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Daily news and analysis about the food tech revolution

third-party delivery

Newsletter: How to Support Restaurants Right Now Without Endangering Everyone’s Health

To do my bit in supporting restaurants right now, I’ve been ordering from them once every few days for the last couple weeks. More times than not, it’s been a logistical circus that winds up costing a lot of money and, especially lately, unnecessarily putting workers’ health at risk.

Case in point: Tuesday night I ordered online from a local burger place. While the system gave me a “curbside pickup” option, there was no curbside at which to actually park once I arrived at the restaurant. Rather, I joined a crowd of other people clustered in front of the restaurant. A lone worker frantically ran in and out of the restaurant calling names as she tried to determine which order belonged to which customer. No one wore gloves and no one was standing six feet apart.

The inconvenience of the experience is the least problematic part of this example. Far more unsettling are the financial and health risks of running an off-premises business when you’re not an off-premises restaurant. Through no fault of its own, that burger place is not equipped to efficiently manage the volume and logistics of a curbside business. It’s never had to until now.

Restaurant owners and industry folks have long argued that the dine-in experience differs greatly from a to-go operation, and that one can’t simply flip a switch and be asked to transition from one to the next without a hitch. And yet that’s exactly what thousands of restaurants across the country are at this moment being forced to do. And what you get is a scene like the other night, where there isn’t enough staff to even pick up the phone, let alone manage the influx of orders going out and customers waiting. Staffers are interacting with way too many people than could possibly be safe, and everyone’s health is at risk. There’s also evidence that an off-premises strategy isn’t even financially fruitful for many restaurants.

Is it really worth it or is there another way to support restaurants that desperately need a lifeline as dining shutdowns and COVID-19 ravage the industry?

The answer, fortunately, is “yes.” Shortly after states began mandating dining room closures, charities and funds began popping up online. Last week I wrote about virtual tip jars for servers and bartenders out of work right now. And some of these funds go directly to restaurants themselves.

The James Beard Foundation has launched a Food and Beverage Industry Relief Fund that accepts donations from corporations, foundations, and individuals to provide micro-grants to independent food and beverage businesses.

Dining bonds and gift cards are another route. The Dining Bonds campaign was started by a group of industry professionals to get immediate relief funds to restaurants. It works like a savings bond: guests purchase a bond at today’s value rate and can redeem it for full face value at a later date. Support Local lets you purchase restaurant gift cards from independent businesses in a number of cities. They can be redeemed now or, if you’re not feeling up for off-premises, later on, when dining rooms open again.

Initiatives like these aren’t a magic bullet. But they do provide some other avenues for supporting restaurants, whether you’re trying to avoid other people or just looking for a way to give a little extra help.

Running a Restaurant? We Want to Hear From You

If you’re reading this and also happen to be a restaurant owner, operator, or worker, help The Spoon help you. We’re currently collecting stories, tips, and ideas about what it’s like to actually live and work in the restaurant biz during this strange, unsettling time.

That includes anything from new strategies to make delivery and takeout more efficient to how you’re keeping yourself and your workers safe. And, this being The Spoon, any stories of how you’re using tech to help cope with this situation are most welcome. But before the tech comes the people, which is why your voice is the most important piece of our ongoing coverage and narrative.

Drop us a line a tips@thespoon.tech or DM me via Twitter.

It’s Almost Here: The COVID-19 Virtual Strategy Summit

If you’re a restaurant, food business, or food tech company, join us next week for a virtual summit on how to do business in the age of coronavirus.

On Monday, April 6 The Spoon will host the COVID-19 Virtual Strategy Summit for Food and Restaurants. No travel required to get there and 100 percent socially distant, this online summit will features talks and fireside chats from leading experts including:

  • Chef Mark Brand – Founder of Save-On Meats and creator of the Token Program to feed those in food insecure situations
  • Caesare Assad – CEO of FS6
  • Sara Roversi– Founder of the Future Food Institute
  • Dana Gunders – Executive Director of ReFED
  • Phil Lempert – the SuperMarket Guru
  • Paul Freedman – Professor of History at Yale University and author of American Cuisine: And How It Got That Way
  • Ryan Palmer – Partner at Lathrop GPM and chair of firm’s Restaurant, Food, and Hospitality group

Register today.

Keep on truckin’,

Jenn

Wow Bao Launches an Off-Premises Platform for Other Restaurants

Chicago-based Wow Bao is expanding its presence across the U.S. by opening ghost kitchens inside other restaurant brands’ stores. The fast-casual chain just launched an off-premises platform that allows other restaurants to make and serve Wow Bao’s products via third-party delivery channels and keep the revenue from those sales, according to a press release sent to The Spoon. In exchange, restaurants pay a product fee to Wow Bao to use the platform. 

