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Daily news and analysis about the food tech revolution

Lyft

Lyft vs. DoorDash

We knew a DoorDash IPO was on the way, and it arrived this past week packaged with news that the company turned a profit in Q2 and has enough cash stockpiled to float along for quite some time. Throw on top of that DoorDash’s recent win on Prop 22 and its popularity among U.S. consumers, and it seems as if the company and its controversial business model for restaurant delivery are are unstoppable.

Or are they? The other big news this week came from rideshare service Lyft. Cofounder and president John Zimmer said on the company’s earnings call this week that Lyft had spoken with restaurants about many issues plaguing third-party delivery, including the sky-high commission fees companies like DoorDash charge per transaction. 

“These businesses want to partner, someone to help them move their goods from point A to point B, but one that does not step in between them and their customers,” he said. In other words, restaurants need someone to deliver the actual food but not necessarily own the order and payment process or the customer relationships (and data). Lyft more or less said it’s aiming to create that delivery model.

Even just one year ago, making this model a successful play for restaurants on a widespread basis would have been a long shot. The technical logistics of delivery are complex. A sophisticated mobile order app a la Starbucks would cost a restaurant tens if not hundreds of thousands of dollars to make. Apps have to allow users to browse a menu and order meals, and they have to be secure around processing payments and storing customer data. With a few exceptions, using a third-party delivery platform for this piece of the delivery stack has historically been the easiest and most cost-effective path for restaurants.

In the early days of the pandemic, restaurants had to either accept this situation and use a third-party delivery platform’s entire stack or risk going under. (A lot of them went under anyway.) But over the last few months, a number of different options have surfaced that allow restaurants to power their own digital storefronts and only rely on delivery services for the last mile. ChowNow, Toast, Lunchbox, . . . the list gets longer each month. Each of these services offers the ability to power a branded storefront through which the restaurant maintains the direct relationship with the customer but doesn’t have to go out and build a mobile order app from the ground up. Most of these services also partner with the major delivery platforms, who still handle the last mile. Restaurants would still have to pay a small commission fee for the actual delivery, but it’s drastically lower than the 30 percent it can reach to when using the full stack.

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Lyft’s comments at its earnings call this week suggest the company is ready to capitalize on this trend. Imagine a restaurant using a system like ChowNow’s to power its mobile ordering and payments. The restaurant controls the branding, menus, prices, and customer relationship. Integration with Lyft’s software would mean once an order is placed, a Lyft driver would retrieve the food and drop it with the customer. Lyft is also well-established across the U.S. and claims to have more than 1 million available drivers, so its existing user base could make it additionally attractive to restaurants and their customers.

The question is whether this approach could differentiate Lyft enough to make much of a difference. After all, restaurants nowadays can approach a similar delivery model by processing orders through a company like ChowNow then letting an established delivery player like DoorDash handle the last mile. Lyft would have to offer ultra-competitive rates on commission fees and an extremely wide delivery radius to make itself stand out.

Zimmer said on this week’s call that it was still “early days” for this concept, though Lyft already has a partnership with Grubhub for a separate initiative. But between the pandemic, Prop 22, DoorDash’s insane growth numbers, and all sorts of other controversies, the need for a new delivery system gets more urgent for restaurants each week. This one might be a viable option. 

Driving Towards a New Kind of QSR

Meanwhile, over in QSR realm, big-name brands appear to be ditching the dining room en masse for the long term. If you had any lingering doubts about that, look to the last few month’s developments in the space:

  • Wendy’s struck a deal with Reef to kickstart its ghost kitchen strategy. The brand is also considering drive-thru-only store formats
  • Chipotle announced plans for a new store format that is essentially a ghost kitchen with a pickup area. This follows the brand’s efforts to double-down on its drive-thru strategy.
  • McDonald’s unveiled a new store design that consists of a kitchen facility surrounded by drive-thru lanes and a few parking spaces for curbside pickup.
  • Restaurant Brands International, which owns Burger King, Popeye’s, and Tim Horton’s, will modernize its drive-thrus to encourage more digital orders and off-premises meals.
  • Burger King also has a new store design that features a kitchen hanging over drive-thru lanes and a conveyor belt that delivers the food to customers.

