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Daily news and analysis about the food tech revolution

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DoorDash Now Holds 35 Percent of Consumer Spend in Third-Party Delivery

DoorDash’s growth continues outpacing its competitors in the third-party delivery space, according to a new report. This week Edison Trends released data on the third-party delivery market that shows DoorDash leads the competition with 35 percent market share of consumer spend, followed by Uber Eats (25 percent) and Grubhub (23 percent).

The lead DoorDash currently enjoys is not surprise, as it’s been a big year for the San Francisco-based service. The company now offers delivery in all 50 U.S. states and was the first to do so. Its $410 million acquisition of Caviar in August gave the service an even wider reach, and over the last 12 months DoorDash has been scoring deals a plenty with major restaurant chains as well as expanding service to other continents.

Right now, DoorDash’s lead is a small one, though. As Edison points out, the company shared “approximately the same market share of consumer spend” with Grubhub and Uber Eats at the beginning of 2019, so a small lead now doesn’t necessarily mean total dominance for the foreseeable future. All of these companies are still looking for ways to boost user loyalty to their specific platforms, not to mention reach some level of profitability.

What’s interesting about DoorDash is that, as a service, it doesn’t tend to dabble in many initiatives outside of partnering with restaurants and acquiring companies that will help deliver food faster. By contrast, Uber Eats seems forever unrolling new features on and off its app, and Grubhub is of late fixed on launching digital-only concept restaurants. Postmates, meanwhile, appears to be turning its attention to large-scale venues like baseball stadiums.

It’s possible part of DoorDash’s lead is due to its simpler-is-better approach, which focuses primarily (though not exclusively) on expanding service and increasing restaurant choice. Whether this is the winning strategy remains anything but certain.

Grubhub and Just Salad Partner for a Digital-Only Concept Restaurant

Grubhub just added another virtual restaurant concept to what’s quickly becoming a string of them for the third-party delivery service. Today, the company announced a partnership with NYC-based fast-casual chain Just Salad to launch a virtual restaurant called Health Tribes. Starting today, the Health Tribes menu is available exclusively for delivery and pickup orders placed via Grubhub or Just Salad apps and websites, according to a press release sent to The Spoon.

The overall concept of Health Tribes is around today’s most popular diet plans such as vegan, gluten-free, Paleo, and Keto. The virtual restaurant claims it will help customers more easily find delivery meals that meet those specific criteria eating needs and/or preferences.

It’s not clear in the press release if the meals will be made onsite at Just Salad locations or if Grubhub will use ghost kitchens for production, as it’s done with other virtual restaurants.

Health Tribes isn’t the first nutrition-focused delivery-only concept for Grubhub. The company teamed up with the Whole30 brand and restaurant company Lettuce Entertain You in August to launch a delivery-only restaurant based on the Whole30 diet. In the case of that “restaurant,” all food is made in a ghost kitchen run by Lettuce Entertain You.

Ditto for Grubhub’s other virtual restaurant concept, which it also runs in partnership with Lettuce Entertain You along with magazine-turned-digital food brand Bon Appétit. Bon Appétit Delivered, as it’s called, offers gourmet meals created by the folks at the Bon Appétit Test Kitchen.

Both that and the Whole30 concept are currently only available in Chicago. The Just Salad collab will be more widely available, as the chain has over 50 locations throughout Chicago, NYC, Philadelphia, and other cities.

Health Tribes more or less confirms the idea that these digital-only concept restaurants are going to become a regular staple of Grubhub’s offerings. With ghost kitchens becoming more commonplace in the food world, third-party delivery services need to find new ways to differentiate themselves. Grubhub isn’t the only service trying ghost kitchen restaurants: Both Uber Eats and Deliveroo are testing out concepts as well. Where Grubhub stands apart slightly is with its focus on building virtual restaurants around specific diets and with food brands that aren’t necessarily restaurants. Expect that to be something we’ll see much more of from Grubhub in future.