While it might at first sound odd to add a sales channel to your business by selling another restaurant’s menu, but Wow Bao President Geoff Alexander thinks this strategy could work for just about anyone. “We believe any restaurant can be a ghost kitchen serving Wow Bao,” he told me this week over the phone.

Once a restaurant is onboarded to Wow Bao’s off-premises platform, they are sent their first food shipment and can start selling the chain’s menu items online via third-party delivery channels like DoorDash, Uber Eats, and Postmates. Items are sold via an entirely separate menu Wow Bao provides and manages; the Wow Bao name appears in those delivery apps, and restaurants only have to prep the food in their kitchens and hand it over to a delivery courier.

Using a hypothetical Italian restaurant as an example, Alexander explained that kitchen staff might be cooking their usual pasta fare when a Wow Bao order comes through the ticket system. Without really interrupting the flow of the regular work, a chef or staff person could quickly put the item on the stove to cook or steam and continue going about their usual tasks. 

Nor is it a lengthy, complex process for a restaurant to get set up on the platform. Businesses pay a startup fee of $2,000 to get set up with reference books, a supply chain, digital marketing, and any necessary equipment. Wow Bao will also help restaurants get set up on third-party delivery platforms if they aren’t already, and the flat fee also includes the first order of to-go packaging supplies.

Versions of this concept exist in the restaurant industry. In 2019, Fatburger turned some of its stores into ghost kitchens selling food from the chain’s sister brands. However, that operation remains within the Fat Brands family. Wow Bao, on the other hand, wants to make its off-premises concept available to anyone — chain restaurants and independents alike — in the hopes that it might be able to increase sales.

Restaurants need all the help they can get in terms of improving their bottom lines. Right now, 3 percent of restaurants have already shuttered permanently, according to the National Restaurant Association, and another 11 percent anticipate doing the same within the next 30 days. Those hanging on are struggling to quickly pivot to a delivery/takeout model in the hopes that those off-premises sales will be enough to keep business going during dining room closures and social distancing.

Alexander told me this concept isn’t actually a response to pandemic or subsequent restaurant industry fallout that’s currently happening, it just happens to line up timing-wise with current events. “We think we found a way to grow our brand and more importantly help restaurants at this time,” he said.

There aren’t yet numbers to show if this concept will indeed be profitable for other restaurants, though Alexander told me restaurants could make as much as a 40 percent bottom line profit with little extra labor and almost no disruption to daily operations. “We believe we have created something restaurants can survive with,” he said.

At the moment, Wow Bao is operating one of these ghost kitchens in the San Francisco Bay Area. Miami is next, followed by several other cities over the next few weeks.

New York Court Rules That Postmates Couriers Are Employees — and Eligible for Unemployment

The New York Court of Appeals has ruled that Postmates couriers are employees and therefore eligible for unemployment benefits during the COVID-19 pandemic. 

The ruling is actually a reinstatement of a 2015 decision, which found that former Postmates courier Luis A. Vega was eligible for unemployment benefits after he was terminated from the service. Postmates had appealed the decision. The New York Court of Appeals this month reversed it, stating, “Because there was record support for the Board’s finding that the couriers were employees, we reverse the Appellate Division order and reinstate the Board’s decision.”

The ruling states there is “substantial evidence” that Postmates “exercised control over its couriers sufficient to render them employees rather than independent contractors operating their own businesses.” 

The document goes on to explain that the third-party delivery service “could not operate” without couriers, that Postmates “controls the assignment of deliveries,” and that if the courier is unavailable, Postmates, not the courier, is responsible for finding a replacement. Technology-wise, Postmates tracks deliveries in real time. However, “That the couriers retain some independence to choose their work schedule and delivery route does not mean that they have actual control over their work or the service Postmates provides its customers . . .”

All of these elements — which largely focus on how much control Postmates has over its workers — factored into the decision findings that Postmates couriers can be treated as employees, rather than contractors. 

How third-party delivery companies classifies their workers is a major issue up for debate right now, and this isn’t the first time Postmates has wound up with a ruling favorable to its workers. In December, the service, along with Uber, filed a lawsuit claiming California’s Assembly Bill 5, which classifies gig workers as employees, was unconstitutional. A U.S. District Judge rejected that bid last month.

The current COVID-19 pandemic intensifies the flame under this debate, as these workers are more at risk of infection by virtue of the fact that they are out and about delivering food when the huge swaths of country are being told to stay at home. Classifying gig workers as employees, rather than contractors, means couriers would have access to paid health benefits and sick leave. At the same time, the restaurant industry is experiencing a meltdown of epic proportions, with the National Restaurant Association predicting the loss of millions of restaurant-related jobs over the next few months. With no guarantee that there will be enough demand for delivery to ensure all couriers keep their jobs, those folks driving and biking food to customers need something of their own guarantee that they’ll have access to assistance if they lose their gigs. 

