Close Ad

The Spoon

Daily news and analysis about the food tech revolution

food delivery

Instacart Enters Convenience Category, Now Delivers from 7-Eleven

Good news for those craving a Slurpee, but don’t want to leave their homes: Instacart announced today that it is now offering same-day delivery from national convenience store chain 7-Eleven.

The service is available from more than 750 7-Eleven stores in Texas, Florida, Maryland, Virginia and Washington D.C., with a national rollout to more than 7,000 stores to follow. Instacart will offer delivery of thousands of convenience store items including grocery, alcohol, over-the-counter meds and presumably a hot dog that’s been on hot rollers.

Customers in the current service area can start shopping from 7-Eleven today by visiting www.instacart.com/711 or using the Instacart mobile app. Just as with its grocery service, an Instacart Shopper will go to the store, pick out the order and deliver it. Deliveries can also be scheduled.

The COVID-19 pandemic has seen a surge of interest in Instacart’s delivery service. The company said that since March it has expanded with more than 130 retailers to add roughly 6,500 new stores to the Instacart platform.

This partnership with 7-Eleven is Instacart’s first foray into the convenience category, and in a way foreshadows the looming battles ahead as third party delivery services expand. DoorDash, another third-party delivery service, has made multiple moves into the convenience category throughout the year, including partnerships with Circle K, WaWa and… 7-Eleven. All of these efforts recently culminated with DoorDash opening up its own ghost convenience store chain in select cities.

If Instacart and DoorDash duking it out to bring you a Big Gulp doesn’t blur the lines enough for you, there’s the fact that DoorDash is now getting into grocery delivery. Uber Eats, another third-party delivery player is also starting to offer grocery delivery.

It’s understandable that we’re headed for a big delivery battle royale across multiple store categories. Restaurants, which were the bread and butter for services like DoorDash and Uber Eats, have been decimated by the pandemic. As a result, those services are on the hunt for new revenue opportunities, and with record amounts of e-commerce, grocery is a big juicy target.

While Instacart if firmly entrenched in the grocery space (Walmart recently added the company as a delivery partner), adding convenience stores can help broaden its defensive moat. Instacart doesn’t want to see DoorDash creep into more categories and have people get used to the idea of ordering more and different types of food delivery from them.

As these delivery services look to stake out more territory in their search for customers and revenue, we can expect to see similar category expansion announcements from all the delivery players in the coming months.

Woowa Bros. Launches Robot Food Delivery in Korea

Woowa Brothers, which owns the popular Baedal Minjok food delivery service in Korea, announced yesterday that it started using robots for delivery on public streets just outside of Seoul.

Woowa’s “Dilly Drive” robots will have a very limited run at first, only making deliveries to Gwanggyo Alley Way, a multipurpose housing complex in Gwanggyo, Suwon city.

The Dilly service can be used by any of the 1,100 residents of the housing complex, or the public at large. To place an order, customers use the Baemin mobile app and the robot will either arrive at the first floor of the Gwanggyo Alley Way, or to tables outfitted with special QR codes in the complex’s plaza.

The Dilly Drive robots sport six wheels, move at a speed between 4 – 5 kilometers per hour (roughly the speed of a person walking) and can carry roughly 6 lunch boxes. The self-driving Dilly Drives can detect and avoid objects, people, and pets, and the robots now come equipped with remote control, presumably so a human can take over should one get stuck or incapacitated.

According to the press release, this is the first public use of food delivery robots in Korea. Woowa had previously tested the Dilly robots at Konkuk University in a pilot program back in November 2019.

While this may be the first public use of delivery robots in Korea, chances are good that it won’t be the last. The global COVID-19 pandemic has sparked the acceleration of contactless methods of delivery. Robots like the Dilly Drive, as well as those from Starship and Kiwibot, remove at least one human from the delivery equation. Robots also bring the added benefits of being able to work long hours without a break and never getting sick.