Uber to Merge Its Rideshare and Eats Apps, Partners With Rachel Ray for a Ghost Kitchen

At its event yesterday in San Francisco, Uber unleashed a slew of announcements and updates to its app, including merging Uber Eats into its main rideshare app, expanding its rewards program, and several other improvements geared towards bolstering the presence of Uber Eats in customers’ everyday lives.

Of all the food-centric news to come out of the event, what’s most interesting to us over here at The Spoon is Uber’s continued focus on ghost kitchens. The company announced yesterday it has teamed up with Rachel Ray to open a virtual restaurant whose menu will only be available on Uber Eats.

A blog post from Uber offered some details, though not a ton. The limited-time “restaurant” will run for 10 weeks in 10 cities and be timed with the launch of Ray’s new cookbook. Uber didn’t specify which cities and exactly when the launch will happen, but presumably the food will be cooked in one of the company’s growing number of ghost kitchens and delivered out to customers in a nearby radius.

The initiative highlights a new trend we’re seeing more of in ghost kitchens, which is using them to launch non-restaurant concepts that would be prohibitively expensive to test out in a traditional brick-and-mortar setting. Uber isn’t alone in this new arena: Grubhub has already launched two such initiatives, including a partnership with food publication Bon Appétit, which was announced earlier this week. Partnerships with big-name chefs seem a logical next step, and while the Uber-Rachel Ray deal is for a very limited time, it’s likely the first in what will be a long string of similar partnerships in future.

Rachel Ray wasn’t the only deal announced at the event yesterday. Uber Eats also unveiled an exclusive food delivery partnership with fast-casual chain Sweetgreen. Interestingly, the announcement comes the same week Sweetgreen closed a $150 million funding round and said it will launch its own in-house delivery service.

Uber made multiple other announcements yesterday that will affect Eats, including the news that it will merge its food delivery app into its main ride-hailing app. This “next generation of the Uber app,” as the company called it in a blog post, is currently testing two different versions of this new interface in “hundreds of U.S. and international cities.”

The company also highlighted allergy-friendly filters, which will let Eats customers communicate more effectively with restaurants about their dietary restrictions, and its forthcoming plans to make extras like cutlery and straws available only upon request.

With growth of its ride-hailing service stalling, including less-than-stellar earnings reports from Q2, it makes sense Uber is continuing to focus on its Eats business, though that business has yet to become profitable, either, and, as Uber CEO Dara Khosrowshahi noted on the Q2 earnings call, won’t be for some time. Whether celebrity chefs and allergy filters can actually make any real progress towards changing that remains doubtful.

Magazine-Turned-Food Brand Bon Appétit Partners With Grubhub for a Virtual Restaurant

Ghost kitchens are becoming such an important part of the food industry now that even non-restaurant food businesses are launching them.

Bon Appétit is the latest. Once just a glossy magazine full of food features and recipes, the publication has (wisely) kept up with the times by evolving into more of a food brand that includes a YouTube channel of instructional videos, a podcast, and live events. Now Bon Appétit has teamed up with Grubhub to open a virtual restaurant in Chicago.

Bon Appétit, Delivered launched yesterday as a delivery-only concept restaurant that features dishes from the brand’s magazine, website, podcast, Instagram feed, and other channels. Recipes for the meals are all developed by Bon Appétit’s Test Kitchen editors in collaboration with the folks at Lettuce Entertain You restaurant group, who will run the virtual restaurant from its existing kitchens.

Like most other ghost kitchens, this one has no dining room and exists solely for the purpose of fulfilling delivery orders. The Bon Appétit Delivered menu is available exclusively to Chicago residents right now who order through Grubhub. Pricewise, Bon Appétit, Delivered is what you would expect from a gourmet food brand: main courses cost roughly between $17 and $23, with side dishes hovering around $7.

Bon Appétit, Delivered is actually the second time Grubhub and Lettuce Entertain You have collaborated on a ghost kitchen/virtual restaurant. In August, the delivery service launched a Chicago-based virtual restaurant with another non-restaurant food concept, the Whole30 brand, to deliver Chicago residents meals based on the Whole30 food program.

