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The Spoon

Daily news and analysis about the food tech revolution

Postmates

Uber Q4: Delivery Up 150% Year-Over-Year as It Expands Beyond Restaurants

Uber unveiled its earnings this week for the fourth quarter of 2020. Its food delivery business remains the strongest part of the business, a point hardly surprising since we’re still in the midst of a pandemic and restaurant dining rooms remain closed in many places.

A few of the latest stats, according to the company earnings call yesterday, include:

  • Uber reported $3.17 billion in total revenue from October through December, 2020.
  • Q4 gross bookings for delivery grew 128 percent and reached a $44 billion run rate in December.
  • Revenue “more than tripled” from last year and grew 19 percent compared to the third quarter of 2020.

On this week’s call, Uber CEO Dara Khosrowshahi also called out Uber’s plans to expand delivery into areas beyond traditional restaurants. “It’s become clear that the pandemic has increased consumers’ appetite for on-demand delivery of not just food, but all goods, and we take a major step to address this enormous opportunity,” he said.

Recent(ish) acquisitions by Uber support that statement. At the end of 2019, the company acquired majority ownership of online grocery Cornershop and in 2020 expanded its grocery delivery services. Uber’s more recent $2.65 billion acquisition of rival service Postmates gives it access to the latter’s delivery-as-a-service business that connects customers with Walmart, 7-Eleven, Apple, and other stores. Just last week, Uber also nabbed alcohol-delivery service Drizly.  

“These new initiatives will remain an investment priority going forward,” Khosrowshahi said on the call.

Overall, Uber’s losses are narrowing. For all of 2020, net losses totaled $6.77 billion, which is a roughly 20 percent improvement from the $8.51 billion in 2019.

Uber Eats Launches Campaign to Support Independent Restaurants

Uber today announced Eat Local, a campaign the company says will support independent restaurants financially impacted by the COVID-19 pandemic. 

As part of the Eat Local package, Uber will donate $4.5 million to the Local Initiatives Support Corporation (LISC), which will in turn distribute financial assistance to U.S. restaurants facing COVID-19-related challenges. Restaurants must be on the Uber Eats and/or Postmates platforms to be eligible. 

According to the LISC website, the applications process for grants opens on Feb. 16. The grant program will offer to help restaurants meet certain expenses, such as payroll, rent, utilities, outstanding debts to vendors, and upgrading technology systems. 

Restaurants must have been active on Uber Eats or Postmates since Jan. 1, 2021 in order to be eligible for the grant. Businesses must also have less than five locations and not be affiliated with a national brand. (The full list of eligibility requirements is on LISC’s site.)

In keeping with earlier relief efforts from 2020, Uber’s Eat Local package also includes waived and reduced fees for restaurants around restaurant pickup orders and for orders placed via a restaurant’s own website but delivered by Uber Eats. Restaurants can get daily payouts instead of the standard weekly ones, and Uber will also continue matching donations made by customers via the Eats app’s Restaurant Contribution feature.

Uber (and newly acquired Postmates) along with Grubhub and DoorDash first began offering relief packages for restaurants back in March 2020, when shelter-in-place mandates first went into effect in the U.S. Since then, these services have launched various grant programs and assistance efforts, including Grubhub’s Winterization Grant and DoorDash’s ongoing Main Street Strong program.

All of these efforts go some ways towards helping small and independent restaurants, which have been most damaged by the pandemic. What remains unclear is how much grants and relief efforts help when stacked up against the high commission fees third-party delivery service continue to charge these smaller restaurants. That factor remains likely to be a point of heated debate long after the worst parts of the pandemic have subsided.

Uber Lays Off More Than 180 Employees of Postmates

Uber has laid off about 15 percent, or roughly 185 people, from its Postmates division, according to a report this weekend from the New York Times. The layoffs come just a couple months after Uber completed the $2.65 billion acquisition of the rival delivery service.

The NYT noted that the cuts are part of the integration process of Postmates with Uber Eats. On the front, consumer-facing end, Postmates will still function as its own app, separate from Eats. However, it will now share back-end infrastructure with Eats’ existing technologies and operations.  

Postmates founder Bastian Lehmann is among the individuals that made a decision to depart the company. Other executives “will leave with multimillion exit packages,” according to NYT sources, who added that more exists could be possible in the coming months. 

For now, Eats remains Uber’s key money-making business, having overtaken the company’s ride-hailing service last year in terms of revenues. The pandemic, of course, helped the popularity of the Eats Business as more consumers stayed home and ordered delivery and the restaurant drastically shifted focus to off-premises formats in response.

