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Daily news and analysis about the food tech revolution

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Domino’s Expands GPS Tracking Tech Across U.S. Stores

Domino’s announced this week it will expand its GPS tracking technology to roughly a quarter of its U.S. stores by the end of 2019. The chain has been piloting this technology, dubbed Domino’s Tracker, in select locations throughout this year. According to a press release, Domino’s expects “a significant portion of stores” to use it in 2020.

For customers, the Domino’s Tracker offers a more precise time estimate of when their pie will arrive. After placing an order via the Domino’s app, they will be able to access an interactive map of their order and receive an estimated delivery time. Users can opt in to receive text message updates letting them know when their order is on the way, when it is two minutes away, and when it has arrived. 

Store managers, meanwhile, can view where drivers (Domino’s refers to them as “delivery experts”) are on the road. The idea is that by having more exact visibility into drivers’ locations, managers can better manage operational elements of the delivery process, such as route optimization and driver safety. 

GPS tracking technology isn’t new to the delivery world, and in fact, part of Domino’s motivation behind enhancing its own is to compete with third-party food delivery services like DoorDash and Uber Eats, who already have such capabilities in place. The move is one of many strategies Domino’s has in place to fight back against third-party delivery dominance.

That’s no small order in a restaurant industry where 70 percent of all delivery orders are expected to come from third-party delivery services by 2022.  Hence initiatives like the Domino’s Innovation Garage, a testing ground for new tech that opened in August, an e-bike program to speed up delivery in dense urban areas where cars are inefficient, and partnerships with location-tech companies to pinpoint hard-to-find street addresses. 

Earlier this year, Domino’s CEO Richard E. Allison noted that his company faces “headwinds related to aggressive activity from third-party delivery aggregators” and that he did not expect to see this change any time soon. He added the company will continue to invest in technology for the foreseeable future.

Domino’s GPS tracking technology is currently operating at stores in Phoenix, Houston, Salt Lake City, Miami, Las Vegas, Baltimore and Norfolk, Virginia.

Report: 70 Percent of Delivery Orders in 2022 Will Come From Third-party Services Like DoorDash

Restaurant food delivery from third-party services like DoorDash and Grubhub will account for 70 percent of all delivery orders by 2022, according to a new report from CBRE Group.

It’s a surprising prediction — said no one ever. CBRE’s new report, the third in the firm’s U.S. Food in Demand series, is one of many, many pieces of research confirming the central role third-party food delivery services now play in the restaurant industry. Off-premises ordering is expected to be the major driver of restaurant sales over the next decade. An undeniable part of that growth is delivery, which according to the CBRE report reached $34 billion in sales last year, up 13 percent from 2017.

DoorDash, Grubhub, and other third-party services remain an important — and obvious — element of this growth, and for good reasons. As CBRE points out, there are many elements of the delivery stack restaurants need to meet today’s demand, whether it’s technical logistics to process orders, marketing services to widen a brand’s audience, or couriers and drivers that place the actual food in customers’ hands. “Restaurants often lack the infrastructure for direct delivery and the customer reach that third-party delivery operators like Grubhub, Seamless, Eat24 and DoorDash provide,” the report notes.

However, these services are also expensive for restaurants to use. Controversial commission fees eat into restaurants’ overall profit margins, which are already thin. The third-party delivery model itself is also currently under fire from multiple angles — how it treats workers, what it does to the environment, and the increasingly important question of profitability. 

None of those issues mean third-party delivery services are going away any time soon. Instead, the model will evolve, so that by 2022 it will look substantially different from the one we use today.

Already, we are seeing clues as to what direction that shift will take. A growing number of restaurants are now adopting hybrid strategies, where customers place orders and pay for them through the restaurant’s own mobile app or website, which handles the technical logistics around processing and fulfilling that order. Third-party delivery companies, meanwhile, supply the last-mile logistics, including drivers and couriers. Some restaurants, notably Panera, work off an inverse version of this, with customers placing orders via the third party’s app and the restaurant handling that last mile itself. 

Both approaches have pluses and minuses. The general consensus is that the hybrid concept will continue to gain popularity over the next year, even as it too changes and evolves alongside the way third parties process, fulfill, and deliver our restaurant orders.