The credo behind all of these developments is the same: make it faster, more efficient, and as free of human-to-human contact among strangers as possible. As companies look to speed up wait times and pandemic-proof themselves, we can expect the modernization of the drive-thru — and the death of the QSR dining room — to continue.

The Leading Food Tech Expo is Back on January 11th!

Food Tech Live is back for its third year! This year we’re going virtual and will have a full day of product showcases and programming. Get your free ticket here and, if you want to grab a virtual booth to show off what you’re building for 2021, let us know!

Restaurant Tech ‘Round the Web

NY Gov. Andrew Cuomo announced new restrictions for bars and restaurants that went into effect on Friday. All establishments licensed by the State Liquor Authority must close dining areas at 10 p.m. Only curbside pickup will be allowed after 10 p.m. Cuomo also said that if these measures don’t slow the spread of COVID-19, NY will consider reducing indoor dining capacity.

Third-party delivery service Caviar announced this week it has expanded to three new markets. The Grubhub-owned service is now available in Austin, Texas; San Diego, California; and Miami, Florida, according to a press release sent to The Spoon. 

Dunkin’s line of holiday swag is back. This time it includes bedding, which may or may not be a sign that the world really is going to hell.

 

Could Restaurants Hitch a Lower Cost Delivery Ride with Lyft?

If you ever want to get my colleague, Jenn Marston fired up, just bring up the topic of third-party delivery commissions. Sure, Uber Eats, DoorDash and GrubHub may make delivery easier for a restaurant, but they do so at a high price, charging as much as a 30-percent-per-transaction commission on orders. For an industry like the restaurant biz, which is built on razor-thin margins, that’s just not tenable.

So we took note when Lyft said this week that it might get more into the meal delivery game, but do so at a much lower cost to the restaurants. As Restaurant Dive reports, Lyft could do this by eliminating the consumer facing app and acting solely as a delivery mechanism.

In this scenario, a customer would not go through the Lyft app to find a restaurant and order from it. Instead, the order would be placed directly through the restaurant’s website or app, and Lyft would just provide the drivers (of which it has more than 1 million).

Hybrid delivery strategies like this, where the restaurant owns the ordering and customer relationship and a third-party does the driving, aren’t new. DoorDash launched a couple of high-profile hybrid delivery partnerships with Little Caesar’s and Outback Steakhouse, for example.

A high-profile company like Lyft jumping into delivery could help push hybrid strategies more into the mainstream. And since Lyft wouldn’t be charging high commissions begin with, they could avoid revenue hits from delivery fee caps that have been put in place in various cities around the U.S. during this pandemic.

Obviously all of this is just talk from Lyft right now. If the company is moving at all in this direction, it’s still in the early stages. But just as with Uber, Lyft’s main ridesharing business has been decimated by the pandemic, so there is an urgency for the company to open up new lines of revenue. Uber piloted a commission-free delivery program earlier this year, but the orders still flowed through the Uber app.

The advantage for a restaurant using a hybrid strategy like the one Lyft is suggesting, is that the restaurant gets to keep more money and all of that customer data. But the downside is that it has to have the means to create its own online ordering presence. That’s made easier thanks to services like Chowly and Toast, but then restaurants still need to market its online presence and get people to not use a marketplace app like Uber and DoorDash.

There are still a lot of details to be figured out about any restaurant program Lyft might put into place, but if it saves restaurants money, well, that’ll be enough to get Jenn fired up.

Grubhub Partners With Lyft to Offer Lyft Pink Members Delivery Perks

Grubhub announced today it has inked an exclusive partnership with rideshare service Lyft to offer the latter’s Lyft Pink members complimentary access to Grubhub+, according to a press release sent to The Spoon.