Because of that shift, food delivery is more popular than ever, and Uber faces significant competition from services like DoorDash, which went public in December, and Grubhub, which was recently snapped up by global delivery service Just Eat Takeaway.com.

To remain competitive, Uber has made a number of cuts in recent months to parts of its business. For example, it got rid of its autonomous vehicle division and is spinning off Postmates’ robotics division into a separate entity.

Update: An earlier version of this story said that Postmates founder Bastian Lehmann was laid off. Lehmann has made the decision to depart the company on his own, according to an Uber spokesperson.

Top 3 Tech Trends for QSR Redesigns

This is the web version of our weekly restaurant tech newsletter. Sign up today to get updates on the rapidly changing nature of the food tech industry.

The “next-generation” restaurant format isn’t new, as QSR brands like Dunkin’ and McDonald’s can attest. But the restaurant industry’s sudden and in many ways irrevocable shift to off-premises formats in 2020 certainly increased both the number of restaurants revamping their store formats and the speed at which they are doing so.

Those revamps come in many forms and features: BK’s floating kitchens, Applebee’s adding drive-thru lanes, everyone’s near lack of dining room space, to name a few.

And since everyone from Sonic to Del Taco seems to be announcing some kind of format revamp — physical, virtual, or both — these days, I thought it’d be worthwhile to round the top common denominators up to get a hint at which tactics will likely become widespread across the restaurant biz in the near future.

Herewith, are my top three QSR redesign trends:

More Curbside Pickup Spots

Digital order/payment capabilities are a must-have for restaurants now, and this technology coupled with curbside pickup is something we will see a lot more of in the near future. 

For many restaurants, offering curbside pickup options is cheaper than building out a drive-thru lane and window. Outside of the technology, all a restaurant needs is to dedicate a few parking spots close to the building, some signage, and a staff person to run the orders out. Bigger brands may have the money to retrofit their existing stores with drive-thru, but for many mid-size and smaller restaurants, curbside is a more realistic option when it comes to fulfilling more off-premises orders.

For customers, digitally enhanced curbside pickup is increasingly seen as a cheap, fast alternative to delivery, which is getting more expensive for customers. (More on that in the next section.) 

Curbside tech itself is getting some improvements to make the method faster and more efficient, Panera’s geofenced curbside initiative from 2020 being the obvious example. While efforts like these are the anomaly right now, more chains will adopt them and other curbside tech in the coming months.

Drive-thrus, Cruise-thrus, Chipotlanes

On the other hand, those that can swing the cost of adding a drive-thru should do so. 

Some chains, like Applebee’s, are testing out the drive-thru concept for the first time. Chipotle is another good example of a restaurant chain that never offered the format before and has now shifted its entire strategy to accommodate more “Chipotlanes.” Ditto for Sonic, a restaurant better known for drive-ins than drive-thrus, and Pokeworks forthcoming “cruise-thru.”

Others, like QSRs that have always offered drive-thru, are expanding the format. Literally. Double, and triple drive-thru lanes, with some dedicated solely to mobile orders. are becoming the norm at the KFCs, Dunkin’s, and BKs of the world.

The common denominator of this common denominator is that tech is integrated into most of these drive-thru concepts, whether that’s through accommodating more mobile app orders or uses of artificial intelligence to improve order accuracy and upselling.

Mobile-Only Zones and Dedicated Delivery Areas

As anyone who’s been in a drive-thru line lately knows, restaurants are struggling to fulfill the influx of off-premises orders quickly. Many restaurants are addressing this by dedicating certain drive-thru lanes to mobile orders and for delivery drivers picking up orders. Some, like Dunkin’, have done this for years. Others, like Shake Shack, are new to the concept. Still others, namely Pokeworks, have taken the concept one step further and do not accommodate onsite ordering in the drive-thru lane at all.

Meanwhile, to keep third-party delivery drivers waiting on orders from taking up all the curbside spots, many restaurants are also building dedicated areas for delivery pickups. Del Taco, for example has both dedicated drive-thru lanes and pickup shelves for delivery orders.

None of the redesigns discussed above have been widely deployed yet; we can expect more of that in 2021. At that point, new standards for store designs will start to trickle down from the major brands listed here to mid-sized and smaller ones, further cementing the role of off-premises across the restaurant industry.

Postmates: the Latest Delivery Service to Raise Its Prices Post-Prop 22

After saying prices would remain the same for customers following the successful passing of Proposition 22, Postmates has now raised those same prices as high as $2.50 per order.

Postmates’ about-face follows similar price increases from Uber and DoorDash, according to a report from Eater San Francisco. It’s also a contradictory to the tagline these companies were pitching in the ramp-up to the Nov. 3 election—that Prop. 22 passing would allow them to continue operating in California and that prices for customers would not increase.  