DoorDash, Impossible Foods Among the Fastest Growing Brands in the U.S. in 2019

Food tech companies have a major presence among the fastest growing brands in the U.S. in 2019, according to a new report from Morning Consult Brand Intelligence that ranks brands according to purchasing consideration among consumers. 

DoorDash took the number one spot for fastest growing brand in the U.S. this year, while Postmates clocked in at number three and Impossible at four. And those are just the top five. Among the top 20 fastest growing companies in the report, food and beverage companies nabbed 11 of the spots.  

According to the report, Morning Consult determines its rankings by which brands “have seen the biggest rise in purchasing consideration this year, how that is playing out across generations and which brands have seen a lift in brand identification, even if it didn’t translate to an increase in purchasing.”

Part of the reason for DoorDash’s top spot is no doubt its expansion strategy. Unlike Postmates or Grubhub and Uber Eats (the latter two also landed in the top 20), DoorDash has focused heavily on not just major metropolitan areas but also suburban areas across the country. It was the first third-party delivery service to become available in all 50 U.S. states and has over the last few years struck deals with major restaurant chains that cater to those areas. Think Chili’s, Outback Steakhouse, and Chick-fil-A. This is the second year in a row DoorDash — which to date has raised over $2 billion — has been ranked fastest growing brand in the U.S. for Morning Consult’s report.

The company was also, among food delivery companies in the report, the only brand to consistently rank at the top across generations, from Generation Z all the way up to Baby Boomers.

Even with high appeal among consumers, DoorDash faces multiple uphill battles going into 2020. The company is still getting backlash over its much-maligned former tipping policy, including recent charges brought by D.C. Attorney General Karl Racine. DoorDash is also one of a few companies that have pledged to fight California Assembly Bill 5, which reclassifies gig workers and in doing so turns the entire model by which third-party delivery services operate on its head — and further erodes the idea of these companies every becoming profitable. Appealing to consumers is a boost for DoorDash in 2019, but it’s appealing to investors that will make or break delivery companies in 2020.

Spoon Market Map: Ghost Kitchens in 2019

Just half a decade ago, the phrase “ghost kitchen” referred to restaurants that looked legit on Grubhub and Seamless but were actually digital fronts for unregulated kitchens. In other words, chicken tenders from what appeared to be a local restaurant might actually have been cooked in someone’s apartment.

Then the delivery boom went off, thanks largely to the growth of third-party services like Grubhub and DoorDash, and by the many digital channels through which customers could suddenly get food. Order tickets proliferated for restaurants, but so too did the stress around how to fulfill those orders without over-burdening the in-house kitchen staff.

The answer to the problem? Take the restaurant out of the kitchen.

In the last few years, restaurants have been moving many of their operations around delivery and to-go orders to dedicated kitchen spaces outside the main restaurant location. The name “ghost kitchen” has stuck around, but now it’s a health-department-friendly term for these spaces that act as hubs for off-premises orders.

But actually, there are many names nowadays for the concept: ghost kitchen, virtual kitchen, cloud kitchen, the (slightly nauseating) description “kitchen as a service.” All those phrases amount the same thing: a kitchen facility that exists solely for the purpose of helping restaurants cook and fulfill to-go orders and get them into the hands of delivery couriers. There is no dining room or front-of-house staff in a ghost kitchen, the tech-stack is more streamlined than that of a full-service restaurant, and, increasingly, the location is completely separate from a restaurant’s dine-in location(s). Now, too, there are also kitchens on (literal) wheels, which add yet-another piece of mobility to the business model. 

To help you navigate the evolving world of ghost kitchens, we’ve created a market map for your reference. This market map is intended to be a snapshot of the current ghost kitchen landscape in 2019. It’s not comprehensive, and we expect both it and the overall landscape to change drastically over the next 12 months. That means you can expect to see this map updated regularly. As always, we welcome suggestions for additional companies and players in this space.

Have suggestions? Drop us an email.

1. Kitchen Infrastructure Providers

The largest category in ghost kitchens right now, Kitchen Infrastructure Providers can be likened to cloud computing providers: they rent companies the space and tools needed to run a business, either as a flat-fee model for on a pay-as-you-go basis. 

Kitchen United, for example, charges a monthly membership fee that includes rent, equipment, storage, and services like dishwashing. Reef, which originally made a name for itself reinventing the concept of the parking garage, offers these things as well as direct partnerships with major third-party delivery companies like DoorDash and Postmates.   