Both that concept and Bon Appétit, Delivered are, while creative, not that surprising. Because ghost kitchens don’t come with the high costs of maintaining a full-service restaurant with a front of house, they’re increasingly seen as a way to test out new concepts without incurring as much financial risk. And since ghost kitchens are largely delivery-only concepts, they can reach a larger audience faster than brick-and-mortar locations can.

With its latest collaborations, Grubhub is seemingly trying to create a new category of ghost kitchens with non-restaurant entities. The company hasn’t yet said if it will be expanding these concepts beyond Chicago, but whether in the Windy City or elsewhere, Whole30 and Bon Appétit are probably the first of many virtual restaurants to come from Grubhub.

Fatburger Is Turning Los Angeles Stores Into Ghost Kitchens for Its Sister Brand

Southern California QSR chain Fatburger is turning 15 of its Los Angeles locations into ghost kitchens for Hurricane Grill & Wings, one of its sister brands, according to a post this week from Nation’s Restaurant News. Both chains are owned by Los Angeles-based restaurant company FAT Brands.

Hurricane Grill & Wings has restaurant locations across Florida as well as in New York, New Jersey, and a handful of other states. A store for Chula Vista, CA is in the works, but at present, the chain has no locations in operation in the state of California. However, thanks to Fatburger’s newly launched ghost kitchens, customers in Los Angeles will be able to access the Hurricane menu when ordering for delivery.

The limited version of Hurricane’s menu will feature the chain’s wings as well as a few other items like onion rings, fries, and soft drinks. The menu will only be available for delivery customers who order via the usual suspects of third-party delivery: Grubhub, Uber Eats, Postmates, and DoorDash.

To be clear: The virtual Hurricane restaurants aren’t displacing those Fatburger locations. Rather, Fatburger’s kitchens will do double duty, with cooks trained to make food from both menus.

Like any other ghost kitchen, Hurricane’s will be a completely unseen operation. There’s no dining room involved — customers who eat in at Fatburger locations doubling as ghost kitchens will not be able to order off the Hurricane menu, which, as mentioned above, will be available solely through third-party delivery channels.

For a restaurant company trying to grow multiple brands at once, a move like FAT Brands’ is a smart play towards enticing new customers who might be fans of one restaurant chain but wouldn’t otherwise be exposed to another. Turning existing real estate into a ghost kitchen for another brand is a way to expose customers to more of those choices without incurring the high costs and thin margins of a full restaurant location that includes a dining room.

And in a restaurant business where delivery is becoming increasingly mandatory, enticing customers to try a new brand through delivery also potentially increases a business’s off-premise sales — something that would not only make investors happy during earnings calls, but could also give a brand more power negotiating commission fees with third-party delivery services.

According to NRN, FAT Brands wants to expand ghost kitchens for the Hurricane chain to 12 more Fatburger locations in the fourth quarter, and eventually apply the concept across its entire brand portfolio.

Postmates Raises $225M, Now Valued at $2.4B Ahead of IPO

Third-party delivery service Postmates has raised another $225 million in funding, TechCrunch reports. The round was led by GPI Capital and brings the service’s total amount of funding to roughly $1 billion. Postmates is now valued at $2.4 billion.

The San Francisco-based company confidentially filed for an IPO in February of this year. At last check, the company will make its IPO paperwork public this month and is expected to debut on the stock exchange at some point during the fiscal third quarter of 2019.

As TC writes:

. . . last-minute financings are critical for companies poised to run out of cash and in need of an infusion prior to hitting the public markets. The motives for Postmates last-minute financing are unclear, however, the company will certainly begin trading on the stock market at an interesting time.

Postmates would follow third-party delivery rivals Grubhub and Uber Eats into the public markets. Rival and current market leader DoorDash is also rumored to be going public.

But as we’ve written before, the long-term viability of third-party delivery is still in question. Postmates and DoorDash might be valued at massive sums right now, but as a model, third-party delivery has yet to become profitable.