With the launch of the Dilly Drive, I’m curious to see if Woowa Founder and CEO Kim Bong-Jin will follow up on an idea he had a couple years back. During a press interview back in July 2018, Bong-Jin expressed an interest in having robots not only deliver food but also take away recycling. As more people have ordered delivery during this pandemic quarantine, single-use plastics have become a bigger problem. If a delivery robot could drop off food in a recyclable/re-usable container and then pick it up on its next trip, that could really help put a dent in the waste created by restaurant delivery.

With DashMart, DoorDash is Creating its own Ghost Convenience Stores

DoorDash announced the launch of its new DashMart service today in a move that essentially has the delivery company creating its own ghost convenience store.

From a DoorDash blog post announcing the DashMart (emphasis theirs):

DashMart is a new type of convenience store, offering both household essentials and local restaurant favorites to our customers’ doorsteps. On DashMart, you’ll find thousands of convenience, grocery, and restaurant items, from ice cream and chips, to cough medicine and dog food, to spice rubs and packaged desserts from the local restaurants you love on DoorDash. DashMart stores are owned, operated, and curated by DoorDash.

DashMart is currently available in eight cities: Chicago, Minneapolis, Columbus, Cincinnati, Dallas, Salt Lake City, the greater Phoenix area, and Redwood City, CA. In the coming months, DashMarts will be coming to San Diego, Baltimore, Denver, Sacramento and Concord, CA.

I spoke with a DoorDash rep by phone today, who filled in a few more details. DashMarts are delivery-only, physical fulfillment centers that are stocked with big brand names (think: Snickers bars) as well as items from local restaurants (think: frozen slices of Cheesecake Factory cheesecake, or spices from local BBQ joints).

DoorDash has built out nine fulfillment centers, placed in locations where people don’t have easy access to a convenience store. Customers browsing the DoorDash app can select the DashMart and shop as they normally would.

That DoorDash is getting deeper into the convenience category isn’t a huge surprise. The company launched convenience store delivery in April of this year with WaWa, 7-Eleven, Circle K and more. In July, it expanded that program with a partnership with Walgreens.

Part of the reason for the expansion is pretty straightforward. The COVID pandemic shut down most of the restaurants across the country, accelerating the need for DoorDash to get into new markets. Convenience stores are a good fit for the DoorDash, which is all about fast delivery of smaller and/or last-minute items.

Today’s announcement brings more vertical integration into DoorDash’s convenience ambitions. DoorDash owns and operates these DashMarts, deciding which products gets stocked and controlling the whole endeavor from top to bottom. In addition to keeping all the revenue from sales through DashMart, DoorDash also gets more data around customers and purchases and can better optimize its own inventories.

Of course this isn’t the first ghost operation for DoorDash. In October of last year, the company opened up its first ghost kitchen facility in Redwood City, CA, which went on to house restaurant brands like Chick-Fil-A.

With the pandemic still running its course through the U.S., DoorDash’s delivery services will be in demand for the foreseeable future. So its not hard to imagine the company has plenty of time to build up a robust network of DashMarts in the coming year.

Minnow Raises $2.2M Seed Round for Contact-Free Delivery Pods

Minnow Technologies, which make IoT-enabled, contactless delivery lockers, announced today that it has raised a $2.2 million seed round led by Elevate Capital with participation from Portland See Fund and the venture capital arm of Lincoln Property Company. This brings the total amount of funding raised by Minnow to $3.4 million.

With the pandemic still raging across the country, contactless delivery is basically table stakes for food operators and consumers alike. Minnow’s pods are installed in high-traffic locations and allow food deliveries to be stored in specified cubbies and unlocked by customers using their mobile phones.

Minnow’s go-to market strategy (and company name) has evolved since its inception back in 2017. The company was first called Veebie and the food locker was meant to be mobile. When the company changed its name to Kadabra, it took the wheels off the locker, installing them in locations and added IoT capablities. When it re-branded as Minnow (and moved headquarters from Portland, Maine to Portland, Oregon), and officially launched in March of this year, it installed seven Minnow pods in office buildings in the Portland, Oregon area.