Normally these facilities are large, warehouse-like buildings that hold multiple “restaurants” under a single roof. For large restaurant operators with multiple chains looking to fulfill extra demand brought on by delivery or test out new concepts without incurring too much risk, these are ideal.

Multi-unit chains can also use these spaces to reach customers in areas where they might not have a brick-and-mortar store. Chick-fil-A is widening its reach in the SF Bay Area by working out of DoorDash’s newly opened facility.

2. Restaurant-operated Kitchens

For some restaurants, running a ghost kitchen operation themselves makes more sense than teaming up with a third-party kitchen provider. This is often the case with smaller, independent restaurants, whose ghost kitchen might consist of nothing more than an area of the restaurant’s existing location(s) dedicated to fulfilling off-premises orders. Or it might apply to multi-unit chains who simply want to expand to new areas and don’t have the capital or inclination to deal with the burden of a full-service restaurant. Colombian chain Muy is one such company, having started as a dine-in restaurant before expanding its ghost kitchens to serve more areas of Latin America.

The most notable of all the companies in this category right now is Starbucks. In addition to building out “to-go” stores that exist solely for the purpose of fulfilling off-premises orders, the company has also partnered with Alibaba to turn parts of the latter’s Hema supermarkets into ghost kitchens in China.

The boundaries around this category are especially fluid. In other words, just because you operate your own ghost kitchen in one part of the country doesn’t mean you can’t team up with a third-party provider in another, as The Halal Guys and Chick-fil-A have done.

3. Virtual Restaurant Providers

This is where the lines really start to blur between restaurant, kitchen provider, and delivery company. Anyone can make a virtual restaurant, and as the category in our map shows, more than just restaurants are trying their hand at food concepts that can only be ordered through digital channels and are prepared in a ghost kitchen. Whole30, for example, is a diet concept better known for its cookbooks than its dealings with the restaurant industry. The folks behind that brand teamed up with Grubhub and restaurant company Lettuce Entertain You to create a virtual restaurant offering meals with Whole30-approved foods. 

On the other hand, a company like Keatz runs a network of virtual restaurants it houses beneath the roof of its own ghost kitchens. Taster, based out of France, creates native restaurant brands for food delivery companies like Uber Eats and Deliveroo. Food is cooked in Taster-run kitchens.

4. Mobile Kitchens

In slightly more its own category, companies like Ono Food Co. and Zume are creating robotic, self-contained kitchens on wheels that offer restaurant experiences that can be tailored to specific neighborhoods in a city and also plug into third-party delivery services.

Restaurants can also partner with these kitchens on wheels to expand their reach into new markets, as &Pizza has done by teaming up with Zume.

What’s Next for Ghost Kitchens

Ghost kitchens will become the norm for multi-unit chains. With off-premises orders expected to drive the majority of restaurant sales growth over the next decade, multi-unit brands (think Panera, Chipotle, etc.) will find ghost kitchens a cost-effective way to meet this demand without overburdening existing restaurants. The majority of them will rent space from kitchen infrastructure providers, as Chick-fil-A is currently doing with DoorDash. 

There will be an explosion of delivery-only brands. Since ghost kitchens provide a cheaper, faster way for food entrepreneurs and small restaurants alike to test-drive new concepts, we will see an influx of delivery- and pickup-only brands come out of these kitchens over the next year. Many will be born inside the walls of facilities like Kitchen United or CloudKitchens. Meanwhile, the number of virtual restaurant networks like that of Keatz will increase. 

Artificial Intelligence will be designed into the kitchen. AI is a really broad term that’s often misused. That fact aside, its presence in the restaurant industry is here to stay, and in ghost kitchens, it will prove itself valuable for everything from tracking ingredients to helping staff curb food waste. On the consumer end, we expect to see the technology more deeply integrated into the apps and websites from which customers order, improving recommendations and upselling opportunities.  

More non-restaurant food brands will launch virtual restaurants. In keeping with a trend recently made popular by Whole30 and Bon Apétit, food brands, diets, celebrity chefs, and other non-restaurant businesses will team up with third parties to launch delivery and pickup concepts. Grubhub and Uber Eats are two such third parties already doing this. Expect many more such partnerships — soon.

