• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Skip to navigation
Close Ad

The Spoon

Daily news and analysis about the food tech revolution

  • Home
  • Podcasts
  • Events
  • Newsletter
  • Connect
    • Custom Events
    • Slack
    • RSS
    • Send us a Tip
  • Advertise
  • Consulting
  • About
The Spoon
  • Home
  • Podcasts
  • Newsletter
  • Events
  • Advertise
  • About

GrubHub

July 31, 2018

Delivery Is Making These Restaurants Literally Redesign the Way They Do Business

As the country’s appetite for food delivery grows and the market inches towards a projected $15.9 billion by 2020, restaurants are under pressure to adapt.

More and more, that means altering the physical restaurant space so it can better accommodate this influx of new orders. Extra meals require extra bodies to cook and package the food, after all, not to mention extra space for third-party devices, and somewhere to put completed orders waiting to be picked up by a delivery driver.

It’s wishful thinking to believe that a food delivery industry standard will emerge, since every business has its own unique space — and therefore, its own unique needs. Instead, restaurants are trying out different approaches; some on a large scale, some on a smaller one. A handful of promising ones have emerged when it comes to creatively solving the space issue.

For those with room to expand, creating a separate entrance and/or delivery area is one option.

Cheddar’s Scratch Kitchen just opened a location in Ft. Worth, TX that includes “Cheddar’s first dedicated carry-out area.” It’s close to the kitchen but separate from the main dining room and has its own entrance with direct access to the parking lot. For a Grubhub or UberEats driver, this is a potentially huge timesaver, as picking up an order no longer involves weaving through crowds around the bar and flagging down an employee’s attention.

Velvet Taco conceptualized a separate entrance for to-go orders long before the delivery boom went off. The Dallas, TX-based chain offers its famed “backdoor chicken” order, where customers stroll up to the back door, hand over $20, and get a bag of goodies in return, rotisserie chicken and tortillas included. Adjusting for more delivery orders was just a matter of routing them along the same path. Third-party services (Velvet Taco works with several of the usual suspects) collect orders at the back door of the chain’s Austin, TX location. Meanwhile, a brand-new Dallas, TX location also includes a pickup window that can be accessed via a dedicated parking lot.

If a second door isn’t an option, there are still plenty of ways to work with space inside the restaurant’s four walls.

Culiver City, CA-based Tender Greens divides its customers into two lines: one for walk-ins, one for delivery and order-ahead takeout. That logic applies to the kitchen as well, where cooks are split into two separate lines so those prepping in-house orders aren’t bogged down by the number of tickets for delivery. At the chain’s El Segundo, CA location, even the furniture pulls double duty: a bartop functions by day as a counter for preparing to-go orders, then becomes communal seating for sit-down customers. Ditto for Tender Greens’ flagship NYC location at Union Square, which features 14-foot shelves, separate from the dining room, where third-party delivery services can grab their designated orders and go (a nearby area provides the same convenience for customers picking up food).

Some restaurants are scrapping dining room altogether. Enter the ghost kitchen, the cloud kitchen, or whatever you want to call it. These establishments operate with delivery-only models, where there’s no front of house and cooks serve up orders solely for delivery drivers to pick up.

The Green Summit Group gets a lot of press in this space for its commissary kitchens in NYC and Chicago, which work exclusively with Grubhub. These guys basically run multiple “restaurants” whose operations are housed in the same kitchen and whose food is cooked by the same chefs.

There’s an economical attraction to ghost kitchens, of course. Those using ghost kitchens don’t have to worry about buying equipment, hiring a new staff for every new location, or even providing simple things like cutlery and tablecloths. Businesses who can’t, or don’t want to, deal with these elements or lock themselves into a 10-year lease and buy their own equipment can also look to folks like Kitchen United, who operates a shared kitchen space available for hourly or monthly rent which can house up to 15 restaurant operations. “When a restaurant operator comes to a KU kitchen, they get a virtual restaurant solution,” Kitchen United CEO, Jim Collins told Chris Albrecht a few months ago.