Lyft Pink is the rideshare service’s membership program that offers riders perks like priority airport pickup, discounts, and bikes and scooters. The free Grubhub+ membership (which normally costs $9.99/month) will add further items to that list, including free unlimited delivery, discounts on meals, and donation matching for contributions made to Grubhub’s Community Relief fund.

Grubhub launched Grubhub+ earlier this year, following in the footsteps of other third-party delivery services that offer membership programs, like DoorDash’s DashPass membership and Uber Eat’s Eats Pass. And much like DoorDash’s DashPass-Amex partnership from earlier this year, Grubhub’s teaming up with Lyft subscribers gives the delivery service access to an even wider base of potential customers.

For Lyft, the partnership could be a much-needed boost at a time when the pandemic has devastated the rideshare business but built up the food delivery sector. Uber, for example, has said its Eats business is now its main money maker. While the Lyft-Grubhub deal is slightly different, since Lyft does not own Grubhub, the rideshare service may still see the partnership as an opportunity to bolster its flailing numbers. With COVID-19 cases rising again and the threat of shutdowns for non-essential businesses looming, Lyft will need new customer acquisition channels outside its ride share business for some time to come.

Grubhub, meanwhile, was the center of a bidding war earlier this year, with food delivery mega-company Just Eat Takeaway.com finally winning out and buying the service for $7.3 billion. Grubhub and other third-party delivery services also remain at the center of many a controversy — commission fees, worker classification, non-partner restaurants. That makes wider access to Grubhub through deals like Lyft and Just Eat Takeaway.com beneficial for customers but not necessarily great news for restaurants. 

Updated: California Judge Orders Uber and Lyft to Reclassify Drivers as Employees

UPDATE: Uber CEO Dara Khosrowshahi said the company would probably shut down operations in California temporarily if this week’s ruling is not overturned. However, that would only apply to the company’s rideshare business. An Uber spokesperson confirmed to Eater that the company “has no plans to cease California operations of Uber Eats.”

PREVIOUSLY:

A California judge late Monday ordered that Uber and Lyft must reclassify their drivers as employees. This preliminary injunction is stayed for 10 days, during which time Uber and Lyft can file an appeal. Both companies have said they will do so.

This week’s order comes after California Attorney General Xavier Becerra and city attorneys in California sued Uber and Lyft in May for allegedly treating their workers as contractors. The suit alleged that these companies were in violation of AB5, which went into effect in January of this year. Under the law, gig economy workers (including food delivery couriers and drivers) must be classified as employees and given access to benefits like sick leave, unemployment, and workers comp.

Uber, Lyft, and other gig worker companies have already funneled substantial resources into challenging AB5. In December of 2019, Uber and Postmates filed a complaint (which was later rejected) alleging the law violates constitutional rights. DoorDash, along with Uber and Lyft, has vowed to spend millions to get a ballot measure in 2020 that would counteract AB5. And these tech companies have argued ad nauseam that their workers want to be independent contractors and that their services are exempt from the law on the grounds that they are platforms, not transportation companies. 

California Superior Court Judge Ethan Schulman wrote in this week’s ruling that such logic “flies in the face of economic reality and common sense… To state the obvious, drivers are central, not tangential, to Uber and Lyft’s entire ride-hailing business.”

That third-party food delivery services stand on the same side of the AB5 argument as rideshare companies is no surprise. The third-party delivery model relies on workers to transport food from restaurants to customers’ homes. Having to pay workers things like health benefits and paid sick leave would undercut the entire third-party delivery model, adding extra costs for the likes of Uber and DoorDash, and ultimately slowing their still-elusive path to profitability. 

Uber went as far as to say that if this week’s injunction stands, it may have to exit California. Assuming that would apply to both its rideshare business and its Eats operation, that would erode the company’s recent deal to acquire Postmates, a service that’s most popular on the west coast. 

No other state has yet moved so aggressively to get gig workers reclassified. But thanks to COVID-19, much light has been shed on workers’ access to things like health benefits or even paid sick leave and unemployment during a global crisis. In March, a New York Court ruled that Postmates couriers are employees and therefore eligible for unemployment. In the same month, Instacart revamped its benefits for drivers after workers threatened to strike.