The COVID-19 pandemic, however, meant that office buildings weren’t exactly bustling any longer, so the company started looking at apartment and other multi-family residential buildings as installation locations. In today’s funding announcement, Minnow added that its pods were also available for ghost kitchens and other cafeterias (a la Brightloom) to act as a contactless intermediary between kitchen and delivery people or customers. Minnow even added UV lights to the interior of its cubbies to further help with sterilization.

Minnow is certainly raising money at the right time. With restaurants going back and forth between opening and closing, off-premises eating is the really the main way for them to stay afloat. Delivery cubbies like Minnow’s also have the added benefit of flexibility for the customer. Instead of having to be at the door when the delivery person comes, food can be dropped off in the insulated cubby and picked up when its most convenient (the Minnow FAQ says that the cubbies are designed to hold food for 90 minutes).

With its move into residential buildings, having Lincoln Property Company, which has buildings in 28 states, is a good investor to have. Even after the pandemic recedes (whenever that will be), people will still be getting food delivered, and having a special locker in your lobby will be a nice perk for residents.

Fare Launches ‘Ethical’ Delivery Service in NYC With Zero Commission Fees for Restaurants

Restaurant delivery service Fare, which calls itself “an ethical and fair alternative” to third-party delivery, today announced its official launch in NYC. The company’s number one claim to fame right now is that it charges restaurants zero commission fees on orders because of its more local approach to food delivery.

Fare works with local restaurants around NYC, curating a menu of available options for customers to choose from based on their neighborhood. Given that, customers get a much more limited number of options to pick from each day compared to, say, Grubhub or Uber Eats. The company claims to taste-test every single menu that goes onto its site. It also says, via its FAQs, that if a restaurant’s food quality starts to slip, Fare will remove their menus from its site.

The service differs from third-party delivery apps in that orders need to be placed in advance, usually on the day before, through the Fare website. There is no minimum for orders. Fare then groups orders together by neighborhood, block, or building, and the restaurant drops the order off at each customer’s door within a designated 1-hour timeframe. 

Having the restaurant drop the order off itself is how Fare gets around charging businesses commission fees — which, as we’ve documented ad nauseam, can be as high as 30 percent per transaction with the major third-party delivery services. To make money on orders, the company says it charges customers a small service fee.

Fare’s localized approach to delivery is definitely an attractive option for smaller restaurants that primarily serve customers in their immediate vicinity and may not have the money to ink a deal with Grubhub. For customers, it might not be as convenient as using a major third-party delivery service, since orders have to be placed ahead of time and food choices are limited. The real acid test will probably be the convenience factor, which seems to drive everything in the restaurant industry nowadays. Will consumers be willing to sacrifice some of the “on-demand” aspects of food delivery to get a cheaper meal and ensure restaurants aren’t getting gauged with commission fees? The jury, as they say, is still out.

Fare is currently operating in Manhattan, Brooklyn, and Queens. 

ezCater Lauches Relish to Reimagine Corporate Lunches

In case you hadn’t heard, the buffet as we know it is dead. That includes the catered office buffet. Now, as people head back to the office, companies need new ways to provide lunch that’s more sanitized, more socially distanced, and still quick and convenient for workers.

Online catering marketplace ezCater launched one such way this week. Relish, as the service is called, lets employees order from a selection of local restaurants then delivers all food directly to the office, according to a press release sent to The Spoon.

Using Relish, companies can choose which days of the week they want lunch catered to the office and set a budget for how much employees can spend. Relish then offers meal suggestions from local restaurants near the office. Employees can choose their food from the suggestions, and all meals arrive individually packaged to a central drop-off point in the office. 

Companies cover the delivery costs and can choose to subsidize some or all of the meals.

Like other areas of foodservice, office catering is undergoing a reinvention, thanks to the pandemic, and catering services are trying to become integral parts of companies’ return-to-work strategies. With more employees working from home for the foreseeable future, some brands, like Ox Verte and Slow Up, have created direct-to-consumer channels that deliver to employees home offices. Recently, too, Uber for Business launched its Vouchers program, which lets companies customize the types of meals they want to cater, whether it’s for a single employee working from home or a 1,000-person virtual event.