That, of course, means that services like Postmates would have to pony up and pay into unemployment insurance funds. In the case of this ruling, Postmates will have to contribute to New York’s Unemployment Insurance Fund. It’s entirely possible this decision will have a ripple effect, and Postmates along with other delivery services will wind up having to make similar moves in other states, too.

“Today’s decision is a huge victory for thousands of gig workers across New York,” New York Attorney Letitia General James said in a statement. “The courts have solidified what we all have known for a while — delivery drivers are employees and are entitled to the same unemployment benefits other employees can obtain.” 

Newsletter: COVID-19 Could Help Us Build a Better Restaurant

Welcome to the first-ever Weekly Spoon newsletter that’s entirely focused on restaurant innovation. That we chose to launch this just as a pandemic is sweeping across the globe is entirely intentional. Of all the food tech sectors out there, none has been hit so hard or will change — forever — as drastically as the restaurant biz.

With that in mind, let’s kick this thing off by not rehashing the gloomy stuff. Instead, let’s highlight some ways in which the current restaurant business meltdown is spurring a ton of initiatives that could make a better overall industry in the long term — if we let it.

The Virtual Tip Jar Will Stick Around

As anyone whose ever waited tables, tended bar, or delivered pizzas knows, tips are an important portion of workers’ incomes. With most bars and dining rooms closed right now, an astounding number of what are basically virtual tip jars have popped up online. We first got wind of this last week, when we came across a site called chatt.us that lets at-home drinkers leave tips for service workers in Chattanooga, Tenn. via Venmo or CashApp. 

A little more digging uncovered more of these virtual tip jars in, well, pretty much every state from Maryland to Idaho. One site in particular, serviceindustry.tips, lets you choose specific cities from a list and direct your funds to workers in that area from a very user-friendly web interface. Others are simple spreadsheet interfaces, though no less popular from the number of entries on some of them.

While these virtual tip jars can’t make up for the lost wages and job layoffs many restaurant workers now face, they could at least provide some aid to those currently struggling.

They could also be a valuable tool for the restaurant industry even when dining rooms re-open. As one restaurant owner explained to me recently, in-house staff prepping the off-premises orders don’t see any of the tips left through third-party ordering platforms. A virtual tip jar could be a way for customers who wanted to hand over a little extra to tip those employees for their work. There are also well-documented issues around tipping delivery drivers in general. Since fewer folks seem to carry cash these days, a virtual tip jar could be a way to bypass that aspect of the platform, thereby making sure it’s the worker who gets the tip — not the tech companies.

Ditto for Contactless Delivery and Payments

Three months ago “contactless delivery” wasn’t even a phrase, at least not in the vernacular sense. In an effort to stem the spread of coronavirus worldwide, what started in China (see above image, courtesy of Yum China) has now quickly caught on. All the major delivery platforms as well as grocery sites like Instacart and individual restaurant chains now either use contactless delivery as the default option or make it clearly available through their apps.

I doubt we’ll revert back to the old method once this horror show is over.

At their most basic, contactless delivery methods as well as contactless payments are just more hygienic. Fewer germs can spread when cash and cards aren’t being handed back and forth over a counter, or when customers and their delivery couriers stand a certain distance apart during a drop-off. I doubt I’m the only person who’s ever ordered delivery while having bronchitis. Contactless delivery would go far in protecting workers — many of whom do not get paid sick leave — from illnesses their customers might be carrying while they’re stuck at home. Vice versa, too.

And if this look into China’s (sort of) newly reopened restaurant scene is anything for the rest of the world to go by, mobile payments will see a boost, too. More customers will be using apps like Apple Pay, CashApp, and Google Pay to avoid constantly handing over a credit card.

Simpler Menus Will Beget Better Service

“Pare down your menu” is a directive I’ve been hearing a lot as restaurants quickly pivot to serving customers through takeout and delivery channels. That means offering only the items that are easy to produce, will travel well, and are ones that customers actually want. 

That’s not breakfast, at least not right now. In a statement this week, McDonald’s announced it was temporarily pulling breakfast items from its menu and will focus on serving its most popular items. Taco Bell also nixed breakfast items for now. More chains are likely to follow.

Of course, these moves are in response to the potentially billions of dollars the restaurant industry will lose over the next few months. I suspect, however, that slimmed down menus could actually improve certain aspects of the restaurant industry, particularly where tech is concerned. Have you ever tried to navigate a Taco Bell self-service kiosk? Finding Waldo inside Google Maps was an arguably easier task.

Smaller menus could also speed up times in the drive-thru, improve AI-powered upsell recommendations, and use fewer ingredients overall, thereby reducing food waste.