It’s also an almost-constant source of controversy these days. From shady tipping policies to proposed caps on commission fees, these services have received endless headlines calling into question the ethics of the model. Meanwhile, California’s Assembly Bill 5, which was just signed into law, is a major blow to companies like Uber and DoorDash and will most likely have a ripple effect across other Democrat-led states.

Recent numbers put third-party delivery app users at 44 million users in the U.S. by 2020. When Postmates lines up next to its rivals in the public market, it will also be joining the struggle to somehow turn a profit from those millions of users.

The Week in Restaurant Tech: More POS Integrations, New Delivery Deals

Fall is just around the corner, which means we’re about to get inundated with headlines about pumpkin-spice lattes. And while the restaurant industry is seeing a bit of a sales slowdown at the moment, something that’s expected to continue through the last third of 2019, the space has no end of tech-centric developments happening week to week. Here’s a look at a few more pieces of restaurant tech news from the last few days.

Appetize Partners With Olo and Others for POS Integration

What’s the solution to having too much tech in the restaurant? More tech, obviously. This week, Playa Vista, CA-based POS maker Appetize announced new integrations with not one but three more pieces of restaurant tech software: Olo, which consolidates orders from multiple third-party channels, Punchh, who handles loyalty programs, and SynergySuite, a back-of-house inventory management solution. According to a press release, these additions will help restaurants to balance the many digital demands in the biz today: third-party delivery capability, loyalty programs, mobile order and payments, and back-of-house duties like inventory management.

Grubhub Launches Perks

Even as more restaurants talk about bringing customer loyalty back under their own roof, third-party delivery companies are countering that by adding new bells and whistles to retain users within their own apps and websites. This week, Grubhub launched Perks, an in-app feature that offers users more ways to earn loyalty points from restaurants via deals only available within the Grubhub app. Since the feature is actually integrated with restaurant loyalty programs, those rewards and points are all redeemable from the same account. However, to access all the free food on offer from the likes of Taco Bell, Red Lobster, and Smoothie King, customers have to use the Grubhub app.

Barclaycard and TouchBistro Join Forces to Improve Restaurant Payments

Another POS company, TouchBistro, announced a partnership with UK-based credit card and payments processor Barclaycard. TouchBistro will integrate Barclaycard’s payment solution into its iPad-based POS system for UK restaurants, making it easier for staff to split checks, and gratuities and process payments. For any restaurant-tech feature involving payments, the biggest benefit is that they cut down the amount of manual calculations and data entry workers have to do, which in theory reduces the risk of human error when it comes to keeping track of the numbers.

New Delivery Deals

In what was just another week in the world of delivery, numerous chains announced partnerships with third-party services. Casual dining chain Village Inn announced it’s now delivering via DoorDash; fast-food chain A&W also teamed up with the service, to deliver to nearly 400 locations across Canada. DoorDash didn’t grab all the headlines this week, though. As we covered in depth, McDonald’s is expanding its McDelivery program throughout NYC and the Tri-State area with Grubhub.

Intrigued? We’ll be talking restaurant tech at this year’s Smart Kitchen Summit this October in Seattle. Grab your tickets here and come on down.

McDonald’s Partners With Grubhub, Expands Delivery to NYC and Tri-State Area

McDonald’s struck a major deal with Grubhub this week to expand the burger mega-chain’s McDelivery program in the NYC and Tri-State areas.

McDonald’s ended its exclusive delivery partnership with Uber Eats earlier this year. Then, in July, it added DoorDash to its roster to expand McDelivery further across the U.S. Among third-party delivery services, DoorDash currently holds the number one spot in terms of market share.

But Grubhub is still the top service in NYC and many other parts of the Northeastern U.S., including Boston and Philadelphia. Mired in controversy it maybe be, it’s still McDonald’s best bet when it comes to expanding delivery to as many locations as possible in that part of the country.

