels of announcements from Postmates and Grubhub, who last week set up their own financial assistance funds to assist drivers.

Relief funds have also been set up for restaurants, many of whom will suffer financially, and in some cases close permanently, because of mandated (and necessary) closures across the country.

Many major chains have already shuttered their dine-in service and switched to delivery and takeout models. That sounds straightforward enough for Starbucks or McDonald’s, but for smaller, independent restaurants, a switch to delivery is considerably more challenging, especially on the financial front. Delivery companies like DoorDash typically charge a commission fee for each transaction. Those costs — which have been and still are the subject of much controversy — can stretch as high as 30 percent per ticket, making delivery prohibitively expensive for small restaurants, whether or not there’s a pandemic unfolding.

DoorDash has addressed this issue. As of today, independent restaurants in the U.S. can sign up with DoorDash or Caviar and pay zero commission fees for 30 days, according to Xu’s letter. Currently, this option runs through the end of April.

Existing DoorDash partners will pay no commission fees on pickup orders, and Xu’s letter mentions “additional commission reductions for eligible merchants that are already on DoorDash,” though it doesn’t delve into specifics. DoorDash also said it is “earmarking up to $20 million” in merchant marketing programs for existing restaurant customers. 

Finally, the service is adding 100,000 independent restaurants to its DashPass subscription program for free. While we don’t have hard numbers yet, it’s highly possible more people will sign up for subscription memberships to delivery services as more cities require folks to stay home and people look for ways to cut costs on their delivery orders. So getting added to a platform like DashPass could provide a big boost in sales to smaller restaurants. 

DoorDash also said it is working with United Way Worldwide to delivery groceries to food-insecure households, senior citizens, low-income households, and persons with disabilities. For organizations that want to get involved with these efforts, DoorDash has set up an intake site where they can sign up.

March 13, 2020

Updated: Grubhub Defers Commission Fees From Independent Restaurants, Sets up Charity Fund

Update: According its terms and conditions, Grubhub’s “relief” program defers rather than waives restaurant fees. Restaurants that sign up for the program are required to pay back fees at the end of the relief period. While that has no solid date yet, Grubhub “anticipates that such date will be no later than March 29, 2020.” At that point, restaurants have four weeks to pay back those commissions. 

Grubhub announced this morning at a press conference in Chicago that it is setting up a charity fund and also temporarily suspending its collection of commission fees for qualified independent restaurants in the U.S. The initiative, which is a response to the COVID-19 pandemic now impacting daily life around the world, is in collaboration with mayors of large cities around the country, according to a press release emailed to The Spoon.

In the release, the delivery service noted that not collecting these commission fees will provide cash flow relief to independent restaurants, who along with bigger brands can expect to see as much as a 75 percent drop in sales because of the pandemic. More customers are choosing (or mandated) to stay home, which means significantly less foot traffic headed to restaurants. And some cities are putting restrictions on the restaurants themselves. In NYC businesses, for example, must reduce their capacity by 50 percent beginning today at 5 p.m. 

Bigger brands (think Chipotle, McDonald’s) have billion-plus-dollar digital businesses to fall back on in this scenario. For mom-and-pop restaurants as well as smaller chains, the slowdown due to coronavirus could be life-threatening to business.

More delivery orders would help, but as I wrote earlier today, third-party services like Grubhub and DoorDash collect per-transaction commission fees that can absolutely gut a business’s bottom line. Which is why it’s encouraging to see Grubhub stepping up and acknowledging the changes it needs to make during this time. Currently, the company is working with mayors of Chicago, New York City, San Francisco, Boston and Portland.

At the same press conference today, Grubhub also said it is setting up a fund that will let proceeds from its Donate for Change program go towards charities that support drivers and restaurants impacted by COVID-19. Through the program, customers can round up the change from each order and donate it. The service will match donations from its subscription service members.

Most of the major delivery services are now offering features like contactless delivery. Some, like Postmates, have set up their own funds to support workers affected by coronavirus. The hope is that others will follow with further measures to protect local businesses as well as the workers transporting our food.

March 11, 2020

Postmates Launches Funds for Drivers and Restaurant Partners Affected by COVID-19

Postmates is launching two new programs this week meant to assist the delivery service’s drivers and restaurant partners impacted by COVID-19, according to an announcement from the company.