In no way am I suggesting that menus need to look like this one from 1973. And who knows? Breakfast and Monster Tacos might go back on the menu at some point. But maybe this strange, unsettling shift in which we now find ourselves can show us that simpler menus leads to better experiences for everyone involved.

Keep on truckin’,

Jenn

Survey: 3% of Restaurants Are Permanently Closed. More Will Follow

The National Restaurant Association this week released some rather gloomy statistics around COVID-19’s impact on restaurants so far. A survey of more than 4,000 U.S. restaurant owners and operators found that 3 percent have already permanently closed their restaurants, while another 11 percent say they anticipate doing so within the next 30 days.

Those that have remained open (at least for off-premises orders) have also had to make adjustments. Besides the switch to delivery and takeout orders, restaurants have also had to reduce staff as well as cut back their operating hours.

On that note, even mega-chains have not been immune. This week alone, The Cheesecake Factory furloughed 41,000 employees and is in talks about possibly deferring and/or adjusting its rent. Yum Brands, which owns Pizza Hut, Taco Bell, and KFC, has outright closed 7,000 restaurants around the world, which affects hundreds of jobs. McDonald’s completely shuttered operations in the U.K., and has reduced hours (and menu items) in the U.S. 

According to The Association, roughly half of restaurant owners/operators “anticipate more layoffs and hourly reductions over the next 30 days.”

This infographic, also from The Association, breaks down the situation and its unsettling numbers pretty clearly. Notably, it states that “Restaurants can’t just switch their operations over to takeout and delivery and be fine. This is not an option for everyone in our industry.” And indeed, only 54 percent of operators/owners surveyed by The Association have changed their business model to off-premises for the time being.

Unlike QSRs, which typically offer food that travels well and was designed to eat quickly, many restaurants specialize in meals meant to be eaten in the dining room. It’s not a matter of simply throwing existing dishes in a box, and part of developing an off-premises-only model involves adjusting the menu. More items that travel well and family-style options are popular recommendations for restaurants.

Even so, doing delivery is expensive. Industry figures are telling businesses to join as many third-party platforms as they can right now — no small feat when you consider the exorbitant commission fees. Some companies, which are essentially third-party aggregators for third-party delivery platforms, can speed that process up by handling the bulk of the work. They do not necessarily guarantee better commission rates for restaurants, though.  

All of which is to say, unfortunately, we can expect the number of employee layoffs and furloughs, shuttered operations, and reduced hours to keep going up, at least in the very near future. The $2 trillion stimulus package that was passed this week will offer some relief for restaurants. The bleak reality is that it probably won’t entirely stop the bleeding.

Report: Sales From Third-Party Delivery Apps Are Slowing. Might It Be Those Fees?

Despite dining rooms being closed and delivery being one of the few sales channels on which restaurants can rely, the numbers are down as far as third-party platforms like Grubhub and DoorDash are concerned. Data from Earnest Research shows that these platforms are “declining in growth,” according to an article today on Nation’s Restaurant News.

Earnest Research analyzes credit and debit card purchases. Its findings, which end with numbers from March 18, show that instead of ordering more restaurant delivery, consumers are instead spending their money on grocery store purchases.

From NRN:

Earnest Research recorded national restaurant spend down 17% year-over-year for the week ending March 18, specifically driven by declines in QSR (-12% YoY), fast-casual (-24% YoY), and casual dining (-34% YoY). Spend with delivery aggregators (how Earnest defines third-party marketplaces and delivery app services) decelerated to +11% YoY from mid-twenty percent growth year-to-date.

Brick-and-mortar grocery stores, on the other hand, saw a 79 percent year-over-year growth, while online grocery orders were up 66 percent year over year. “This suggests a shift in shopper behavior as customers are trying online grocery for the first time, increasing their frequency, or both,” the report notes.

You can hardly blame consumers for wanting to spend their money on grocery items that can stretch across multiple meals. I, too, had a recent experience that really underscored how expensive restaurant food delivery actually is. Over the weekend, I ordered a $20 pizza from a local place here in Nashville. The shop only delivers through Postmates, and between delivery fees, service fees, and a tip, I dropped about $38 for that pizza. (Part of that did go towards a larger-than-normal tip.) Fast-forward to yesterday when I swooped into a grocery store to pick up enough for a few meals plus a week’s worth’ of oat milk. The goods cost about $30 total.

Many more are probably making similar comparisons right now. More than 3 million people filed for unemployment benefits in the last week, and that number could rise. Federal Reserve Chairman Jerome Powell said today that we “may well be in a recession” and that economic activity will substantially decline from April to June.

All of which is to say, this isn’t exactly the climate in which to regularly cough up $10-plus in fees on delivery orders, which makes it not all that surprising that numbers are down for delivery platforms. 