So is the dining room dying? Absolutely not. Dining out as an experience will be with us until customers run out of money or the Food Network runs out of celebrity chefs to create. Anyway, delivery wasn’t designed to replace the Michelin star, or (probably) even the Olive Garden; it’s just an easier, faster way to get a basic dinner without having to go to much trouble. Restaurants are starting to realize its importance and adjust their spaces accordingly.

July 30, 2018

White Castle and DoorDash Partner, Offer Free Delivery

Ever since UberEats and McDonalds teamed up at the end of 2016, fast food chains big and small have made a charge towards delivery services in an attempt to keep up.

White Castle is the latest such chain; today they announced, via an email release, a partnership with DoorDash to offer delivery at almost 300 locations in the U.S. This is in addition to White Castle’s existing delivery services (see below). And in what’s also becoming a typical move for such releases, there will be a limited free delivery deal.

The majority of the White Castle menu is now available on DoorDash, from the iconic slider to those Crave Cases that have fed many a Superbowl party over the years. To celebrate this new partnership, DoorDash is offering free delivery on White Castle orders of $10 or more between today (July 30) and August 5, in selected areas. The company didn’t specify which areas, so check DoorDash’s list of locations for more info.

If said deal isn’t near you, fear not. You can still likely get White Castle delivered to your doorstep via Grubhub (though there’s no deal involved), as White Castle teamed with the service earlier this year.

Many food chains partner with multiple third-party services in order to grab the biggest slice that they can of the $43 billion food delivery market (predicted to hit $76 billion in 2022). That said, we’re seeing a small rise in exclusive partnerships — à la McDonalds-UberEats. DoorDash and Wendy’s also unrolled an exclusive partnership at the end of 2017. And earlier this year, Grubhub became the “official online ordering partner” of Yum Brands (Taco Bell, KFC, etc.) when the latter invested $200,000 million in Grubhub common stock.

No word yet on whether White Castle will partner with anyone else — Uber Eats, for example — in the future. White Castle has already embraced alterna-burgers and attempted to deliver Crave Cases via drones. So it’s safe to say the company is open to new ways in which to reinvent its business (digitized drive-thru strategy, maybe?), and new partners that can help that process.

July 25, 2018

GrubHub Acquires LevelUp for $390M, Deepens Foothold in the Restaurant Space

This morning, food delivery company GrubHub announced that it would acquire digital order management platform LevelUp for $390 million cash.

Boston-based LevelUp was started in 2011 and had raised almost $108 million, according to Crunchbase. The company’s platform integrates into restaurants POS systems to facilitate online ordering and payments while offering loyalty discounts to repeat customers. Their software is already in use at 200 fast food and fast casual chains like Sweetgreen, KFC, and Taco Bell.

GrubHub founder and CEO Matt Maloney told TechCrunch that the purchase will allow his company to handle more deliveries and deepen its integration with restaurant partners’ POS systems. By acquiring LevelUp, GrubHub is widening its focus and taking a more holistic tack towards food delivery domination.

This announcement comes a few months after Uber Eats, GrubHub’s biggest U.S. competitor, acquired online ordering platform orderTalk. Both orderTalk and LevelUp integrate with restaurants to facilitate online orders and payments, but LevelUp also brings customer engagement and loyalty perks to the table. And with LevelUp’s long list of restaurant chain partners, including those under the Yum Brands umbrella, this acquisition helps cement GrubHub as the food delivery king — at least for now.

GrubHub has already gobbled up quite a few smaller food delivery businesses — including Seamless in 2013 and Eat24 in October of last year — making it the biggest company in the space (though Uber Eats is growing faster). It makes sense they’d start exploring other strategies, besides pure expansion, to ensure their supremacy.