In the press release, McDonald’s said the Grubhub-Seamless partnership will expand delivery to 500 locations in the NYC and Tri-State areas, while overall delivery is expected to be a $4 billion business for the company in 2019. As is becoming the norm with major delivery partnerships, Grubhub will integrate its service directly into the McDonald’s POS system to streamline and speed up orders. McDonald’s did not say when exactly the new delivery program will become available.

The aggressive delivery expansion is part of McDonald’s push to transform all of its locations into “Experience of the Future” stores, which emphasize tech initiatives like self-order kiosks, mobile ordering and payments, and AI powering the drive-thru. And, of course, delivery.

Grubhub, meanwhile, has been building more of a presence in the rest of the country. In August, the service announced nationwide delivery with Shake Shack as well as a partnership with Dine Brands, who owns Applebee’s and IHOP restaurants.

Panera’s Hybrid Approach to Delivery Could Be a New Standard for Restaurants

Panera is one of those increasingly rare restaurant chains that’s not a pizza company and has still managed to successfully keep its delivery program an entirely in-house operation — until now, that is. Yesterday, the St. Louis, MO-based bakery and sandwich chain announced its first-ever partnerships with third-party delivery services.

Customers will now be able to order Panera goods from DoorDash, Grubhub, and Uber Eats along with the company’s own website and apps. However, these third-party delivery service partnerships are for online ordering only; Panera will still use its own fleet of drivers to handle the actual delivering of the food from restaurant to doorstep.

Panera has dubbed this the “bring your own courier” model, and the approach appears to be about maintaining quality and brand integrity throughout the whole of the delivery process — an issue more and more restaurants, large chains in particular, are now addressing.

Setting aside the ongoing concerns around commission fees a moment, one of the biggest benefits of working with third-party delivery services is that restaurants get easy access to a highly streamlined online ordering platform. Developing an in-house system that holds menus, processes orders and payments, and gives users status updates on their orders is an expensive, time-consuming undertaking. Third-party delivery services handle this work for the restaurant, and also offer the increasingly popular option of direct-to-POS integration with restaurant systems, where an order from, say, Grubhub, goes directly to the main POS system.

But restaurants get little in the way of branding when they’re listed on Grubhub et al. or, for that matter, where they show up in terms of users’ searches. And they get pretty much zero control over the quality of food and customer service once a meal leaves the restaurant in the hands of a third-party driver. For example, they can’t control that one out of four drivers apparently sample your food en route to your home. Sure, the risk of that or of an order being late/cold/incorrect doesn’t disappear when you bring delivery in house, but at least Panera has more control over who to hold accountable in those situations.

Continuing to use its own drivers as well as maintain an in-house ordering program also lets Panera exercise more control over branding and customer service while still giving the company access to a wider user base via Grubhub, Uber Eats, and DoorDash.

The nature of this new partnership also makes Panera an early adopter to what could become a major trend among national restaurant chains. Just yesterday, we looked at Toast’s “Restaurant Success in 2019” report, which suggests that having both a robust in-house online order system and a presence with all major third-party delivery platforms “could be a boon to your business” when it comes to major multi-unit chains.

Most brands, however, can’t or don’t want to incur the economic burden of maintaining a driver fleet, which is one reason we’re also seeing reverse versions of this hybrid strategy. Denver, CO fast-casual chain Teriyaki Madness is a good example: the company still works with third-party delivery services, using their drivers, but is trying to originate more orders through its own in-house app. A company called Shift-Pixy, meanwhile, acts as a middleman between restaurant and delivery service and provides its own drivers to drop the food.

Those approaches may help restaurants with brand credibility, but Panera’s approach is so far the only major one to both take advantage of the continued popularity of third-party delivery while still owning that last mile. “We believe this partnership model helps differentiate us from our competitors and will take our already successful delivery business to new heights,” Dan Wegiel, Panera’s EVP Chief Growth and Strategy Officer said in a statement.

This hybrid approach could indeed prove fruitful for Panera, though it would have to be yielding some pretty big returns to influence other chains to go as far as investing in their own drivers in order to adopt similar strategies.