It’s a bummer, to be sure. In an ideal world, everyone would have the funds to support local restaurants and regularly purchase delivery and takeout meals from them while COVID-19 has us all on lockdown. It’s unrealistic to expect the majority of Americans to do this, though.

Some restaurant chains have gotten hip to the issue of high delivery fees. Subway, McDonald’s, Del Taco, Chipotle, KFC, Taco Bell, and others have all announced free delivery promotions through some of their third-party partners. Still, even with waived fees, for most of us, our money goes a lot farther when we’re spending it at Publix.

Another week or two of lockdown should tell us if such deals are enough to reverse the declining numbers for third-party delivery platforms. With no seeming end in sight to either the pandemic or the economic roller coaster we’re currently on, more people willing to spend their bucks on delivery is far from guaranteed.

Prioritizing Takeout is a Big Takeaway From Wahoo’s Fish Taco’s COVID-19 Response

As restaurants temporarily close dining rooms and many struggle to stay afloat, we’re starting to hear from specific businesses about their strategies for dealing with a world where “open for business” means being able to take and fulfill off-premises orders and no one is clear on when they’ll be able to once again open the dining room.  

One such business is Wahoo’s Fish Tacos. Wahoo’s is based in Southern California and currently operates about 60 restaurants across several U.S. states (as well as a location in Japan). The chain was founded by Chinese-Brazilian brothers Wing Lam and Ed and Mingo Lee back in 1988 as a way to bring their different cultures’ culinary traditions and styles together into a single restaurant.

Being around for 30-plus years means the brothers have seen their share of ups and downs in the restaurant industry, which so far is helping them better navigate the sudden and abrupt shift to off-premises business resulting from the spread of coronavirus. 

“We started delivery a week ago because we knew that was coming,” Ed Lee said of the mass restaurant closures that started last week.

During a phone call with me last week, he and Wing Lam explained that Wahoo’s has dealt with having to temporarily close before (after the 9/11 attacks), but that what we’re dealing with now is far more severe. “This is the first time we can’t get ahead of ourselves because everything continues to change,” says Lee.

That’s a polite way of stating the situation. The National Restaurant Association anticipates a $225 billion decline in restaurant sales over the next few months, and the loss of potentially millions of jobs. As mentioned above, entire states are mandating that restaurants close their dining rooms. Major chains are voluntarily shutting down all operations in certain parts of the world. And everything continues to shift so rapidly there’s no telling what the restaurant industry will look like in two days, let alone two weeks.

“Right now we’re looking ahead about two weeks at a time,” he told me. “Our number one goal right now is to make sure we take care of our customers and our employees.”

Wahoo’s is committed to offering delivery (“It is a battle that we’re stuck with,” says Lee). Another strategy that could be more financially beneficial to restaurants and workers is to emphasize takeout, where customers order ahead online then come to the store to collect their food.

The biggest challenge here is actually getting customers to understand the restaurant is still (for now) open for takeout orders. Whereas the vast majority of customers automatically associate quick-service restaurants like Wendy’s or even some fast-casual chains (think Chipotle) with to-go orders, there are many more restaurants in America people still think of as  sit-down establishments. But with 100 percent of orders now being off-premises ones, more has to be done to remind customers the takeout option exists.

Incentives for pickup orders are one way Wahoo’s is doing that. For example, customers who order a family-style meal for pickup and get free desserts as well as a gift card as a reward. There are deals on kids meals for those ordering food for pickup. Lee says the point of these incentives is to get customers to come back to the restaurant, both now and later.

Pickup orders also make more financial sense for the restaurant itself, because the commission fee owed to third-party services like Grubhub or DoorDash is much lower (there’s no driver to pay). Lee is quick to note that Wahoo’s doesn’t want to “get into a war with the delivery system.” That said, he adds that delivery “doesn’t make us a single dime.” Promoting takeout orders is a way around that. 

As an added benefit, it’s also a way for employees making the food to directly receive tips, something that doesn’t happen with delivery orders, where customers pay and tip online and the money only goes to the driver.

Questions around takeout as a business model remain. For now, it’s a viable way for restaurants to offer off-premises ordering and, unlike third-party delivery, connect directly with customers. That could change as the number of COVID-19 cases goes up and more restaurants close up entire operations. And unfortunately, it’s impossible to say right now if a state like California would implement mandatory closures for all restaurant operations, takeout included.    

Lee and Lam said they don’t anticipate seeing full restaurant openings until the end of May at earliest. Until they, they are trying to react to the ever-changing situation as best they can.”

“This is not going to be a tomorrow morning turn the lights back on. It’s going to be tough,” says Lam. “As a community we really need to get our act together and rally.” 