As Maloney stated in the company’s second quarter earnings report, in which he announced the LevelUp purchase, GrubHub is hoping to become “the most comprehensive solution for restaurants.” With this acquisition, they just got closer to that goal.

May 16, 2018

Uber Eats Gobbles Up POS Integration With orderTalk Acquisition

Ever gone neck and neck with another car down the road for several miles only to suddenly have them speed up and leave you in a cloud of freeway dust? That’s probably how a lot of third-party delivery services are starting to feel about Uber Eats right now.

Grubhub remains the bigger company in terms of market share, but Uber Eats is the fastest-growing service, and according to recent numbers has the lead in 15 major U.S. cities, including Atlanta, Austin, and Seattle.

And that number will most likely increase, as Uber Eats just announced its acquisition of restaurant tech company orderTalk, who’s online ordering platform is known for its direct and easy integration with existing and custom custom POS systems for restaurants. Terms of the deal were not disclosed.

Uber Eats head of biz dev, Liz Meyerdirk, told Skift the acquisition is part of a two-fold strategy: to reduce the amount of errors, which can arise with manually entering orders, and to streamline workflow, so that orders via UberEats go direct to the kitchen, sans middleman.

For now, Uber Eats will “retain orderTalk’s point of sale technology as well as several engineers,” according to Meyerdirk. They’ll wind down other orderTalk features over the coming year, including the ability for restaurants to accept orders through the orderTalk platform. (Presumably, they’ll have to switch to Uber Eats.)

The acquisition is none too soon, considering Grubhub already integrates with leading POS systems and has exclusive deals with several big-name chains, including its recently announced partnership with Jack in the Box.

Not to be outpaced, Uber Eats has its own deals with quick-service heavyweights, including its lucrative and exclusive partnership with McDonald’s. They also just inked a deal a deal with Popeye’s to deliver in Florida, New York, Washington D.C., and Chicago.

If you happen to be a Miami-area resident, the Uber Eats-Popeye’s deal means you can get free chicken, biscuits, and red beans today in celebration. Head over to the Uber Eats website or app to get the goods.

For the rest of you, more Uber Eats deals are probably speeding your way in the very near future.

April 21, 2018

Food Tech News Roundup: More Crickets, Fewer Wobbly Tables

Happy Saturday! Hopefully you’ve got some pancakes and a hot liquid of your choice. Maybe you’re recovering from the Specialty Coffee Expo, like we are (check out the robot barista and connected coffee roasters we saw!). To kick off your weekend, we’ve rounded up some quick food tech stories from the week that caught our eye. Enjoy!

Edible insects leap forward in Canada
It was a big week for edible insect company Entomo Farms. First, Maple Leaf Foods, a company best known for its plant-based meat products, took a minority stake in the company. Secondly, food distributor Loblaws launched a cricket powder made with insects from Entomo Farms. These two updates are a big step towards introducing edible bugs into the mainstream — at least in Canada, where Maple Leaf and Loblaws are based.

Grubhub adds Venmo payment option
This week food delivery service Grubhub launched an update that will allow its customers to automatically split the cost of their food with Venmo, the Paypal-like app that lets you send money to friends, and request payments. This is a (smart) way that Grubhub is adding value, trying to distinguish itself from the competitive food delivery pool. Grubhub owns Eat24 and Seamless, so they’ll also offer the Venmo payment option.

Finally! A way to fix that wobbly table
You can stop wedging sugar packets and napkins under your wobbly restaurant tables — a pair of restauranteurs have developed a hydraulics system that will keep your table wobble-free, even on uneven floors. Customers can either purchase their FLAT table bases, which use fluid to expand or compress table feet, stabilizing the table, or if they don’t want to purchase all new furniture, there’s also a modular option which can replace screw-in table feet. A low-tech solution to a highly annoying problem.