Regardless of whether that happens, the industry will see plenty more of these hybrid approaches to delivery along with many more questions who should really own that last mile.

Grubhub’s New Partnership With Dine Brands Intensifies Its Rivalry With DoorDash

Grubhub announced today it has expanded its partnership with Dine Brands, parent company of Applebee’s and IHOP, to over 3,000 U.S. locations across those two restaurants.

Delivery via Grubhub will be available at more than 1,700 Applebee’s locations and 1,300 IHOP locations in the U.S. And while the deal is officially with Dine Brands, Applebee’s and IHOP franchisees who use Grubhub as their preferred delivery provider will get access to more marketing opportunities and better analytics.

According to the press release, Dine Brands and Grubhub are also “working towards” a direct-to-POS integration for these restaurants, which means orders from Grubhub go directly to Applebee’s and IHOP POS systems — an increasingly common practice for national chains striking delivery deals with major third-party services. Grubhub, who acquired digital ordering platform LevelUp in 2018 to assist with such integrations, already has similar deals in place with chains like Taco Bell and Shake Shack. Other third-party delivery services offer POS integrations as well. DoorDash, for example, recently inked an exclusive deal with Chili’s that includes direct-to-POS integration.

Speaking of DoorDash: The Dine Brands-Grubhub deal comes just a couple weeks after Applebee’s announced a nationwide partnership with DoorDash.

The overlap itself isn’t a huge deal — most restaurants these days find it necessary to offer more than one third-party delivery service to attract the widest customer base possible. But Applebee’s is practically synonymous with suburbia, and no one does the ‘burbs like DoorDash. Grubhub, meanwhile, has long ruled New York City and has less of a presence in the nation’s strip malls.

Until now, it seems. As third-party delivery comes under increasing scrutiny, including questions around these companies’ profitability, being King of the Big Apple is no longer enough. Grubhub lost the number one spot in terms of market share to DoorDash earlier this year, and with the latter possibly IPO’ing as early as Q4, consolidation in the third-party delivery world seems imminent. To stay competitive with DoorDash, Grubhub will have to follow its rival out of the urban enclaves and strike more large-scale deals with major chains serving the rest of the country.

In-house? Third-party? Why Online Ordering Isn’t One or the Other for Restaurants in 2019

When it comes to online ordering, some restaurants will soon need to offer the functionality through their own apps as well as via third parties like Grubhub.

Restaurant-tech powerhouse Toast indicated that much in its recently released “Restaurant Success in 2019” report, which surveyed 1,253 restaurants and 1,030 guests across the U.S. In the report, online ordering plays a starring role, with both restaurants and guests calling it one of the most important technologies for today’s restaurant experience.

In and of itself, that’s not terribly surprising. Over half of restaurant spending will be off-premises by 2020 and will account for up to 80 percent of the restaurant industry’s growth over the next five years according investment group Cowen and Company. Unless every restaurant in America soon installs a chatbot to answer phones, online ordering via apps and websites will become a must for every eating establishment in the industry.

But according to the Toast report, what that looks like will vary from restaurant to restaurant, and businesses won’t necessarily have to sign their brands away to the DoorDash’s and Grubhub’s of the world to stay competitive. In fact, 51 percent of guests surveyed in the Toast report said they had placed an order via a restaurant website in the past month compared to 38 percent of guests who had ordered from third-party service.

That’s both good news and another challenge for restaurants. Customers ordering directly from a restaurant’s website can save the business some of the fees that stack up when customers order through a third-party service like Uber Eats. The flipside for restaurants is that if you don’t have your own delivery fleet, you still have to pay for drivers and, as the report rightly points out, developing an in-house online order system is expensive and probably not justifiable for independent businesses with only one or two locations. It’s a different story, though, for multi-unit chains, as the Toast report indicates:

Getting an app developed for your restaurant may not be viable for a small restaurant with one location, but if you franchise, it could be a boon to your business. The majority of diners are ordering online a couple times a month and looking for a variety of pickup and delivery options.