‘Pare Down Your Menu’ and Other Advice for Restaurants Forced Into Delivery

States continue to mandate that restaurants shut down their dining rooms, and across the U.S. major chains are voluntarily switching to off-premises-only models. Those measures are necessary right now as we try to slow the spread of COVID-19. But where does that leave smaller businesses with less robust delivery programs or no off-premises strategies at all?

Plenty of restaurant tech solutions exist that can speed up and/or simplify a delivery strategy. However, I talked with several individuals this week who own and/or manage such solutions, and they made it clear that right now, there’s a whole lot restaurants can do to improve their delivery operations without forking over thousands of dollars on technology.

“Before you even get to the technology, what you really have to figure out is if you’re equipped to do off premises,” says Sterling Douglass, cofounder and CEO of Chowly. “What kind of food? What’s the menu going to look like? How are you going to staff it? Can you afford to staff it?”

Douglass, along with Alex Canter and Charlie Jeffers of Ordermark, and Jim Collins of Kitchen United, took time this week to chat with me and offer some simple steps restaurants can take today to kickstart their off-premises strategy right now.

1. Pare down your menu.

Pivoting to delivery doesn’t mean necessarily mean throwing your existing menu online and dishing up the same meals in to-go boxes. There’s a reason pizza was a delivery item long before any other kind of food went mobile: it travels well and it’s relatively simple to make. 

Thinking along those lines, restaurants should assess their existing menus and decide which items best translate to a to-go scenario. “What they need to do is trim down their menu, look at the items that are easy to procure and produce, so they can make a menu and put it up online and make easy items they can get out that are going to travel well,” says Jeffers. Fried chicken, for example, tends to hold up in transit. Scrambled eggs: not so much.

Jim Collins, who in addition to being CEO of Kitchen United also runs his own restaurant, suggests restaurants create things like family-style options and, if possible, include beer and wine options. “These things will help you stay relevant to the consumer as we move forward.”  

And if there’s leftover inventory from items you can’t make right now? Canter suggests getting creative about how you can repurpose and sell it:  “[Restaurants are] selling frozen items on Postmates. You can sell frozen soup or frozen take-home pizzas and cookie dough.”

2. Consider using multiple delivery platforms.

Unless you have the funds to power your own delivery operation (marketing, drivers, technical logistics), the reality for most restaurants right now is that they need to partner with third-party platforms like DoorDash and Postmates. If possible, they should partner with all of them.

“More and more, restaurants are realizing that to sustain a business solely based on delivery, they need to increase their volume and that typically means being on as many platforms as possible. Instead of picking one or two it’s really critical for restaurants to be thinking about an omni-channel strategy,” Canter says.

An eMarketer forecast said much the same thing a while back, noting that “more options for customers” would be a key growth driver for delivery in the future.

Companies like Ordermark and Chowly, and others legitimately do come in handy here: they will set a restaurant up on multiple different delivery platforms as part of a single package deal. Otherwise, the restaurant owner or operator would have to go through the same lengthy process for each service. “Opt in to all of the marketplaces but work with someone like ChowNow to get direct ordering working as well,” suggests Collins.

3. Adjust your staffing.

This one is honestly hard to write about, especially since earlier this week, the National Restaurant Association estimated the loss of 5–7 million restaurant industry jobs. “At my family’s restaurant, we’ve had to tell the bulk of our staff to not come in,” says Canter. “That means for us, we’re a sit-down restaurant [with] waiters, bus boys that are no longer needed to support a delivery-only situation.”

He adds that running a delivery-only business requires “a very minimal skeleton crew,” which sadly means owners and operators are going to have to make some hard decisions around staffing in the near future. “This is unfortunately the situation at hand. It really comes down to repurposing your best employees to shift them to focus on the takeout and delivery side of the business.”

4. Accept that delivery is “a must” right now.

We can’t have a discussion about restaurant food delivery without at least acknowledging how controversial and frustrating third-party platforms are for restaurants. I’ll spare you yet-another rant, though, because right now, the unfortunate reality is that the majority of restaurants need to partner with these platforms right now.

“At this point, when restaurants are no longer able to provide a dine-in experience, the only way to stay open is by having a delivery program,” says Jeffers. “Most restaurants don’t have the marketing spend or the following to survive on their own.”

“If you’re a restaurant and you’re not doing delivery, you need to immediately implement a program. Just being on DoorDash and Postmates, you now exist to the people who use these apps. It’s not just worth it, it’s a must,” Canter adds.

Right now, the restaurant industry is banding together to help restaurants accept and implement this new reality of off-premises business, whether its by offering tech solutions, support for workers, and help hotlines to answer questions.

“You’re not alone,” Canter says to businesses. “Every restaurant is trying to figure out the best way to get through this.”