You can read this week’s ruling in full here. If it stands, and Uber and Lyft are unsuccessful in their appeals, the order could have a ripple effect across other states in the U.S.

Food Tech News: CRISPR Blackberries and a New Nordic FoodTech Fund

Are you baking bread this weekend? (Hot tip: Even if you can’t find yeast at the store, there’s a simple way to make your own at home.)

In between your dough prooves is a great time to catch up on your latest dose of food tech news. This week we’ve got stories on fresh varietals of gene-edited berries, a new Nordic FoodTech VC fund, Burger King’s trouble over its plant-based burger ads in the UK, and more.

Pairwise partners to breed new type of berries
Agriculture and biotech company Pairwise forged a partnership with Plant Sciences Inc (PSI) this week to create new types of berries (via WRAL TechWire). Financial terms of the deal were not disclosed. Pairwise uses CRISPR gene editing to develop new varietals of food that are optimized for nutrition, have longer shelf lives or grow more quickly. First up, Pairwise and PSI will focus on black and red raspberries, as well as blackberries. They’re hoping to have their first round of berries on shelves within the next few years.

Lyft launches delivery program for orgs affected by COVID-19
Rideshare and last-mile logistics company Lyft launched a new COVID-19-related initiative this week. Essential Deliveries is a program that partners with businesses and nonprofits to help them deliver staple goods like groceries, prepared meals, and cleaning and medical supplies (h/t Techcrunch) to consumers. Partners can tap into Lyft’s platform to set up deliveries or schedule rides. The program will be available in at least 11 cities nationwide and drivers will be alerted about the nature of the goods they’re delivering. All deliveries will be contact-free.

Nordic FoodTech VC launches with €24.55 million
Nordic FoodTech VC, a new venture fund targeting early-stage tech companies making the food system more sustainable and nutritious, has launched this week. The fund will begin investing with €24.55 million ($26.7 million USD) in capital. It’s the first fund in the Nordic countries and plans to invest in “dozens” of companies innovating to improve the global food system.

Burger King’s Rebel Whopper (Photo: Burger King)

Burger King’s plant-based Whopper ads banned in UK
Three ads from Burger King in the UK promoting its Rebel Whopper have now been banned by the UK’s Advertising Standards Authority. Burger King launched the Rebel Whopper, which features a plant-based burger from Unilever-owned Vegetarian Butcher, back in January 2020. Since then, complaints came in stating that the ad was misleading consumers by suggesting that it could be eaten by vegetarians, vegans, and people with egg allergies, despite the fact that it’s cooked on the same grill as meat products and features mayonnaise. The ASA has sided with the complaints, stating that the small print at the bottom of BK’s ads stating that the Rebel Whopper is cooked alongside meat products was not sufficiently in informing consumers.

Lyft Will Deliver Meals to Seniors and Kids to Help During COVID-19 Crisis

Ridesharing company Lyft announced a number of new initiatives over the weekend to help combat problems arising from the continued COVID-19 crisis. That includes meal delivery for those in need.

In a corporate blog post last Friday, Lyft outlined the new steps it was taking:

Supporting delivery of meals for kids and seniors in need: Students who receive free or subsidized lunch at school and home-bound seniors have been heavily affected by shelter-in-place advisories. To meet crucial food access gaps, Lyft is working in partnership with government agencies and local non-profits. Starting with a pilot in the Bay Area, drivers will be able to pick up meals from distribution centers and deliver them without contact to individuals in need. We are working to quickly scale this program throughout California and across the country. 

As schools have been forced to close amid the global pandemic, there is ongoing concern about how kids in low-income areas will get fed. In response, schools have been creating grab-and-go meals, but those still need to get to the kids, something that isn’t easy when parents have to work (and fear losing their jobs). Lyft stepping in like this could provide a great community service.