The Food Corridor releases a guide for commercial kitchen spaces
On Tuesday The Food Corridor launched their Shared Kitchen Toolkit. The Food Corridor, which raised $555K in February, is an online platform which lets budding food entrepreneurs connect to shared commercial kitchen spaces. The web-based toolkit is geared not towards startups, but towards people who want to launch and manage a commercial kitchen space. Because with more shared kitchen spaces come more startups; if you build it, they will come.

Did we miss any food tech updates from the week? Tell us in the comments, or on twitter @thespoontech.

March 30, 2018

Ontray Provides Online Ordering and Delivery for Smaller Restaurants

A recent CNN Money headline read “Why Uber Eats and GrubHub partnerships are risky for restaurants.” The post lays out reasons for caution, including squeezing already tight restaurant margins with third-party delivery fees and increased chances of poor customer experiences with your brand (think: late delivery of lukewarm food).

The siren song of these alluring delivery services is enticing, especially considering the large audiences companies like Uber Eats and Grubhub have. In the fourth quarter of last year, GrubHub alone had 14.5 million “active diners” (a 77 percent year-over-year increase). And in the cutthroat world of the restaurant biz, you have to go where the customers are.

Ontray, a small Philadelphia-based startup, doesn’t want eateries to abandon services like GrubHub and Uber Eats. But it does return some of the power (and the purse) back to individual restaurants.

It does this with a SaaS-based tool that makes it easy for smaller restaurants to create their own websites, complete with online ordering and delivery capabilities. There’s no upfront cost for the restaurant; Ontray only charges a 5 percent commission on sales, which the restaurant can assume or charge to its customers.

Armed with their own site, restaurants can better claim their own SEO, and they aren’t driving repeat customers to an aggregator like GrubHub. If forced to go to a service like Uber Eats, a customer could be distracted by a different restaurant listed or even nudged into a restaurant owned by Uber.

Ontray Founder and CEO, Tyler Wiest, considers his company complimentary to delivery services. He thinks restaurants should take advantage of the big audiences GrubHub and Uber Eats provide, but those services should serve as springboards. Wiest suggests that when restaurants fulfill those outside delivery orders, they should include a coupon offering 10 percent off the next meal if it’s ordered directly through the restaurant’s site. In other words, a third party like GrubHub should become more of a marketing arm for a restaurant rather than an ongoing driver of business.

To broaden its reach, Ontray also partners with smaller, regional delivery services like Chow Caddie just outside of LA, and Catskills Delivery outside of NYC. These local services can do the leg work of reaching out and bringing neighborhood restaurants onto the Ontray platform.

While this moves Ontray in the right direction, Wiest’s company still faces competition from a number of bigger players like Olo, LevelUp and MonkeyMedia–all of whom offer tools to get restaurants online. Additionally, while Ontray-created sites are mobile friendly, they don’t yet offer restaurants the ability to create their own mobile apps.

While it’s great that Ontray wants to even the playing field for the little guy, targeting small businesses makes it more difficult for the startup to scale. The company isn’t venture backed as of yet, and Wiest, the only employee, has had to manage both the technical and business development side of his startup, which can put a strain on both.

Wiest remains undaunted, however. In an email he told me, “Ontray is primarily using online ordering to gain a foothold in both the restaurant and delivery industries. Using this foothold allows us to build an ecosystem facilitating interactions between not only restaurant and delivery providers but also marketing agencies, reservation application, ticket management / POS systems etc..” He sees Ontray becoming the glue that brings together any system the restaurant wants to use to facilitate order and delivery.

Until then, however, restaurants looking to get online can give Ontray a try. Since there’s no upfront cost, that relationship probably isn’t terribly risky.

May 25, 2017

Is Facebook’s New Food Ordering A Giant Misstep?

In Facebook’s attempt to keep the users on the site more than the average of 50 minutes per day, the company has added food ordering to its roster of activities. So, now, in addition to playing games, pinging your elementary school friends and sharing your Kickstarter faves, you can click and order food from local restaurants.