The company has set up the Postmates Relief Fund, which will cover the cost of medical check ups for its driers and couriers regardless of whether they have been diagnosed or quarantined. As of right now, drivers who have made at least one delivery in the last two weeks in any of the following states will be eligible for a credit from the fund: Wash., Ore., Calif., Nev., Utah, Colo., Ariz., Texas, Neb., Wis., Ill., Ind., Fla., Ga., Tenn., N.C., D.C., Penn., N.Y., Maine, Mass., and N.J.  

In the same announcement, Postmates also noted it is launching a pilot program that will temporarily waive commission fees for new merchant partners operating small restaurants. The idea behind the move is to give these smaller businesses a boost at a time when foot traffic to restaurants is down due to COVID-19. According to the announcement, “This Small Business Relief Pilot will waive all commission fees for businesses that are not currently delivering on the platform and operate in the City of San Francisco, but want to expand into on-demand delivery to help drive revenue as on-premise dining is impacted.”

Postmates has said it will “potentially” take this program to other cities in the U.S. as well.

Both of these efforts come just days after we learned Postmates as well as Uber, DoorDash, and other gig economy companies are in talks to see how they can band together to set up a potential fund to assist drivers/couriers infected by or quarantined with the COVID-19 virus. 

Some of these services, including Postmates, have also taken measures like implementing contactless delivery features to limit face-to-face human interactions. DoorDash joined that list this week, saying on Monday it is testing features for contactless delivery that will be launched soon. Uber, meanwhile, said it will compensate drivers — for both rideshare and Eats services — who can’t work for 14 days because of coronavirus diagnosis or quarantine.

With cases of COVID-19 on the rise in the U.S. and more employees now being mandated to work from home, we’re likely to see further demand for food delivery in the coming weeks. Stay tuned . . . 

March 9, 2020

Uber, DoorDash and Others ‘In Talks’ to Compensate Drivers Affected By Coronavirus

Under pressure to offer more protection to workers, major gig economy companies are considering setting up a fund to compensate drivers affected by the coronavirus, according to The Wall Street Journal. Uber, Lyft, Instacart, DoorDash, and Postmates are “in talks” to see how they can come together to set up a fund to pay workers infected by or quarantined with the virus.

Food delivery drivers are in high demand right now as more Americans are working from home or simply staying away from restaurants in the wake of the COVID-19 outbreak. Postmates and Instacart have responded by implementing contactless delivery options where drivers simply leave food on the doorstep instead of handing it off directly to the customer.  

Those measures mitigate some risk. However, they don’t account for the fact that gig economy workers are classified as contractors in most states, which means they don’t get paid for time off, including sick leave. In some cases, taking time off for illness could drastically affect workers’ livelihoods. One worker told the WSJ that “staying home won’t pay the bills.”

That puts delivery drivers in a tough position: stay home and miss earning essential income, or work even when you’re feeling sick and potentially risk further spreading coronavirus. While this conundrum is true of many, many types of workers right now, gig workers are in especially high demand as more people order food in, rather than go out to restaurants. 

The aforementioned companies are expected to make a decision about this potential fund in a few days.  Uber has already said it will compensate up to 14 days for both rideshare drivers and delivery drivers diagnosed or quarantined with coronavirus.

Compensating affected drivers is just one of many issues around worker treatment for which delivery companies have come under fire recently. Uber, Lyft, and Postmates are on the list of gig economy companies currently fighting California’s Assembly Bill 5 — also known as the “gig worker bill” — which reclassifies those workers as employees and entitles them to certain benefits — including paid sick leave. DoorDash and Instacart famously made a lot of enemies in 2019 over their worker tipping policies. Meanwhile, advocacy groups like Gig Workers Rising and Gig Workers Collective are putting pressure on tech companies to enact better labor policies.

One possible result of the current outbreak is that it could prioritize the issue of gig workers’ rights and spur both regulators and tech companies into action faster. Coronavirus isn’t the last public health crisis we’ll see in our lifetimes. As gig economy jobs become the norm for a growing number of the population, ensuring better protection for workers’ health needs to be built right into the job description. 