Lyft also said it was activating its LyftUp program, a partnership with public heath entities, non-profits, governments and community organizations to provide additional assistance to serve populations in need. Through LyftUp Grocery Access Program, Lyft will be providing rides “to and from grocery stores in food insecure areas.”

Lyft is among a number of companies stepping up to serve the most vulnerable populations at this time. In Atlanta, Goodr has been working with schools to deliver meals to 40,000 students in that school district.

In addition to food related activities, Lyft also launched programs to assist with the delivery of medical supplies, and non-emergency medical transportation for low income individuals.

While Lyft, the company, announced these initiatives, it’s important to remember that it ain’t the C-level execs or hardware engineers or marketing teams that will be driving around and delivering meals. It’s the everyday contractors who are literally on the front lines of this epidemic. If you are still using ridesharing services (we assume you’re only leaving your house to get groceries), and are able — tip generously.

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.

Thanks to Uber and Lyft, Rideshare and Restaurant Experiences Are Becoming Inseparable

More and more it’s looking like food-related programs are what will help rideshare companies generate more loyalty from both drivers and customers. At least, that’s what Uber and Lyft would have us believe with their respective activities of late, which have been heavily focused on merging rideshares and restaurants into a single experience. And news from Uber today only emphasizes that fact more.

Uber announced this morning a nationwide expansion of its rewards program for food delivery couriers, Uber Eats Pro. The program, which is currently in beta, lets those delivering food via Uber Eats earn points and unlock rewards that include cash back on gas, roadside assistance, some car maintenance costs, and even college tuition. As of now, Pro is available in more than 200 cities to Uber Eats workers, according to an email sent to The Spoon.

Upon signing up with the Uber Eats Pro program, drivers and cyclists automatically become a partner. With each delivery a person makes, they earn points that help them unlock rewards from Uber. Those who maintain a 95 percent or above satisfaction rating from restaurants and customers can achieve different status levels to unlock bigger rewards over time, like roadside assistance and 100 percent tuition coverage at Arizona State University Online. Uber has also partnered with Subway to provide daily refreshments, from drinks to sandwiches, which also increase with a Pro user’s status.

More than anything else, Pro’s expansion seems to be aimed at enticing gig workers to stay loyal to the Uber ecosystem, much as any company uses so-called perks to woo employees. With Pro, the more orders a courier delivers, the closer they get to the more substantial rewards like college tuition. Taking time to make a delivery for a rival service, like Lyft, would only slow down that goal.

Not that Lyft is standing still. That service may not have its own food delivery wing, but it is starting to offer its own set of initiatives for food service workers, too. Last week, Washington, DC-based fast-casual chain &pizza unveiled its Lyft for Late Nights program, which offers &pizza employees discounted rides late at night. On Fridays and Saturdays between 11 p.m. and 5:30 a.m., &pizza employees can take a Lyft for a flat fee of $4.50.

Though the program is still in test phase and only available at seven locations currently, it’s another example of rideshare companies and food-oriented companies coming together to offer workers more perks that keep them happy on the job and locked into the rideshare ecosystem.

This tactic of using perks to increase loyalty isn’t just for workers, either. Both Uber and Lyft have tested initiatives in the past that offer perks to diners that ultimately would keep them tied to that particular rideshare service. In 2017, Lyft attempted a partnership with Taco Bell for the ill-fated Taco Mode program, where users could hit the restaurant chain’s drive-thru en route to another destination.

More palatable have been Uber’s efforts of late. In April, the company announced Uber Vouchers, a program designed to get more foot traffic into restaurants by essentially helping rideshare users to pay for their trip to the restaurant. In September, Uber said it would merge Uber Eats and its main app.

Integrating food — a vital part of life — more deeply into these services would seem like a surefire way to attract more customers. As the outdated saying goes, the way to a man’s heart is through his stomach.