The feature, recently added to Facebook’s mobile and webtop sites, is basic in its operation. Depending on security settings, the “Order Food” option on the menu (marked with a hamburger emoji) will either populate nearby establishments or allow you to search based on location. A story in TechCrunch reports the new service will be powered by Delivery.com and Slice.

Rather than making a big splash with the announcement, Facebook mentioned food ordering in an October 2016 release. The news was lumped in with other planned capabilities, such as requesting appointments, buying movie tickets and getting quotes from local businesses. In short, it’s the concept of throwing ideas against a wall and seeing what will stick.

Because of Facebook’s reach and market clout, this new capability may be considered a threat to established player such as GrubHub (whose stock took an immediate hit).  In reality, that notion of immediate impact on competitors is an overreach. While Facebook’s new Order Food capability has yet to fully mature, it does not appear to be incorporated into user feeds which would make it far more immediate and powerful. As currently deployed, the feature is not an impulse play like the many sponsored posts that appear in Facebook member feeds. Facebook hopes its habitual users will simply add food delivery to their existing list of activities as they go through their day.

More than anything, Facebook’s entry into the restaurant delivery space shines a light on one of the company’s more glaring weaknesses—its lack of a viable commerce infrastructure. On the other hand, Amazon’s new restaurant delivery service takes on all the workload from the restaurants it serves. And, by the way, Amazon has its own fleet of drivers to deliver food while Facebook is in the background with others doing the heavy lifting.

Facebook’s strategy of looking for ways to keep its users on the site longer is a throwback to the early days of web portals such as Yahoo, Lycos, Infoseek and even AOL. Those stalwarts had one or two prime draws—generally search and email—that kept folks coming back several times a day. Each of these—now mostly dormant—websites began to add new functionality which eventually made them so cluttered that they collapsed under the weight of their vision. It also is one of the reasons that Google was able to come in and eradicate the competition—it did one thing (search) and did it better than anyone else.

In the volatile world of food delivery, the winners will be those who offer restaurants a total, easy-to-use platform that allows them to focus on food, while partners such as GrubHub, UberEats, Amazon, Postmates and others take on the heavy lifting. Will Facebook be a player in this food fight? Probably not.

April 14, 2017

Grubhub’s Future Clouded by Big-Monied Competition

Once the darling of the restaurant-to-home delivery business, Grubhub’s TV commercial tagline “click, click, food,” may be in danger of becoming an internet relic.  With the explosive growth of well-heeled competition in this market space, there is increased skepticism from Wall Street and investors.

Despite its current lofty standing, in which the Chicago-based company works with more than eight million restaurants and serves more than 290,000 meals per day, near and present dangers loom. Stock analysts believe that, as Grubhub moves beyond its primarily urban clientele, order size and frequency will drop. As their competitors look to robotic delivery of food, Grubhub said it would be making minimal investments in its delivery infrastructure in 2017. One analyst believes being acquired is the best hope for the company.

On a more micro level, many of Grubhub’s challenges are as a result of slow reactions to dynamic market conditions in the food delivery space.

By not creating a more significant barrier to market entry, companies such as Amazon and Uber have easily invaded Grubhub’s territories. With other businesses to leverage, both companies can more easily afford to absorb losses and invest heavily in costly advancements in logistics and consumer-facing content.

Postmates and DoorDash have inked deals with Starship Technologies to experiment with robotic delivery of food. While Uber presses forward with self-driving cars, Grubub has done little to think to a more streamlined future. There has been talk of adding a chat feature to its ordering app to allow customers to communicate with restaurants. This feature could be too little, too late.

In what was pegged as an April Fools Joke, Grubhub announced a new delivery feature called Delivery X which would allow the company to bring food to out-of-the-way places by using a fleet of folks on skateboards and parkour techniques. That vision might seem funny as a hyperbole, but thinking out of the box may be just what Grubhub needs to retain marketshare.