March 2, 2020

Applebee’s Is Planning Ghost Kitchens for Delivery and Takeout Orders

Applebee’s just became the latest restaurant chain to hop the ghost kitchen bandwagon. In an interview with Nation’s Restaurant News, Steve Joyce, CEO of Applebee’s parent Dine Brands, said the company was “experimenting” with the concept.

To be honest, the development isn’t terribly surprising. At the end of 2019, we predicted that ghost kitchens would become “the norm” for larger restaurant chains, since they not only to help them fulfill more delivery orders but also to let them reach areas of the country where they might not have a brick-and-mortar presence. Chick-fil-A is a good example. The company has expanded its presence in Northern California — where it has few brick-and-mortar stores — by renting space in DoorDash’s Redwood City ghost kitchen facility. Doing so lets the chain reach a potentially wider audience without having to invest the time and money into building out full Chick-fil-A locations.

Dine Brands’ Joyce suggested his company is looking into a similar strategy for Applebee’s, telling NRN that he’s hoping to use ghost kitchens to increase Applebee’s presence in “underserved cities,” particularly those in the Midwest. He also said the company was looking into different kinds of ghost kitchens: operating its own as well as partnering with third-party kitchen providers. 

My crystal ball tells me Applebee’s probably will team up with DoorDash to realize at least some of its ghost kitchen ambitions. The chain already has a national delivery partnership with the service. Renting out space in DoorDash’s ghost kitchen facility could greatly expand Applebee’s presence in the California Peninsula area, where currently it only has a few locations.

As for the rest of the country, Applebee’s would have to partner with another provider. Kitchen United has open locations in Chicago, Southern California, and Phoenix, and has more facilities in the works. Zuul Kitchens is currently focused on the NYC area, as is Kitopi. 

Whether restaurants should be betting their entire off-premises strategies on VC-backed ghost kitchen facilities is a debate for another day (stay tuned). For its part, Applebee’s has said it is looking into a combination of ghost kitchen types, which means it isn’t going to rely solely on third-party providers. Glancing a moment into the longer-term future, that’s probably the smartest bet right now for big restaurant chains.

February 27, 2020

DoorDash Confidentially Files for IPO

Food delivery service DoorDash has confidentially filed to go public. TechCrunch reports that the company has filed a draft registration statement on form S-1 with the Securities and Exchange Commission, according to a press release from DoorDash. The company didn’t name a specific time for the IPO, noting only that its expected to take place “after the SEC completes its review process.”

DoorDash, which has raised $2.1 billion is valued at $13 billion, is currently the leader among third-party delivery services in terms of marketshare, having unseated Grubhub from the number one spot in 2019. The company operates in all 50 U.S. states as well as parts of Canada and Melbourne, Australia, and in October of last year, DoorDash accounted for 35 percent of consumer spend on third-party delivery.  

But will that lead be enough to sway the public market that DoorDash is a good buy? The Wall Street Journal reported last December that three-quarters of DoorDash’s markets weren’t profitable. While third-party delivery services are expected to gobble up 70 percent of all delivery orders by 2022, the entire third-party delivery services market is in the midst of an existential crisis.

Some of that crisis is self-inflicted as companies like DoorDash employed shady tactics when it came to paying its drivers. DoorDash is also among a group of gig economy companies spending $90 million to defeat California’s AB 5 law, which reclassifies contractors as employees. The entire third-party delivery model is built around cheap labor, and if more workplace regulations are enacted, then that could greatly impact the industry’s ability to make money.

But restaurants themselves are starting to question the value of third-party delivery services. In addition to tiring of the high fees for the pleasure of being on an app like DoorDash, more restaurants are realizing the value of owning the direct relationship with the customer, and not handing that over to someone else.

Then there is the whole issue of timing. DoorDash is setting to go public months after Postmates, another third-party delivery service, pulled its own IPO plans. And we are in a post WeWork debacle world, where numbers are more highly scrutinized than ever.

DoorDash going public is good news for us at The Spoon. It’s going to generate a ton of news to report and transparency into the third-party delivery world when it holds quarterly earnings.

Now we’ll just have to see if it’s going to be a good move for DoorDash, and other players in the space with similar ambitions.