Prop. 22 passed in a 58 to 42 percent vote, which allows gig-economy the aforementioned companies to continue classifying their workers as independent contractors. Translation: Uber et al. do not have to pay worker benefits like healthcare, workers comp, and sick leave.

The delivery companies said that they would offer their own benefits package to workers that include a stipend for healthcare. The recent price hikes appear to be geared towards paying for those benefits. For example, the Postmates website calls it “the California Driver Benefits fee” and says that it “helps us fund the new benefits offered to drivers thanks to the passing of Prop 22.” 

All of this feels pretty inevitable, to be honest. After all, one could hardly expect companies that are now infamous for predatory and dishonest business practices to subsidize workers’ benefits out of their own pockets. It’s just a shame more voters didn’t reach that conclusion before clicking “Yes” on the Prop. 22 measure.

Restaurant Tech ‘Round the Web

Part of the plan President Joe Biden has issued to combat coronavirus includes providing clear, national guidelines for restaurants on how and when they can operate. Clear national guidelines would be developed around the safety of workers as well as things like restaurant capacity restrictions.

Olo partnered with customer feedback tech platform Tattle in order to improve the process of collecting restaurant guest feedback for off-premises orders. Tattle will integrate with the Olo platform to provide restaurant guests with a digital survey they can take after ordering from a restaurant.

Pathogen control tech company UV Angel has partnered with McDonald’s franchisees in Texas and Illinois to equip locations with proprietary ultraviolet light surface and air technology. UV Angel says its tech targets pathogens at the room level (as opposed to at the building level), which the company say is more effective in fighting airborne and surface-borne bacteria, viruses, and fungi.

Report: Uber Looking to Spin Off Postmates X Delivery Robot Biz

As part of its acquisition of Postmates last year, Uber got into the delivery robot business. Now, according to a report in TechCrunch, Uber is planning to get out of the robo-biz by spinning off Postmates X (the robotics division of the company) into a separate company.

From TechCrunch:

Postmates X, the robotics division of the on-demand delivery startup that Uber acquired last year for $2.65 billion, is seeking investors in its bid to become a separate company, according to several people familiar with the plans.

The new spinout is being called Serve Robotics, named after the companies’ autonomous, cooler-sized Serve robot, which was making deliveries in Los Angeles throughout much of 2020. More recently, Postmates Serve was enlisted by the Pink Dot market to make deliveries in West Hollywood.

TechCrunch reports that Serve Robotics would retain the IP and assets, and Uber would keep a 25 percent stake in the company.

Given how the COVID-19 pandemic is pushing restaurants and grocers to adopt more contactless delivery methods, it may seem like an odd time for Uber to get out of the delivery robot business.

As we’ve been chronicling, autonomous delivery robots are popping up all over the globe. Starship has been doing deliveries on college campuses for more than a year, and expanded to grocery delivery in Modesto, CA. Kiwibot partnered with the City of San Jose for robot restaurant deliveries there. Then there’s Yandex in Russia, Delivers AI in Turkey, and Woowa Brothers in Seoul, South Korea.

But as Uber CEO Dara Khosrowshahi recently explained on Kara Swisher’s Sway podcast, his company is in the networking business. Khosrowshahi doesn’t think Uber needs to create the technology uses, it just needs access to the best technology that allows it to facilitate deliveries and ridesharing. That’s one reason Uber offloaded its autonomous driving unit at the end of last year.

While the use of robotics is definitely on the rise around the world, there are still a lot of hurdles to overcome before they become mainstream. Regulations and production scale are two biggies. Right now there are a patchwork of rules around autonomous delivery that vary from city to city and state to state. Even as those get ironed out, scaling robots to a number where we see them across the country is still a huge undertaking.

Uber pushing those issues off on to a separate company means Uber can focus more on its own delivery and ridesharing businesses. Uber can then just license the robot technology to facilitate its food delivery.

Pink Dot Using Postmates’ Serve Robot to Delivery Food in West Hollywood

Residents of the Los Angeles neighborhood of West Hollywood shouldn’t be surprised if they see bright pink robots zipping along its sidewalks soon. Local market Pink Dot is now using Postmates’ Serve bot to make food deliveries in that part of town.

WehoVille reports that Pink Dot started using the robots last Thursday and that it is the only business using robots for deliveries in that neighborhood. Customers ordering food from Pink Dot through Postmates will have the option of choosing either a human or a robot make the delivery. When the robot arrives at a home or building, the customer will get a text message saying its food is there along with a special code to unlock the robot to retrieve their order.