Some of Grubhub’s problems are common to businesses that grow as a result of buyouts and acquisitions of smaller companies, attempting to bring together disparate systems and cultures. The biggest of these deals was in 2013 when Grubhub merged with New York-based food-delivery stalwart Seamless (which owns more than half of the combined company). Add to that mix such firms as Dotmenu, LA Bite, Delivered Dish, AllMenus, Menupages and more.

Focusing on major metro areas such as New York and Chicago, which account for about 75% of its orders, has allowed the company to rack up $493 million in 2016 revenue. Moving into smaller metros will require expenditures in advertising and onboarding new drivers. Drivers in the food-delivery space are a fickle bunch, with many signing on to multiple providers and sticking with the ones that offer the best deals and flexible hours (or shifts, as they are known in that industry). It will be difficult to lure drivers from Amazon and Uber given they offer multiple revenue streams in the ridesharing and package delivery areas.

Laying Grubhub to rest in the graveyard of web failures is premature. The company has a market cap in excess of $3 billion and deals with California Pizza Kitchen and Fatburger in its portfolio. The company recently added the capability for customers to use their Amazon Echo devices for voice ordering. CEO Matt Maloney was heavily criticized for an email he sent to employees attacking the newly elected president, Donald Trump, but his ability to grow the company and take it public speaks to his leadership.

Before all is said and done, many players in current restaurant delivery space will go bust or—for the lucky ones—be acquired. Grubhub is teetering on the fence at the moment and will need to do more than delivering clever April Fools jokes to survive the market maelstrom.

March 10, 2017

The Food Delivery Boom Comes At A Price

Food delivery startups have been all the rage, dominating food tech investment for the last several years. In what has become an extremely crowded market, there are signs that the market is shifting, with companies like Square reportedly looking to sell off its food delivery business Caviar and competitors like Postmates struggling to raise more funds.

But even with the consolidation, food delivery startups have added a level of convenience to ordering takeout that consumers are now used to. But at what cost?

The New Food Economy, a non-profit publication that publishes long form pieces on the forces that are changing food as we know it, published a piece looking at the dark side of food delivery and the challenges it presents to small restaurant owners.

The business models of companies like Seamless, UberEats, Yelp Eat24 and Postmates goes like this: hungry customer goes online to order food. Instead of going to a specific restaurant’s website and ordering through their system or picking up the phone (an antiquated notion these days), they visit a food delivery website that gives them menus, pricing, online ordering and delivery options for all the area eateries. The GrubHubs of the world then turn around and charge said eateries 10-30% of each order. The lowered margins aren’t desirable, but the idea is that the increased volume from the food delivery site will make up for it.

Except that’s not always the case. Working with these services requires the business to have a tablet on site that takes orders and it can get overwhelming to track different orders from different services. And then there’s the matter of profit – when Teddy Roland, a restaurant owner profiled in the New Food Economy piece, tried to raise his delivery prices, Postmates and DoorDash refused.

“How is that different from the Mafia in the 70s saying, ‘I’m going to take 200 bucks not to break your legs?’” he says. “‘We’re going to take 20 percent of your money and you have to live with 80 percent.’ – Roland

The longer piece is worth the read. It’s not surprising that consumer appetite for more convenience comes at a price. Lower-priced clothing is made by workers making unlivable wages in deplorable conditions, cheap meat is produced by giant factory farms and quick food delivery services take profits from take out joints who are often small businesses.

Some restaurants are fighting back and using tactics to encourage customers to take the extra step and keep their money in the restaurant. Says Roland, ““I’m asking a little more out of my customers,” he says. “You want to be lazy and just use your thumbprint and GrubHub app, you’re going to pay more for it, that’s all.”

Previous

Primary Sidebar

Footer

  • About
  • Sponsor the Spoon
  • The Spoon Events
  • Spoon Plus

© 2016–2025 The Spoon. All rights reserved.

  • Facebook
  • Instagram
  • LinkedIn
  • RSS
  • Twitter
  • YouTube
 

Loading Comments...