February 26, 2020

Grubhub’s Subscription Program Is a Bid to Boost Customer Loyalty

Grubhub today announced the launch of Grubhub+, the food delivery service’s answer to a subscription service that offers members more rewards and free delivery on many orders, according to a company press release. 

A $9.99/month membership to Grubhub+ includes free unlimited delivery from restaurants participating in the new subscription service. (Grubhub hasn’t named specific ones yet.) A subscription also gets you unlimited 10 percent cashback deals, priority assistance when dealing with customer service, and dibs on exclusive perks and access to local events.

Grubhub+ is the company’s latest effort to win customers over with more rewards. Last year, the company launched the in-app feature Perks, which offers users more ways to earn loyalty points from restaurants via deals only available in the Grubhub app.     

Right now, anyone can sign up for a free 14-day trial of Grubhub+. And in what’s also a bid for customer loyalty — something of an elusive concept for third-party food delivery right now — Grubhub is also offering an extended 30-day trial to “diners participating in any other food delivery subscription program.” DoorDash, Uber Eats, and Postmates all offer subscription services. DoorDash even partnered with Chase bank recently to give certain cardholders subscriptions to the service, giving it access to a potentially even large pool of subscribers. 

There is no guarantee any of this will ensure customer loyalty for any third-party delivery service. Customers tend to chase deals, hopping from app to app in search of promotions, giveaways, and discount items. On that point, Grubhub isn’t slacking, as it grew its network of restaurants to 300,000 in the fourth quarter of 2019.

Some of those additions were controversial, though. Earlier this month, the company received widespread criticism for its practice of adding restaurants to its platform that have no formal agreement with the service. (DoorDash and Postmates do the same thing.) And that’s only one controversy of many the service has been at the center of in the last 12 months. So Grubhub might be doing all it can to have the most restaurants in the network, but it’s pissing owners and customers off in the process, which won’t exactly build loyalty.

But, as I said above, customers tend to chase deals, and if Grubhub can offer a better subscription package than its competitors, it could win more loyalty despite its many current controversies, present and future.

February 12, 2020

Rhode Island’s Proposed Bill Would Ban Delivery Services From Listing Non-Partnered Restaurants

Rhode Island legislators have introduced a bill that would ban the likes of Grubhub, DoorDash, and Postmates from listing non-partnered restaurants on their sites without prior written consent, according to Restaurant Dive.

The bill was scheduled for consideration on Tuesday evening. If passed into law, food delivery services would be fined a civil penalty of up to $1,000 each day they were not in compliance. Restaurants would also be able to bring legal action against the delivery service.

According to WPRI Eyewitness News, the bill came about when the Rhode Island Hospitality Association (RIHA) approached House Judiciary Committee Chairman Robert Craven for solutions to combat third-party delivery sites’ controversial practice of listing non-partnered restaurants without their knowledge or consent.

DoorDash, Postmates, and Grubhub all follow this practice, arguing that it helps local businesses attract more customers, and at a cheaper price point, since non-partnered restaurants don’t pay a commission fee for orders. 

To put it lightly, restaurants don’t necessarily see the practice as beneficial. The recent showdown between Grubhub and San Francisco restaurant Kin Khao resurfaced the point that restaurants’ reputations (and therefore, business) can suffer when a third-party site promises customers delivery and/or pickup orders the restaurant can’t actually fulfill. Case in point: Kin Khao is a Michelin-starred fine-dining restaurant. It’s food is meant to be experienced in the actual restaurant, not from a plastic takeout box. It was listed on Grubhub’s site without the owner’s knowledge or consent, and thanks to a technical mix up with another Grubhub restaurant, customers were led to believe Kin Khao would deliver.

That’s one example among many, and more restaurants are getting vocal about their feelings on the issue. “If we don’t know that the food is traveling 20 or 30 minutes out to a customer, we can’t prepare it accordingly,” one owner told WPRI. “If there’s a mistake made, we can’t rectify it. So for us, it’s about having control of the customer experience to make sure it’s of the quality and caliber that we want.”

The RIHA said it has received multiple complaints over the last year from Rhode Island restaurants that have been listed to third-party delivery sites without their knowledge or consent.

If the proposed ban goes into effect, other cities and states could follow with similar legislation, most likely major metropolises like San Francisco and New York, which are already cracking down on the Wild West tactics of third-party food delivery.

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