Pink Dot is using three robots (named Pinky, Dotty and Solly), and the whole program is currently a three-month test. A human will still escort robots out on deliveries to help with any problems that arise, but those humans are hanging back to also see how people interact with the robots as they pass by (Pink Dot is giving out hats if you snap a selfie with the robot).

The robot deliveries from Pink Dot are also free of charge, as opposed to the $5 – $10 fee that comes with humans making the deliveries. This free robot service should help kickstart adoption, but we’ll have to see if a fee is implemented if robots delivery becomes more widespread.

It should be noted that this robot delivery program is happening right on the heels of Uber completing its acquisition of Postmates. While Uber has dabbled in drone delivery, it hasn’t really talked publicly about sidewalk robot delivery. But Uber Eats is currently the revenue generator for Uber, and anything that could help bring costs down for burrito deliveries is something Uber will be interested in.

One interesting aspect of this Pink Dot + Postmates delivery deal is that the robots are being co-branded by Pink Dot. So these robots won’t be serving any other restaurants or markets in the area. This also means that they’ll be advertising Pink Dot as they are out and about. Kiwi robots, which started rolling out in San Jose this past summer, have Kiwi branding and serve multiple restaurants in different neighborhoods there. Starship’s robots, which are making grocery deliveries in Modesto, CA, also carry their own Starship branding.

We bring it up because delivery robots are still an emerging business and there are questions around business models that make the most sense. Should robots be part of a third-party delivery fleet serving many restaurants, or leased directly to one restaurant/grocer for its own use?

Whether or not a robot is being leased by a particular establishment is also important because it speaks to the infrastructure needed to implement robot deliveries. If the robots are Pink Dot’s, then they will presumably live at that market, meaning they will wait and be charged there until they leave to make a delivery. If robots serve multiple restaurants, that raises questions about where the robots stay when they aren’t in use and where they are charged. For example, will they clutter city sidewalks?

We sent a note to Postmates with some follow up questions and will update this post when we hear back.

For those in WeHo who want to get a glimpse of the future, Pink Dot’s robots are available for delivery now, but only during daylight hours.

Prop 22’s Success Has Unsettling Implications for Third-Party Delivery’s Power

One certainty we woke up to yesterday is that California had passed Prop. 22, the controversial ballot measure aimed at keeping California gig workers independent contractors.

The success of the measure means that app-based companies like Uber, Lyft, DoorDash, and Instacart will be exempt from California’s AB 5 law, which requires businesses to classify gig workers as employees. And while tech companies’ Prop 22 victory is limited to California, it could have wide-reaching effects on how companies do business in other states and how they treat their workers.

Quick recap: Prop 22 was created in the wake of California’s Assembly Bill 5, which went into effect on Jan. 1 of this year. Under AB 5, employers must classify independent contractors as employees based on certain criteria, putting those companies on the hook to pay minimum wage, paid sick leave, health insurance, and other benefits. While AB 5 included some exemptions, Uber, Lyft, DoorDash, and other app-based businesses were not among them.

Hence the fight. In the lead-up to Election Day, proponents of Prop. 22 — which was basically bankrolled by the aforementioned tech companies — argued that having to classify drivers as employees would reduce jobs, limit drivers’ ability to work for multiple companies and ultimately raise costs for consumers. Uber and other app-based businesses spent roughly $200 million on the ballot-measure, making it the most expensive in California history.

By contrast, Prop. 22 opponents spent less than $20 million. They have argued that Prop. 22 exploits workers and undermines job stability.

Had Prop. 22 been voted down, companies like Uber, DoorDash, Instacart, and others would have had to shift their business models, which have been essentially built on the backs of gig workers, or make good on their threats to leave certain states. Instead, Prop 22 passed, and now there’s concern of a ripple effect on laws in other states and on labor standards in general for delivery jobs. Contract workers save companies money, since employers aren’t having to shell out for benefits, so it’s an obviously attractive option for companies. But as EaterSF pointed out yesterday, there is concern that Prop 22 could “usher in a whole new era of businesses taking their labor disputes to voters, instead of resolving them with local or state agencies.”

In California, other industries may also see the successful passing of Prop. 22 as motivation to push for their own exemptions from AB 5. That would mean fewer protections for workers across more industries, and lower standards for labor and worker protections in general.

Speaking of those worker protections: As a concession, Prop 22 will grant some benefits, including a minimum earnings guarantee when a driver is engaged in a delivery or ride (not while they are waiting for a gig). However, Prop. 22 offers no protections to workers in terms of sick leave, unemployment, workers comp or the ability to unionize. 