 

Uber Eats Waives Delivery Fees for Independent Restaurants

Uber Eats is waiving delivery fees for all orders coming from independent restaurants in the United States and Canada. The move is a response to the operational and financial strain restaurants are feeling as governments order statewide shutdowns of hospitality venues in the wake of the COVID-19 pandemic. 

Effective now, customers can find independent restaurants in the Uber Eats app by looking for the EAT LOCAL banner. Delivery fees will be automatically waived. This will help alleviate some of the financial strain restaurants are currently under as they are forced to close dining rooms and adopt or expand off-premises ordering. To further assist with monetary burdens, Uber Eats is also allowing restaurants to opt into daily payments, rather than billing weekly, as is normal.

All the major delivery companies now offer some form of relief to both independent restaurants and those driving/biking food to customers’ doorsteps. Grubhub/Seamless has suspended commission fees for these independent restaurants and set up a fund for drivers and couriers impacted by the COVID-19 pandemic. Postmates, too, has a fund for workers and will waive commission fees for new restaurants signing up with the platform in San Francisco. DoorDash just unveiled a boatload of initiatives for both its drivers and its restaurant partners.

Uber Eats will offer two weeks of pay to its drivers who test positive for COVID-19 and those who have to quarantine. The service has also said it is providing products with which they can sanitize equipment used to make deliveries. 

DoorDash Makes Moves to Help Workers and Restaurants Impacted by Coronavirus

Third-party delivery service DoorDash today announced a series of moves aimed at protecting workers and customers, and helping restaurants survive in the wake of coronavirus. In a letter sent to The Spoon today, CEO and cofounder Tony Xu outlined the steps his company has taken as more restaurants shutter their dining rooms and states mandate social distancing initiatives that include restaurant closures.

Xu noted that DoorDash has changed its app so that it automatically defaults to the contactless delivery option upon checkout to minimize person-to-person contact between drivers and customers. 

To better protect drivers, DoorDash is also shipping 1 million sets of free hand sanitizer and gloves to its drivers and couriers, as well as consulting with restaurants and health officials to improve safety around food preparation protocols. 

DoorDash is also providing financial assistance to DoorDash/Caviar drivers diagnosed with or quarantined because of COVID-19. The COVID-19 Financial Assistance Program means drivers in the U.S., Canada, and Australia can submit a claim and be eligible for up to two weeks of assistance. It’s an important offering from delivery companies at this time, as most drivers (and gig workers in general) do not get health benefits through their companies and do not qualify for paid sick leave. DoorDash’s program comes on the heels of announcements from Postmates and Grubhub, who last week set up their own financial assistance funds to assist drivers.

Relief funds have also been set up for restaurants, many of whom will suffer financially, and in some cases close permanently, because of mandated (and necessary) closures across the country.

Many major chains have already shuttered their dine-in service and switched to delivery and takeout models. That sounds straightforward enough for Starbucks or McDonald’s, but for smaller, independent restaurants, a switch to delivery is considerably more challenging, especially on the financial front. Delivery companies like DoorDash typically charge a commission fee for each transaction. Those costs — which have been and still are the subject of much controversy — can stretch as high as 30 percent per ticket, making delivery prohibitively expensive for small restaurants, whether or not there’s a pandemic unfolding.

DoorDash has addressed this issue. As of today, independent restaurants in the U.S. can sign up with DoorDash or Caviar and pay zero commission fees for 30 days, according to Xu’s letter. Currently, this option runs through the end of April.

Existing DoorDash partners will pay no commission fees on pickup orders, and Xu’s letter mentions “additional commission reductions for eligible merchants that are already on DoorDash,” though it doesn’t delve into specifics. DoorDash also said it is “earmarking up to $20 million” in merchant marketing programs for existing restaurant customers. 

Finally, the service is adding 100,000 independent restaurants to its DashPass subscription program for free. While we don’t have hard numbers yet, it’s highly possible more people will sign up for subscription memberships to delivery services as more cities require folks to stay home and people look for ways to cut costs on their delivery orders. So getting added to a platform like DashPass could provide a big boost in sales to smaller restaurants. 

DoorDash also said it is working with United Way Worldwide to delivery groceries to food-insecure households, senior citizens, low-income households, and persons with disabilities. For organizations that want to get involved with these efforts, DoorDash has set up an intake site where they can sign up.

States Call for Restaurant Shutdowns, Businesses Switch to Delivery Models

The list of cities and states now mandating that restaurants close their dining rooms and switch to delivery- and takeout-only models continues to grow as governments and businesses work to slow the spread of coronavirus across the U.S. These moves arrive just as the CDC advises against gatherings of 50 or more for the next eight weeks.