But all these efforts also come at a time when rideshare companies still struggle with profitability. On its most recent earnings call, Uber posted $5.2 billion in losses. Lyft, too, is still hemorrhaging money. Meanwhile, the fight over AB 5 in California, which would reclassify gig workers as employees and upset the entire business model, is hotter than a five-alarm fire. Whether adding more perks for customers and employees can douse flames that high remains doubtful.

Food Tech News: Lyft Discounts Grocery Trips, (Plant) Life on Mars

Happy Saturday, all. Before you head off to kids’ soccer games or boozy brunches, catch up on this week’s food tech news roundup. We’ve got stories about Lyft discounting rides to help folks in food deserts have better access to fresh product, Pizza Hut trying out vegan cheese, and a new concept for a hydroponic farm on Mars.

Lyft offers discounted rides to grocery stores
Rideshare company Lyft is partnering with nonprofit Martha’s Table to launch a new initiative connecting people to fresh food (h/t Pymnts). Called the Grocery Access Program, Lyft will offer discounted rides to and from supermarkets to families living in two (undisclosed) neighborhoods in Washington, D.C. that don’t have ready access to grocery stores. Next up, the rideshare giant plans to roll out the program in more cities like Atlanta, Chicago, and Los Angeles.

Photo: Dartmouth.

Design for Martian Greenhouse wins NASA award
A team of Dartmouth students has won NASA’s 2019 BIG Idea Challenge with their design for a greenhouse that can grow food on Mars (h/t Futurism). The hydroponic dome, which is equipped with a tank of nutrient solution and LED lights, would be able to grow up to eight crops, including kale, sweet potato, soy, strawberry, and wheat. Students estimate that it could create enough food to feed four astronauts 3,100 calories per day over 600 days. Bonus: It could fit in a single 20,000 pound package.

Did we miss anything new? Tweet us @TheSpoonTech!

Selling Snacks to Add Revenue for Rideshare Drivers and Airbnb Hosts

There was a strong ethos of community when startups like Lyft and Airbnb helped kickstart the “sharing economy.” Lyft had passengers sit in the front seat and fistbump their drivers, and Airbnb CEO Brian Chesky once remarked that his company was “in the business of meaningful experiences.”

But it looks like the kumbayah days of simply renting your spare room or backseat for some extra cashe are giving way to the capitalist world we are all familiar with. One where in addition to paying for your space, guests and passengers pony up for snacks, treats and other sundries.

Yesterday, Cargo, a startup that lets rideshare drivers sell snacks from the front seat of the car, announced that it had raised $5.5 million. Cargo is basically a container that straps to the center console. Inside are things like snack bars and breath mints–stuff you see at the counter of a convenience store. Passengers can use their mobile phone to order and pay for desired items.

According to TechCrunch, the company is in 2,500 cars on the road in NYC, Chicago, Boston and Minneapolis — with 20,000 drivers signing up for the service from all around the U.S.. Drivers get a commission and evidently earn on average an extra $100 or so a month. So wherever you are, you’re bound to encounter upsells in your Uber relatively soon.

Then there is Qvie, a company we looked at earlier this month. Qvie is a small vending machine that you can put in your Airbnb to offer wine or snacks to guests. The Qvie is just a single-item vending machine right now, but as Mike Wolf pointed out, it’s not hard to imagine them coming out with something closer to an unmanned store offering up a variety of items.

To be clear, both of these ideas seem like good ones. There have been a few times when I’ve wished for a breath mint while on a ride to a meeting. And if you’re going to rent your home out, it makes sense to offer up snacks or items people may have forgotten (toothpaste, band-aids, etc.), though I’m not sure of the legality of selling wine in your house.

But both Qvie and Cargo point to a whole selling ecosystem rising up inside the sharing economy to add incremental sales for owners and convenience for customers. Plus, consumer packaged goods companies will also want this sales data to better understand buying patterns of their products. These vending systems will get better and smarter and more prevalent.

I mean, it’s not that ridiculous to think that Domino’s will get into this game and somehow combine its pizza oven car with an Uber for a piping hot pizza pie available to grab as you arrive home after a night out. Which, when you think about it, is totally worth a fistbump.

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