Even so, the Toast survey makes it clear that customers still want the option to order via third-party delivery services, with respondents having ordered most from Grubhub, Uber Eats, and DoorDash in the last year. (Postmates is completely absent from the list.) According to the report, it’s “extremely important for restaurants to be represented across multiple third-party delivery platforms.”

Despite the continued popularity of third-party delivery services, though, the litany of criticisms lobbed at them grows: commission fees, tipping policies, antitrust issues, and questionable profitability over the long-term. At the same time, companies like ShiftPixy and Olo are becoming more popular with technologies that actually make it easier for restaurants (chains, in particular) to develop and maintain in-house ordering capabilities.

Both those trends, coupled with the constant consumer demand for speed and convenience, will create a fine balance restaurants large and small must strike in the coming months.

The Proposed Cap on NYC Delivery Fees Could Ripple Across the Rest of the Country

The New York State Liquor Authority (NYSLA) has proposed adding a 10 percent cap on the commissions full-service restaurants pay to third-party delivery companies, according to Restaurant Business Online. While such a move would provide some relief for restaurants, whose struggles with these fees are well documented, it could also put up more road blocks for third-party delivery services as they struggle to reach actual profitability. And the fight probably wouldn’t stay put in NYC for very long.

The NYSLA’s advisory, as it’s called, urges that commissions paid by restaurants with liquor licenses be capped at 10 percent. The reason the NYSLA can make such a call is because third-party delivery services share in these restaurants’ profits, and are therefore by law subject to vetting by the authority.

Rather than prohibit delivery services from charging the current 12- to 30-percent commission fees, the law, if put into effect, would make it illegal for the restaurants themselves to pay more than 10 percent on those fees. Restaurants would then have to reject anything higher than 10 percent, making it virtually impossible for delivery services to charge more.

Grubhub, in particular, has criticized a draft of the proposal, saying it contains “internal inconsistencies, vague language and an apparent attempt by the SLA to go beyond their jurisdiction.” And while Grubhub didn’t explicitly say as much, the “vague language” could potentially open the door to third-party delivery companies sidestepping the 10 percent cap with other charges, like a convenience fee.

The NYSLA urged that the advisory be discussed during a meeting on August 20.

To be clear, the advisory would only impact restaurants with liquor licenses; the scores of food businesses in New York without licenses wouldn’t be able to reap any benefit, at least not now. Mark Gjonah, chairman of the Small Business Committee of the New York City Council, told RB that in regards to these restaurants that are left out, the committee “will continue its work to establish a comprehensive solution that levels the playing field for all of New York’s locally owned restaurants.”

Should these fee changes become law, it will create a scramble for third-party delivery companies to find ways manage profitability — rather a feat, considering these services aren’t actually profitable at the moment. And with DoorDash and Postmates both pursuing the IPO track, that struggle to gain profitability — and long-term investment and viability — is becoming more of a hot-button issue for delivery companies.

In NYC, meanwhile, commission fees are just one of the many griefs lobbed against these companies. Grubhub currently takes the lion’s share of the wrath here, since it still leads the NYC market. The company was not only the center of a June oversight hearing that called into question delivery services’ power, it’s also received accusations of cybersquatting and calls for an antitrust investigation.

The other major delivery players — Uber Eats, DoorDash, Postmates — may not be getting a constant barrage of bad press in the NYC market, but they’ll be subject to the same scrutiny as Grubhub if a law over fee changes were to be enacted.

And if that were to happen, there’s a high chance for a ripple effect to other cities, which could very likely play out the way the fight over the cashless business model has across the country. When NYC introduced legislation that would ban cashless businesses from the city, including restaurants, it was a matter of mere months before New Jersey, Philadelphia, and San Francisco did the same, essentially stifling Big Tech’s hold over local business.

If this week’s advisory advances further, it looks like third-party delivery services are well on their way to facing the same backlash — on an even grander scale.