As of Monday morning, Ohio, California, Illinois, Massachusetts, New Jersey, Connecticut, and Washington state have ordered bars and restaurants to close or switch to off-premises formats. New York City and Hoboken, N.J. are also requiring restaurants to shutter dining rooms, and around the country individual businesses have been voluntarily closing their establishments for the last few days. Starbucks and Chick-fil-A have moved all stores to a to-go model, Momofuku shuttered all of its locations, and Danny Meyer’s Union Square Hospitality group closed all its restaurants. Those are just a few names on a list that will in all likelihood include most restaurants in the U.S. in the near future.

How restaurants will manage this shift and what will happen to existing staff varies city by city, restaurant by restaurant, and in some cases by restaurants within the same brand. Starbucks, for example, is currently keeping the bulk of its locations open for delivery, mobile pickup, and drive thru orders, but will completely shut stores at malls and universities and in areas with “high clusters of COVID-19 cases,” according to a letter from the company.

Celebrity chef Jose Andrés, meanwhile, said he would be closing all of his restaurants but that some of them would be transformed to community kitchens staffed by volunteers giving takeout meals to those in need. Existing employees will get paid leave in the meantime. 

Other employees are not so fortunate. Seattle chef and restauranteur Tom Douglas has closed 12 of his 13 restaurants and laid off staff, saying that he will rehire them once business reopens.

And, of course, many businesses are switching to off-premises-only models and will be able to fulfill delivery orders and in some cases those placed at the drive-thru. On the one hand, that’s a plus for existing staff, who presumably in most cases will be able to keep their jobs. However, delivery, especially via third-party apps like Grubhub and Uber Eats, remains a challenge for many businesses, especially independent ones. Commission fees these services collect per transaction are often prohibitively high for small restaurants. And with recession looming (probably already here, actually), there are questions around whether consumers will even want to pay the delivery and service fees required to get restaurant meals sent straight to their homes.

Most of the major delivery companies have responded with initiatives aimed at smaller restaurants and customers at this time. Uber Eats just announced it will waive all delivery fees for orders at independent restaurants. And last week, both Grubhub and Postmates announced they will waive commission fees for independent restaurants for the time being.

However, not all restaurants are set up for delivery, and some worry that the closing now will permanently put them out of business. One owner told the L.A. Times that his shop is not set up for delivery and that, ““The numbers really don’t make sense; that’s why we haven’t done it in the past.”

Whether delivery companies negotiate more affordable rates with new restaurant customers during this time remains to be seen. Postmates, for example, said it would waive all commission fees for independent restaurants in San Francisco that sign up with the service. Others may follow.

We’ll be updating this post regularly, so check back for more news on restaurant closures as well as how businesses, delivery companies, and customers are managing this situation.

Updated: Grubhub Defers Commission Fees From Independent Restaurants, Sets up Charity Fund

Update: According its terms and conditions, Grubhub’s “relief” program defers rather than waives restaurant fees. Restaurants that sign up for the program are required to pay back fees at the end of the relief period. While that has no solid date yet, Grubhub “anticipates that such date will be no later than March 29, 2020.” At that point, restaurants have four weeks to pay back those commissions. 

Grubhub announced this morning at a press conference in Chicago that it is setting up a charity fund and also temporarily suspending its collection of commission fees for qualified independent restaurants in the U.S. The initiative, which is a response to the COVID-19 pandemic now impacting daily life around the world, is in collaboration with mayors of large cities around the country, according to a press release emailed to The Spoon.

In the release, the delivery service noted that not collecting these commission fees will provide cash flow relief to independent restaurants, who along with bigger brands can expect to see as much as a 75 percent drop in sales because of the pandemic. More customers are choosing (or mandated) to stay home, which means significantly less foot traffic headed to restaurants. And some cities are putting restrictions on the restaurants themselves. In NYC businesses, for example, must reduce their capacity by 50 percent beginning today at 5 p.m. 

Bigger brands (think Chipotle, McDonald’s) have billion-plus-dollar digital businesses to fall back on in this scenario. For mom-and-pop restaurants as well as smaller chains, the slowdown due to coronavirus could be life-threatening to business.

More delivery orders would help, but as I wrote earlier today, third-party services like Grubhub and DoorDash collect per-transaction commission fees that can absolutely gut a business’s bottom line. Which is why it’s encouraging to see Grubhub stepping up and acknowledging the changes it needs to make during this time. Currently, the company is working with mayors of Chicago, New York City, San Francisco, Boston and Portland.

At the same press conference today, Grubhub also said it is setting up a fund that will let proceeds from its Donate for Change program go towards charities that support drivers and restaurants impacted by COVID-19. Through the program, customers can round up the change from each order and donate it. The service will match donations from its subscription service members.

Most of the major delivery services are now offering features like contactless delivery. Some, like Postmates, have set up their own funds to support workers affected by coronavirus. The hope is that others will follow with further measures to protect local businesses as well as the workers transporting our food.