This lack of protections was a major grief back in March, when the COVID-19 pandemic came Stateside. As one gig worker said at the time, “staying home won’t pay the bills,” even if making deliveries meant potentially spreading the virus or working while sick. That’s no less a catch-22 for gig workers now, with COVID-19 cases breaking record highs as we speak and many expecting the situation to worsen as we get closer to winter. 

Early in the pandemic, DoorDash, Grubhub, and Postmates set up financial assistance funds for workers diagnosed or quarantined because of COVID-19. However, those were short-term measures, and there is no guarantee these companies will offer a similar option if the situation around the pandemic worsens.

Looking ahead, does Prop. 22’s success this week embolden these third-party delivery services to continue their dominance over the future of food delivery? Will the deep pockets of Uber, DoorDash and others get to set the terms for what the delivery market becomes? After all, these companies haven’t exactly been beacons of trustworthy behavior. Do their policies get to become the long-term norm simply because they have more money to fight with?

Consider the commission fees restaurants must pay delivery services in order to use their platforms. These fees can reach as high as 30 percent per transaction and have been an ongoing source of grief since before the pandemic, eating into restaurants’ practically nonexistent margins. Right now, multiple cities across the U.S. have imposed mandatory caps on these fees for the duration of the pandemic. But those emergency measures won’t stay in place forever. And even were fee caps signed into law, it’s not unreasonable to assume delivery services would eventually fight them, via another ballot measure or some other means.

There are many other controversies involving third-party delivery, among them: listing restaurants on delivery platforms without their consent, worker tipping policies, bogus fees, and menu pricing. 

Above all else, Prop. 22’s success shows us that Uber, DoorDash, and the rest of them are willing to spend hundreds of millions of dollars to keep their existing business model — and therefore chances of profitability — intact. That Prop. 22 passed also shows that figuratively kicking and screaming, if accompanied by millions, can get you your own way. Given the untrustworthy history of these tech companies, that point doesn’t bode other areas of delivery that regulators and restaurant industry advocates are working to change.

   

In DoorDash We Trust?

It’s our weekly restaurant tech news wrapup!

Food delivery aggregators: love ‘em or hate ‘em, few would at this point deny that restaurants need them right now. Maybe that’s not where we’d like to be as a restaurant industry, but it’s where the pandemic has forced businesses — a point underscored by new survey data from tech company Raydiant. According to the new report, which surveyed restaurant operators and managers, 37.5 percent of restaurants would not have been able to stay in business without third-party delivery apps over the last several months.

But not all third-party delivery aggregators are equal in the eyes of restaurants when it comes to trust. Arguably the most interesting part of Raydiant’s survey is the breakdown of which delivery service respondents “associated most with trust and support.” DoorDash won in a landslide, with 58 percent, followed next by Grubhub at 18 percent and Uber Eats at 17 percent. Seamless, which is owned by Grubhub, came in last, with a whopping 1 percent.

The report does not go into specifics as to how it defines “trust” and “support.” But a quick comparison of recent developments from these services illustrates why the names stacked up as they did in Raydiant’s survey. 

DoorDash was quick to respond to restaurant shutdowns when the pandemic came Stateside back in March, waiving fees for certain restaurant partners and setting up a relief fund for businesses. Since that time, the company — which is trekking towards an IPO — has positioned itself as an ally to struggling restaurants. Just earlier this week, it launched its Reopen for Delivery initiative, which will help shuttered restaurants rebrand as virtual concepts. The company is not without its controversies, but it’s managed to steer clear of major ones over the last several months.

Grubhub also responded speedily to the restaurant shutdowns — by making an opaque announcement that initially seemed to say it was waiving commission fees when in reality the service was only delaying collection of them. Grubhub has also racked up numerous complaints from restaurants, including bogus phone fees, outrageous commission fees, listing non-partnered restaurants, and this bizarre saga. 

Uber Eats and Postmates generate fewer controversial headlines, though they, along with DoorDash, also charge restaurants unsustainably high commission fees for every order placed through their platforms.

All this doesn’t mean restaurants should ditch their partnerships with the others in favor of working with DoorDash. Many agree that more is better when it comes to delivery aggregators these days. And like I said, we can hate on delivery services all we want, but the complicated logistics of delivery in 2020 makes them cheaper and faster for restaurants than any other solution that exists right now.

Nor, however, should restaurants hedge all their bets on third-party delivery services, which are definitely not hedging all of theirs on restaurants. Recent moves by both DoorDash and Uber Eats into grocery delivery make clear that these services will go where there’s money to be made. Online grocery sales are expected to hit $250 billion by 2025. The restaurant industry, meanwhile, has already lost billions of dollars due to the pandemic.