Bonus: The tech stack will get pared down. No front of house means no POS, right? Quite possibly. With less (or no) customer-facing technology like digital menu boards, self-order kiosks, and tabletop ordering, much of the restaurant tech on the market today becomes irrelevant in a ghost kitchen setting. As the folks at Reforming Retail noted recently, “under this scenario the POS is just an ordering node in the cloud that outputs your menu to a consumer and sends orders to your kitchen.”

That doesn’t mean restaurant tech is going by the wayside. Some ghost kitchens, like those of Muy, have a walkup option where customers order at kiosks onsite, and there will doubtless be new solutions created that are specifically for the ghost kitchen. But the tools of tomorrow’s ghost kitchen won’t look a thing like today’s bloated restaurant-management tech stack. For everyone involved, that’s a bonus.

Postmates Lays Off ‘Dozens’ of Employees, Shutters Mexico City Office

Food-delivery company Postmates — generally seen as one of the big four alongside DoorDash, Grubhub, and Uber Eats — has laid off dozens of employees and closed down its Mexico City office, according to an article published on CNBC.

Postmates has not said exactly how many layoffs it is doing, noting only in a statement to CNBC that “the number was at least several dozen and included people in the San Francisco headquarters as well as in Los Angeles, Nashville, Tennessee, and other offices.” The layoffs started this week, according to one CNBC source. According to another source from the same article, the company is in talks to find a potential buyer.

The news paints a drastically different version of Postmates from the one we were staring at just a few months ago, when the San Francisco-based service raised another $225 million, bumping its valuation up to $2.4 billion. The company also filed paperwork for an IPO earlier in 2019.

Since then, however, the market for both IPOs and food delivery services has taken a left turn to some darker place than anticipated at this time last year.

On the IPO front, disappointing debuts from Uber and Lyft, not to mention the ongoing WeWork meltdown, have altered investor sentiment. In other words, investors aren’t necessarily rushing to back companies with questionable profitability models.

Food delivery services in particular are getting more and more questions around not just their profitability (which doesn’t exist) but also their sustainability over the long term. Getting a latté delivered to your door might be convenient, but the process is increasingly fraught with tensions over how these companies handle commission fees for restaurants and treat their workers. Suffice to say, those tensions have called into question the current model for restaurant food delivery.

Postmates hasn’t been center stage for much of these debates. Instead, the service has kept busy in 2019 doing high-profile partnerships with Major League Baseball teams and national restaurant chains. In fact, just this morning, Postmates announced a major deal to start delivering TGI Friday’s in the U.S.

Nonetheless, the company is feeling the effects of the War on Food Delivery, as this week’s news makes clear. “We made the difficult decision to end operations in Mexico City as we focus on our continued growth in the U.S.,” Postmates said in a statement to CNBC. “We continually review our business to ensure that staffing is aligned with current business needs and have made small adjustments as a result.”

Week in Restaurants: Moe’s Goes Digital, Denny’s Adds Pay-at-the-Table Features

Some weeks are all about the incremental developments. Such has been the case over the last few days, with much of the news in the restaurant-tech space about chains adding new tools and features to their digital-focused operations. As the weekend sets in, here are a few more of those developments. 

Moe’s Southwest Grill Plans Digital-First Locations
Joining the growing number of restaurant chains experimenting with off-premises-focused store formats, Moe’s Southwest Grill announced this week it will launch its first-ever “all-digital/kiosk-only” locations in the first quarter of 2020, one in Pittsburgh, PA and the other in Charlottesville, VA. Each store will be equipped with four self-order kiosks and accept cash, Apple Pay, and, for, University of Pittsburgh students, university credit cards. Both locations will also offer limited in-house seating and one traditional cash register.

Denny’s Adds Pay-at-the-Table Feature
Denny’s, beloved pit stop of roadtrippers everywhere, plans to add tabletop devices in its restaurants that allow customers to pay for their meal, rather than having to wait for a server to run a credit card. The Spartanburg, S.C.-based chain has teamed up with restaurant tech company Presto, whose partners also include Applebee’s, Red Lobster, and Outback Steakhouse, among others. An initial deployment of Presto tablets at Denny’s is slated for 2020, and guests will be able to pay, complete feedback surveys, and access loyalty points on the devices. As of now, they will not be able to order food. 