It’s too soon to tell which of the above strategies will prove most popular among corporate customers looking to subsidize employee lunches. Getting large numbers of people back to the office before there is a COVID-19 vaccine could prove challenging. The ability to pivot in this pandemic world is especially important for ezCater, which has raised roughly $320 million in funding. It’s tough to scale your corporate catering when corporations aren’t going into their offices.

On the flip side, once a vaccine is found and more people physically head back to work, the company could emerge as a leader thanks to its early start in redefining the concept of office lunches.  

Uber Eats’ New Vouchers Let You Buy Remote Lunches for Those on Your Virtual Sales Meeting

Uber for Business announced today the launch of Vouchers for Uber Eats, which lets businesses customize their meal plans for employees and customers to meet any scale, whether it’s an individual’s lunch or a 1,000-person virtual event. The program is an expansion of Uber’s corporate meal program, which launched earlier this year, according to a press release sent to The Spoon.

Uber fast-tracked the expansion of Uber Eats for corporate meals earlier this year, shortly after the pandemic forced shelter-in-place orders and many employees started working from home. That program allows companies to customize meal options for remote employees via the Uber Eats app. Through a dashboard, company admin can set rules around when their workers can order meals and how much they can spend.

Vouchers expands on this, allowing companies to get even more granular about how they manage corporate spending on meals. Today’s press release outlines a few uses for Vouchers, including providing meals for attendees of large-scale virtual events, treating potential clients to lunch at virtual sales meetings, and virtual lunch gatherings for remote employees.

Via the aforementioned dashboard, companies can set controls on the start and end dates of a voucher, set limits on the number of orders, as well as use existing features like ordering times and spending limits. 

They’re not the only third-party food delivery service to be eyeing the corporate catering space as a way of diversifying. DoorDash offers a similar program that includes corporate versions of the DashPass, the service’s monthly subscription service. Grubhub Corporate also offers individual and group orders for companies. 

For many, working from home is here to stay, even with states’ economies slowly reopening. That makes the concept of corporate food delivery a lucrative business to be in right now for these third-party services. And with the U.S. now officially in a recession, tools like Vouchers let companies spend as much or as little as they want to on corporate meals, allowing them to offer aspects of catering without expensive, long-term commitments.

This customizable approach to corporate catering could also be an important asset to offer long into the future. There’s no knowing yet how many workers will actually return to the office and whether traditional catering will even have a place in that setting. Scores of employees all hovering over the same buffet table doesn’t exactly sound appetizing in the sage of social distancing, and it’s possible companies won’t even have the in-person numbers to justify huge orders like they used to. A sliding-scale option with a focus on virtual get-togethers could become the norm going forward.

Amazon Launches a Restaurant Food Delivery Service in India

Amazon today announced the launch of its own restaurant food delivery service in India, according to TechCrunch. Dubbed Amazon Food, the service launched in select postal index codes of Bangalore before expanding to other cities in the future.

“Customers have been telling us for some time that they would like to order prepared meals on Amazon in addition to shopping for all other essentials,” an Amazon spokesperson said. The company will launch with a handful of restaurant and ghost kitchen partners from which customers can order meals.

Amazon’s starting a food delivery service in India was actually meant to happen in 2019 but got pushed to March of this year, just as the COVID-19 pandemic started to take the entire world in its grip. India’s nationwide stay-at-home order further delayed the Amazon Food service’s debut until now.

Amazon Food arrives in India at a time of upheaval for food delivery in that country. Uber Eats recently exited the Indian market, selling its business in that country to local delivery service Zomato for $206 million. But Zomato, along with its chief rival Swiggy, are currently struggling under the negative impact the pandemic has had on India. Both companies have cut jobs, and Swiggy is also scaling back its ghost kitchen division as a way to cut more costs and keep its operations “nimble.”