Simultaneously, new approaches to restaurant delivery are emerging that bring ordering, branding, and sometimes even the drivers back into restaurants’ control. This will only accelerate with the rise of virtual restaurants and ghost kitchens. Restaurants may still need third-party delivery, but it’s only a matter of time before they need it, or at least pieces of it, less.

It all makes third-party delivery something of a fair-weather friend to restaurants. Despite the relief funds and press releases proclaiming they’re here to help restaurants, delivery services are also making clear that they are, first and foremost, tech companies in the business of moving goods. They’ll go wherever those goods happen to be most plentiful. Given that, trust around these services seems tenuous at best when it comes to restaurants.

Dive Deep Into Ghost Kitchen Strategy

Delivery isn’t the only thing that’s here to stay. Ghost kitchens and virtual restaurants have also proven themselves mainstays of the restaurant biz over the last few months. But what’s the difference between a ghost kitchen and a virtual restaurant? Does every restaurant need to invest in this space? Where the heck does one even begin?

On December 9, The Spoon will gather together restaurants, industry analysts, restaurant tech companies, ghost kitchen operators, virtual restauranteurs, and others to talk through the above questions and more. The day will provide a variety of perspectives on where the ghost kitchen and virtual restaurant sectors are headed as well as next steps for those wanting to get involved.

Register to join us for this event.  If you’re in the ghost kitchen space and are interested in sponsoring the event, let us know!

Dunkin Donuts

Restaurant Tech ‘Round the Web

Dunkin’ will close over 680 underperforming stores, according to the company’s Q3 2020 earnings release. The company said it will allow these franchisees to reopen in Dunkin’s “NextGen” store format or relocate to higher-traffic areas that can accommodate drive-thru.

Delivery integrator Chowly announced this week it has added Grubhub to its list of delivery partners. Mutual customers of the two companies can use both pieces of restaurant tech to streamline the management and fulfillment process of their delivery orders.

Chicago has shut down indoor dining again in response to rising COVID-19 numbers. No indoor service, including bar service, will be allowed, and outdoor dining must end by 11 p.m.

 

Food Tech News: Tik Tok Creator’s Menu and Biodegradable Bacardi Bottles

Happy Halloween! This year’s holiday will certainly look different, but I know I will be checking out the full moon, making my own chocolate peanut butter cups, and watching The Shining. Maybe you can find joy in creating a candy chute or developing your own candy delivering robot for trick-or-treaters. Or, you can spend some time catching up on food tech news like Tik Tok’s new food menu, biodegradable Bacardi bottles, Whole Foods’ predictions for new food trends, and adaptogen coffee pods.

Tik Tok partners with Postmates for “Creator’s Menu”

Tik Tok has skyrocketed in popularity amongst millennials this year, with the majority of its users between the ages of 16-24. To capitalize on this demographic, Tik Tok partnered with Postmates to create a menu of this year’s most popular food trends that millennials are salivating over. Available from October 28 to November 22, local restaurants in Los Angeles will be serving up their versions of whipped coffee, cloud bread, pancake cereal, and a bento box. These are the food trends on Tik Tok that have reached between 259 million to 3 billion hashtags. With the whipped coffee going for $7.50 and the bento box $20, this is a price only a millennial could justify.

Photo from Bacardi

Biodegradable Bacardi Bottles

Bacardi has started using bottles that look exactly like regular plastic, except for the fact that these bottles are apparently able to break down in the trash, both outside and in the ocean. The material used to make the bottle is called polyhydroxyalkanoate (PHA), and its main component is canola oil. Danimer Scientific, which makes this material, feeds canola oil (which contains carbon dioxide that was stored in the plant) to bacteria. The bacteria then turns this into PHA, which is extracted to make plastic-like products. Companies like Nestlé and PepsiCo are also using this material for packaging.

Whole Food predicts food trends of 2021

Whole Foods released its annual food predictions for the upcoming year, and it should come as no surprise that plant-based foods are a trend that is predicted to continue on an upward trajectory next year. Healthy baby food, chickpea-based foods, vegetable jerky, and upcycled foods are some on the list. Out of all the predictions made, my personal favorite is alcoholic kombucha.

Adaptogenic, compostable coffee pods from Hong Kong

Hong Kong-based Beams Coffee combines the trends of gourmet coffee and adaptogens in its compostable pods. Adaptogens are plants and herbs that are supposed to help the body combat stressors, and Beams Coffee uses medicinal mushrooms like Cordyceps, Lion’s mane, Reishi, and Tremella. These mushrooms are paired with specialty coffee from Sydney and Melbourne and come in pods that are 95 percent sugarcane-based. The coffee pods are available in four varieties including beauty, mind, energy, and immunity, and are compatible with the Nespresso maker.