Now You Can Reorder Your Favorite Chipotle Meal With Alexa
Chipotle added a little extra beef to its existing Alexa efforts this week by announcing a reorder skill for the device that functions just as it sounds. Customers download the Alexa app, enable the Chipotle skill, link up their Chipotle profile, and say something like “Alexa, tell Chipotle to reorder my favorite for delivery.” While a very incremental development in the world of restaurant tech, as voice-enabled technologies improve and become more integral to the order process, we’ll see more restaurant chains offering similar functions for repeat customers.

DoorDash May Go for a Direct Stock Listing Instead of an IPO
There have been plenty of rumors about DoorDash’s IPO, which we first heard rumblings about in August. But according to Bloomberg, DoorDash many now opt for a direct stock listing, which would allow it to enter the public markets without incurring the burden of investor pressures that go hand-in-hand with IPOs. This is an approach both Slack and Spotify took when they entered the public markets, and it’s one that lets companies save on bank fees. Whether this is the better approach for food delivery companies, who continue to struggle with the problem of becoming profitable businesses, remains to be seen.

D.C Attorney General Suing DoorDash Over Its Former Tipping Model

DoorDash and its tipping policies are at the center of controversy once again. This time, D.C. Attorney General Karl Racine has brought charges against the third-party restaurant delivery service, alleging that the company pocketed tips for workers and misled customers about where their tips went.

The company changed its much-maligned former tipping model earlier this year, but Racine is now seeking to recover millions of dollars in tip money DoorDash customers paid over the last couple years, calling the former model “deceptive.”

Here’s a quick recap:

Under the old tipping model, Dashers — that is, the folks driving/biking/walking DoorDash orders to customers — were guaranteed a minimum pay amount for each order they delivered. That minimum came not from an hourly wage but from a base fee paid by DoorDash then supplemented by workers’ tips. As the lawsuit alleges, “the only thing the consumer’s tip changed was DoorDash’s share of the worker’s pay. “

That lack of transparency for customers, who would have had to go through the fine print with an even finer-toothed comb to understand where their tip money was going, is a main point in the lawsuit:

“Any reasonable consumer would have expected that the ‘tip’ they added to the delivery charge through the DoorDash checkout screenflow would be provided to the Dasher on top of the payment promised by DoorDash for the delivery. But during the relevant time period, that was not the case.” 

A spokesperson for DoorDash responded to the lawsuit with the following: 

“We strongly disagree with and are disappointed by the action taken today. Transparency is of paramount importance, which is why we publicly disclosed how our previous pay model worked in communications specifically created for Dashers, consumers and the general public starting in 2017. We’ve also worked with an independent third party to verify that we have always paid 100% of tips to Dashers. We believe the assertions made in the complaint are without merit and we look forward to responding to them through the legal process.”

The lawsuit comes at a time when the debate around the ethics of the third-party delivery model has gotten louder, particularly when it comes to how workers are treated, paid, tipped, etc. The California Senate passed Assembly Bill 5 in September, which entitles gig workers like Dashers to minimum wage, workers comp, and other labor protections. DoorDash, Uber, and Lyft responded by pledging tens of millions of dollars to fight the legislation. 

Even if they succeed in overturning AB 5, these companies — and the business models to which they cling so tightly, will face more lawsuits, regulations, and legislation battles with time. And while bad press is one thing, the real danger for third-party delivery companies in all this is that legal and regulatory struggles could corrode that existing business model and undercut food delivery’s potential to be profitable (not that there is any profit at the moment).

Controversies haven’t yet gotten in the way of investment for DoorDash, which was valued at almost $13 billion in May of 2019 and recently raised another $250 million.

Chopt Is the Latest Restaurant Chain to Launch a Store Dedicated to Delivery and Pickup Orders

Chopt Creative Salad joins the growing number of restaurant chains building out brick-and-mortar stores completely dedicated to delivery and pickup orders. The fast-casual chain opened its first location for off-premises-only orders last week in Manhattan’s SoHo neighborhood. 

Customers of the Chopt SoHo store can order online or via the chain’s mobile app, bypassing the need to wait in line and interact with a cashier. Delivery orders are handled by the major third-party services (Grubhub, DoorDash, etc.), while the SoHo location will also feature self-order kiosks for those walking in off the street. Those kiosks will be able to accept cash in addition to cards — an important feature in an age where the debate over cashless payments is heated and chains like McDonald’s have come under fire recently for kiosks that won’t take good old-fashioned greenbacks. 