Amazon’s entry into the market could exasperate the challenges these local players already face. Even without a pandemic keeping India’s 1.3 billion people on lockdown, neither Swiggy nor Zomato is profitable yet — a common theme for third-party food delivery companies worldwide.

Amazon, meanwhile, has invested heavily into the Indian market and already operates Amazon Fresh and Amazon PrimeNow platforms in that country.  

India-based Food Delivery Service Swiggy to Cut 1,100 Jobs

Layoffs in the food delivery sector continue. Today, India-based service Swiggy said it will cut 1,100 jobs as coronavirus continues to negatively impact the on-demand food delivery sector (h/t TechCrunch). In an email to staff that was also posted to the company’s blog, Swiggy cofounder and CEO Sriharsha Majety confirmed that the the company is cutting jobs “across grades and functions in the cities and head office over the next few days”

The cuts are in response to the ongoing impact the COVID-19 pandemic has had on India’s food deliver sector as people are more wary of ordering food in for both health and financial concerns. Sources familiar with the matter told TechCrunch that Swiggy is processing less than 1 million orders per day now, compared to the almost 3 million it did before the pandemic. 

According to Majety’s email, all employees impacted by the cuts will receive at least three months of salary. They get an additional month for each year they have spent with Swiggy. The company will also provide medical and accident coverage through the end of the year.

This isn’t the the first time Swiggy has announced job cuts in recent months. At the end of April, Indian news outlet Entracker reported that the service was cutting staff and also scaling back its cloud kitchen division. TechCrunch’s sources indicate that while it’s unclear if these new layoffs are related to April’s announcement, they will happen mostly outside of Swiggy’s cloud kitchen operations.

The layoff announcement comes a little more than a month after Swiggy announced it had raised a $43 million as part of an ongoing Series I round of funding (the company has raised $1.42 billion in total).

Swiggy isn’t the only food delivery company laying off staffers in response to the COVID-19 pandemic. Just last week it was reported that Swiggy rival in India, Zomato, cut 13 percent of its workforce and was asking remaining employees to take a pay cut. Over in the UK, Deliveroo cut 15 percent of its staff at the end of April. And while Eats has been a bright spot for Uber, it too is scaling back and ceasing operations in eight different countries.

It’s unlikely that Swiggy’s will be the last layoff announcement to come from food delivery companies. The entire sector is going through tumult as restaurants close down altogether, local governments impose delivery fee caps, and shady business practices continue to come to light.

Yet at the same time, food delivery has never been more important. Even though some states are re-opening after shelter in place orders, experts are warning about a potential second wave of infections. Hopefully delivery business have learned these hard lessons and will be better prepared should we need them in another emergency.

Zomato Cuts 13 Percent of Its Workforce

Zomato, one of India’s largest third-party food delivery services, is cutting 13 percent of its workforce and requiring the rest of its employees to take a pay cut, according to the Economic Times. Not surprisingly, the moves are in response to the ongoing pandemic and its effect on the food delivery industry in that country. 

Those affected by the layoffs will receive their health benefits as well as half their salary for six months or until they find their next job. In June, the rest of the company will take a temporary pay cut to preserve as much cash as possible. The cuts are expected to be for at least six months.

In an email sent to staff, Zomato founder and CEO Deepinder Goyal wrote that the company is preparing for “things getting worse” in terms of COVID-19 and the simultaneous collapse of the restaurant industry as we know it. He noted that many restaurants in India have already shut down permanently. “I expect the number of restaurants to shrink by 25-40% over the next 6-12 months,” Goyal wrote.

Zomato’s news comes just after Swiggy, it’s chief rival in India, announced layoffs of its own, also in response to COVID-19. Swiggy cut about 1,000 jobs at the end of April, mostly in its ghost kitchen division. This came just weeks after it announced a $43 million Series I fundraise.

It’s not just India, either. Worldwide, third-party delivery services have been making cuts as business gets drastically and negatively impacted by the pandemic and country-wide lockdowns. Deliveroo cut 15 percent of its staff at the end of April. Uber has made layoffs that affect some Eats employees. The company also recently exited eight markets.