Uber Eats’ Revamped App Aims to Make Restaurant Discoverability Easier

Uber Eats today unveiled a newly revamped app and website the delivery service says will improve restaurant discoverability. According to a company blog post, this digital makeover will roll out “over the coming weeks.”

The revamp will include a number of new features, several of which are designed to make the process of finding one’s desired cuisine and restaurant faster. A shortcut toolbar will feature a user’s favorite cuisine types as well as quicker access to grocery stores, pet supply stores, flower shops, and other businesses that are relatively new to the third-party delivery space. These “discoverability” tools also include a feature Eats has dubbed Hidden Gems, which surfaces local restaurants in a user’s neighborhood and recommend restaurants based on past orders.

Enhanced pickup options are the other feature Eats is highlighting with this redesign. The new app and website will include “visual cues” on the map so users can see which nearby restaurants offer pickup options. The map will also show restaurant ratings and local deals. Finally, a group orders feature lets users order from multiple restaurants at the same time through one single order.

Uber said in today’s blog post that after talking to users, the company realized that while ordering, checking out, and tracking meals via its app is simple and streamlined, actually finding a restaurant is a time-consuming task for many. The features announced today aim to minimize the time it takes to find, say, a local pizza spot with a reasonably good reputation and good quality food.

Of course, having to scroll through a gazillion restaurant listings to get dinner delivered is arguably not a real problem. But in the micro-world of third-party delivery services, speed and efficiency reigns, and Eats, Grubhub, Postmates, and DoorDash now regularly release new features meant to shave a few more seconds off the overall delivery app experience.

Among the major third-party delivery apps, August sales grew 158 percent year-over-year collectively, according to recent data from Second Measure. At the same time, though, the third-party delivery sector remains controversial. In particular, the sky-high commission fees they charge restaurants are seen as nothing short of predatory at a time when permanent restaurant closures are increasing because of the pandemic. Others worry that the restaurant industry meltdown will leave us in a world where the bulk of our restaurant options come from chains. Last time I checked, enhanced discoverability tools and better map features can’t fix that problem.

Ordrslip Adds Postmates Integration to Its Mobile App Software for Restaurants

Restaurant tech company Ordrslip announced today it has partnered with Postmates to add delivery integration into its mobile app software, according to a company press release sent to The Spoon. Per today’s announcement, Ordrslip’s software lets restaurant customers “create custom-looking whitelabel mobile ordering applications via Ordrslip.”

It’s no secret that, since the pandemic pushed the restaurant industry to off-premises formats, usage of mobile apps for ordering and payments is on the rise. It’s also pretty commonly known at this point that sophisticated apps a la Starbucks are far too expensive and resource-consuming for most independent restaurants and chains to create themselves. Hence the growing selection of tools (see below) various third parties offer to get restaurants the digital properties they need without decimating their already decimated margins.

The Ordrslip approach is this: Ordrslip creates a branded mobile app for the restaurant with all the features needed to fulfill pickup and delivery items, including order-ahead capabilities, payments, iOS and Android compatibility, POS integration (only with Square and Clover for now), and order tracking. You can read the full list of features here. The app looks and functions as if it belongs to the restaurant but is powered by Ordrslip’s softare in the background. As of today, there is the option to add Postmates integration in order to fulfill the last-mile delivery end of the operation.

The promise is that by using Ordrslip with the new Postmates integration, restaurant customers can bypass the controversial per-transaction commission fees they normally get charged by third-party delivery services. Ordrslip pricing is $100/month per location or $1100/year per location, with one-time setup fees of $1,000 and $750, respectively. (The setup fee applies to all locations a restaurant might operate.)  

On the one hand, those are high numbers for already struggling restaurants, which would have to be doing enough delivery to surpass $100/month in commission fees per transaction. On the other, there’s a pandemic happening and folks are staying at home and ordering more delivery. In other words, $100 in commission fees to Grubhub Et al is probably on the low end these days, though restaurants still have to pay some commission to Postmates for delivering the order.

Ordrslip is one of a growing number of companies offering restaurants workarounds to 30 percent commission fees on delivery orders. POS platform Toast, ChowNow, and many others have various tools in the market that let restaurants process orders and payments through a separate platform so they only need to use the delivery service for actual deliveries. Another company, ShiftPixy, bypasses delivery services altogether and provides the drivers itself. And even the delivery services themselves are participating in this trend. Uber Eats is piloting a tool that lets restaurants process orders through their own platforms, though Uber Eats retains the customer data.