Chopt hasn’t said whether its delivery- and pickup-only store will provide a new model for future locations. CEO Nick Marsh told Forbes that, “It will be a significant part of our growth going forward, though we can’t give a percentage on how many of them will open.”

Chopt isn’t the only salad chain in NYC to be experimenting with off-premises order formats. In October, Just Salad teamed up with Grubhub to deliver a virtual restaurant brand called Health Tribes to NYC customers. Sweetgreen, who raised another $150 million in funding in September, has expanded its Outpost service, which entails placing pickup stations in office buildings. The chain also just opened its Sweetgreen 3.0 store, a so-called high-tech location that emphasizes self service and orders destined for outside the restaurant.

It all makes sense. Salad travels well — better than, say, french fries. But — and this is the understatement of the week — salad chains aren’t alone in embracing this off-premises store model designed to fulfill more delivery and pickup orders. Chick-fil-A has operated off-premises stores since 2018 and just announced it’s also working out of DoorDash’s new ghost kitchen in Northern California. Starbucks has a to-go-only store in China and one planned for NYC. Masses of other chains following this trend is pretty much a foregone conclusion.

In a place like NYC (or San Francisco, for that matter), the model allows restaurants to utilize smaller spaces and cut down on the amount of rent they pay to be in business. And as demand for delivery increases along with the expectation for online ordering and self-service technologies, this to-go concept will become a de facto part of most major chains’ strategies.

Chick-fil-A Begins Delivery Operation Out of DoorDash Ghost Kitchen Facility

Chick-fil-A is now expanding its presence in the SF Bay Area via a ghost kitchen. The Atlanta-based chain started operating a delivery-only concept this month using DoorDash’s newly opened ghost kitchen facility, according to Nation’s Restaurant News. As of now, the full Chick-fil-A menu is available for delivery during Chick-fil-A hours from DoorDash Kitchens.

This isn’t Chick-fil-A’s first foray into ghost kitchens, as the chain already rents space from Kitchen United’s Chicago location.

DoorDash opened DoorDash Kitchens in October of this year. The facility offers kitchen space to restaurants wanting to fulfill more off-premises orders without having to actually open a full restaurant. Chick-fil-A joins The Halal Guys, Nation’s Giant Hamburgers, Rooster & Rice, Humphry Slocombe as participating restaurants.

The Redwood City location, which will be the first of multiple DoorDash Kitchens facilities, serves multiple cities around the Peninsula, including Menlo Park, Palo Alto, and Woodside, among others, so Chick-fil-A will be able to expand the small presence it already has in the Bay Area. Currently, the chain operates brick-and-mortar locations in San Jose and Sunnyvale.

Teaming up with DoorDash for a ghost kitchen operation is just one of many initiatives on Chick-fil-A’s part to boost off-premises orders around the country. The chain tested a meal kit program in 2018, where customers could try to recreate the Chick-fil-A experience at home. Shortly after, Chick-fil-A partnered with DoorDash for a much more traditional form of delivery across the U.S. Since then, the company has also introduced dine-in mobile ordering for customers, who can grab a seat at select brick-and-mortar locations and order from their phone without having to get in line. Chick-fil-A also operates a couple takeout-only brick-and-mortar locations where customers can order ahead via mobile app or get food at the pickup window. Besides a few lone tables outside, there is no dining room.

And with no dining room quickly becoming one of the new norms for restaurants everywhere, Chick-fil-A is wise to expand its off-premises strategy to include more ghost kitchens. Doubtless we’ll see it along with other national chains expand into other major cities in the near future.

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.

We’ve Seen the Restaurant of the Future. It Doesn’t Look Like a Restaurant

What will the typical American restaurant look like in 2030? Ask the National Restaurant Association, whose new report, “Restaurant Industry 2030” serves up some answers to that question.

Many answers, actually. The 80-page report gives us an in-depth look at everything from how the restaurant workforce will change to technologies that will become commonplace in daily operations, many of which we already see quite a bit of in 2019: self-order kiosks, dedicated areas for pickup orders, and digital drive-thru signage, for example.