Zomato actually bought Uber’s Eats business in India for $206 million at the beginning of March, before the country went into lockdown. Goyal didn’t mention the deal in his letter, which was much more focused on outlining ways in which the company is going to save cash and prepare for things to get way worse before they get better. Seems like the rest of the food delivery industry should do the same.

It’s Now Easier to Send and Share Food Delivery via Uber Eats

Last-minute shoppers may find themselves in a bit of a bind with Mother’s Day this year. With large parts of the country still sheltering in place, getting to a store is complicated, and Amazon deliveries aren’t as reliably speedy as they used to be thanks to a huge uptick in demand. So if you haven’t gotten that gift yet, you better hop to it.

However! Uber Eats announced a feature today that could come to a procrastinator’s rescue. In a corporate blog post, the company said it was now making it easier to send and share food delivery with other people. You can send things like a Starbucks latte or a sweet treat to a friend (or, you know, your mom) and the recipient can track the order in real-time to know when it will arrive.

The new send feature arrives at a time when a recent survey from US Foods found that when it comes to food this Mother’s Day, 53 percent of moms said they want takeout or delivery from their favorite restaurant. Uber Eats’ send and share is global, so even if sheltering in place has you socially distant from your own mom (even around the world), you can still deliver a fun dining experience for her.

Although, Uber got a little less global this week. On Monday, we reported that Uber Eats is exiting the Czech Republic, Egypt, Honduras, Romania, Saudi Arabia, Uruguay, and Ukraine as of June 4. The company is culling markets where it doesn’t have a leadership position.

And in news that reminds us of the grim times we are in, TechCrunch reported today that Uber has plans to lay off 3,700 people or 14 percent of its workforce. According to an SEC filing, Uber said the layoffs were “in response to the economic challenges and uncertainty resulting from the COVID-19 pandemic and its impact on the company’s business.” Those cuts are coming from the recruiting and community operations.

An upgraded sharing feature won’t do much to move the needle on the Uber Eats’ lack of profitability. But it does make it easier to share some food and some kindness with others at a time when they might need it most.

Uber Eats Is Exiting Eight Markets

Uber Eats Is exiting the Czech Republic, Egypt, Honduras, Romania, Saudi Arabia, Uruguay, and Ukraine, according to a regulatory filing from today flagged by TechCrunch. The company’s ride-hailing business will not be affected.

The filing notes that, “These decisions were made as part of Uber’s ongoing strategy to be in first or second position in all Eats markets by leaning into investment in some countries while exiting others.” The company will “fully discontinue” operations in the above companies by June 4, 2020. 

Uber also announced, in the same filing, that it is transferring its Eats business in the United Arab Emirates to its wholly owned subsidiary Careem, which operates a ride-hailing business around the Middle East.  

The company will “look to reinvest these savings in priority markets where we expect a better return on investment.”

An Uber spokesperson told TechCrunch that the filings are not related to coronavirus. Rather, they are part of the company’s strategy to be in the first or second position in all of its markets. Earlier this year, the company sold its Eats business in India to local third-party delivery service Zomato. It exited the South Korean food delivery market last year.

Worldwide, the third-party food delivery sector is feeling the economic strain brought on by the COVID-19 pandemic, which has forced many restaurants to close and made some customers wary of ordering out. Hailed not so long ago as the lifeline for restaurants, delivery services are now struggling with the rest of the industry. Last week, Delivery Hero subsidiary Foodora exited the Canadian market. UK-based Deliveroo, which recently got much needed approval on its investment from Amazon, said last week it was cutting 15 percent of its staff.

Stateside, local governments are imposing mandatory caps on the commission fees third-party delivery services charge restaurants, a move that could further erode both the on-demand business model these companies rely on as well as any shot they might have at future profitability. Uber’s news today will not be the last we hear of delivery services leaving entire markets and restructuring their strategies moving forward.