Uber Eats also just announced its plans to buy Postmates for $2.65 billion, a deal that is expected to close in the first quarter of 2021. That deal is unlikely at this point to affect a partnership like the one Ordrslip announced today.

Uber Eats Is Not Bailing On California

California imposed an order this week that, for a minute there, led us all to believe Uber’s food delivery business in that state was on the rocks.

Spoiler alert: it’s totally not.

Recap: On Monday, a California judge issued a preliminary injunction ordering that Uber (along with Lyft) reclassify its drivers as employees in keeping with the state’s AB5, which was signed into law in January. Uber CEO Dara Khosrowshahi then took to the airwaves to tell us all the company will likely have to temporarily shut down service in California if the court does not overturn the ruling.

As is usually the case when we talk about third-party delivery services, there’s fine print, which Eater SF promptly dug up. An Uber spokesperson confirmed to the publication that the shutdown would only apply to the company’s rideshare business, and that Uber Eats — now Uber’s biggest business — would continue “as is.”

I can’t really think of a better way of putting it than in Eater writer Eve Batey’s own words: “Uber’s threat to take their ball and go home if forced to comply with California law really only applies to a ball that, right now, isn’t the one that the other kids want to play with all that much.”

Eats currently generates more revenue than Rides, according to Uber’s second-quarter earnings report. That makes sense, seeing as the world has been in a pandemic-induced lockdown of late, and even with restrictions lifting in places, average consumers are just not going out as much. They are, however, ordering a ton of delivery meals from restaurants. Gross bookings for Eats were $6.96 billion in Q2, which was up 113 percent year-over-year and up 54 percent over Q1 2020.

Uber also recently struck a $2.65 billion deal to acquire fellow third-party delivery company Postmates — a service that just happens to be number one in Los Angeles, a city that just happens to be the second most populated one in the U.S. Yanking the plug on California, even temporarily, would make the deal pointless. Uber might have ethical flaws in its business model, but its leaders aren’t dumb.

Besides, they’ll get a chance to continue the fight to keep its delivery drivers and couriers as contract workers come November, when Californians vote on Proposition 22, which would exempt rideshare and delivery drivers from being considered employees. Needless to say, tech companies are all-in on this one.

But if regulators continue to scrutinize third-party delivery practices, and consumers continue to rely on off-premises meals while restrictions around in-house restaurant dining room remain in place, it seems only a matter of time before Uber et al. go from the frying pan to the fire with food delivery. 

Maybe then we can take eloquently worded threats to shut down seriously. 

Accelerating the Drive Thru

Of late, there’s been much ado about the drive-thru, with major restaurant chains like Shake Shack and Chipotle all announcing an increased focus on the format.

So it wasn’t too surprising this week to get new data showing the drive-thru is far and away the most popular restaurant “experience” among consumers. A new survey from Bluedot and research firm SeeLevel HX found that 74 percent of respondents said they have visited the drive-thru “the same amount or more often than usual” compared to 43 percent in April. Those consumers surveyed also named drive-thru “the safest” of the to-go formats polled in the report.

It’s all a bit of a no-brainer if you ask me. If you’ve hung around inside a restaurant lately waiting for your pickup order, you’ll know the experience is often tense and confusing. Meanwhile, curbside pickup is still so new for most restaurants that operational kinks have yet to be worked out. That makes drive-thru, a decades-old format, seemingly the safest and fastest way to collect your grub at a time when dining at a restaurant is a no-go for many consumers.

But drive thrus could be faster. A lot faster. In this week’s survey, 81 percent said waiting more than 10 minutes in the drive-thru is too long.

As mobile ordering increases in restaurants and more chains reformat their brick-and-mortar locations to accommodate drive-thru, speed of service will need to be at the top of the priority list.

Restaurant Tech ‘Round the Web

  • A new survey by Oracle Food and Beverage found that 59 percent of U.S. consumers and 47 percent in the U.K. “plan to dine-out as soon as they are able.” Forty percent in the U.S. and 39 percent in the U.K. would feel “safer” using a digital menu from their own device. Another 35 percent in the U.S. and 31 percent in the U.K. had similar feelings about digital payments. 
  • Mobile platform Mad Mobile has acquired restaurant tech company CAKE, best known for its POS system. Mad Mobile hopes to use the acquisition to create a next-gen POS designed for mobile-first restaurant experiences. 
  • For more on the future of ridesharing, which is usually an indicator of what’s to come for food delivery, check out this podcast from Axios Re:Cap. 

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