Overall, restaurant sales are expected to reach $863 billion in 2019 and grow to $1.2 trillion in 2030, according to the report. The major driver of that growth will be off-premises ordering — delivery, takeout, drive-thru, and other mobile-centric experiences. That will, as the report states, change the definition of the word “restaurant”:

Some restaurants will morph into a hybrid model, offering counter service, full service, takeout and delivery, and meal kits. The delivery-only restaurant is on the rise through virtual restaurants and ‘ghost kitchens.’ New food halls feature retail and restaurant pairings to make it easy for people both to eat and to shop for food they can take home.

All of these things underscore the influence off-premises orders are having on restaurant business models. As the report states, “the shift affects everything from restaurant design to marketingtech investment, operations, and site selection.”

Take ghost kitchens as a prime example. Not so long ago, the idea of having a restaurant without a dining room for anything other than concession-type food was unheard of. Now, restaurants are not only using them to fulfill the influx of delivery orders, they are also testing out brand-new menus and, in the case of multi-brand companies, using the ghost kitchen concept to cross-promote and sell sister brands.

Third-party delivery companies, in particular, are capitalizing on the craze for ghost kitchens, with DoorDash opening its own facility in Northern California and Uber Eats and Grubhub teaming up with non-restaurant food brands to launch virtual concepts.

New business models aside, though, Grubhub et al. face a far more ominous prospect over the next decade: increased regulation of third-party delivery. The National Restaurant Association’s report notes that the restaurant of 2030 will see many a government mandate over the next decade around employees, the environment, and food service-related taxes. But the big one to stand out is the increased regulations for third-party delivery operators.

The debate over stricter regulations for third-party delivery is already in full swing. Earlier in 2019, Grubhub, Uber Eats, and indeed the entire sector came under fire when an oversight hearing was held in New York City that called into question the high commission fees these services charge restaurants. Since then, it’s been one headline after the next proclaiming antitrust issues, biased fee structures for restaurants, caps on delivery fees, ethically questionable tipping policies, and so much more.

The shift towards more regulations is already in place, most notably with California’s Assembly Bill 5, which reclassifies gig workers as employees and was signed into law in September. Third-party delivery companies are fighting AB 5, but even if they succeed, there will be virtually no end to new bills, laws, and other regulatory matters to fight over the next decade. Between that and the constant struggle for profitability for these companies, it’s safe to say the third-party delivery sector of 2030 will be markedly different from the one we know today. Which is to say, the very elements changing today’s food landscape will undergo there own change on the road to 2030.

DoorDash’s New Carousel Shows Off All the Impossible Foods Offerings in Your Area

As of yesterday, DoorDash has created a custom carousel featuring restaurants that offer Impossible Foods menu items.

When consumers click on the Impossible filter on the DoorDash site, they’re taken to a separate page which shows only establishments offering delivery of the plant-based meat within their area. So far, the feature is available in 23 cities, including San Francisco, Los Angeles, Chicago, and New York.

I’m currently visiting a friend in New York, so I decided to give the Impossible filter a spin for myself. After putting in her address and clicking on the ‘See All’ Impossible button, I was taken to a new page listing 7 restaurants which sold Impossible items. These ranged from fast-food, like Burger King and White Castle, to more high-end local restaurants.

This Impossible filter is DoorDash’s first carousel featuring a specific plant-based meat brand. It’s clearly a bid by the food delivery company to capitalize on an item with a growing delivery presence. According to a press release sent to The Spoon, DoorDash customer searches for ‘Impossible burger’ have tripled since January of this year alone.

Why the Impossible burger and not, say, the Beyond burger? I’m guessing because Impossible just has a bigger restaurant footprint right now, what with its partnerships with fast-food chains like Burger King. In fact, DoorDash isn’t the only one to see a spike in orders for the bleeding plant-based burger. Back in July of this year Grubhub released a report showing that orders for the Impossible burger rose 82 percent in 2019.

The Impossible filter comes at a time when DoorDash needs to do whatever it can to stand out in the cutthroat food delivery space. DoorDash stole the title for the number one U.S. food delivery company from Grubhub in June of this year, and currently holds 35 percent of the market share. In order to hang onto that lead, the company is smart to experiment with ways to expand their offerings and attract more consumers. From ghost kitchens to filters featuring popular plant-based burgers, DoorDash has shown that they’re not afraid to experiment to keep their hold on the food delivery crown.

If you live in one of the aforementioned participating cities, you can order menu items featured in the Impossible carousel with $0 delivery fees from now until November 7th.