Close Ad

The Spoon

Daily news and analysis about the food tech revolution

third-party delivery

Grubhub Launches a New Grant to Get Restaurants Ready for Winter

Grubhub today announced the Restaurant Winterization Grant, a new program that will provide financial support to restaurants as we move into winter and outdoor dining becomes a challenge in many areas of the country.

Done in partnership with The Greg Hill Foundation’s Restaurant Strong Fund, the program will grant $10,000 to “eligible independent restaurants,” according to a press release sent to The Spoon. The funds are intended to provide restaurants with “additional infrastructure and equipment to extend outdoor dining” along with more personal protective equipment for employees.

Wintertime’s arrival coincides with record highs of coronavirus cases in the U.S. As far as restaurants are concerned, the combination of the two makes indoor dining risky in many cases, nonexistent in others. Up to now, restaurants have been able to offset some of that loss with new developments for outdoor dining plans. Now, businesses will need to innovate on those innovations in order to continue to serve customers without expecting them to eat in the midst of 30-degree temperatures or wintery mixes.

Grubhub’s new program is supported by a $2 million grant recommendation from its Grubhub Community Relief Fund, started back in March as a way to support charitable organizations helping restaurants. 

The new program joins other efforts around the country to winterize outdoor dining. Recently, the city of Chicago held a contest asking residents to redesign the outdoor dining experience for winter. Elsewhere, Washington D.C.’s Office of Nightlife and Culture announced a $4 million grant program to help restaurants cover the cost of tents, domes, heaters, furnishings and other outdoor-dining-related equipment. Grubhub is the first third-party delivery service to dedicate a fund towards outdoor dining.

Those interested in applying for funds can do so starting today through the aforementioned Restaurant Strong Fund. Restaurants located in Chicago, New York City, Boston, and Philadelphia, and which have “five or fewer” locations are eligible to apply. The application period ends Nov. 21, and Grubhub has said funds will be distributed by the end of the month. 

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.

   

California Passes Prop. 22, Leaving Gig Workers as Independent Contractors

In a win for third-party delivery services and other big tech companies, California has passed Proposition 22, ensuring gig workers will remain independent contractors rather than employees of these companies.

Uber, DoorDash, Instacart, and other tech companies that use gig workers to fulfill the last mile of food deliveries backed Prop. 22, which is the most expensive ballot-measure campaign in California history.

The measure, a response to California’s Assembly Bill 5, which was signed into law last year, exempts companies from having to actually employ drivers and in doing so pay for healthcare, sick leave, and other benefits.

Uber, DoorDash, and other companies that rely on gig workers have long said that classifying drivers as employees would drastically change the way the companies do business. Less talked about but just as obvious is the point that classifying drivers as employees would undercut delivery and rideshare services’ still-elusive profitability. In August, Uber and Lyft even threatened to pull out of California after a judge ordered the companies to reclassify their employees in keeping with AB 5.

Uber CEO Dara Khosrowshahi sent an email last night thanking drivers, saying, “The future of independent work is more secure because so many drivers like you spoke up,”

Prop 22. opponents, such as labor groups, argue that the measure allows Uber and other tech companies to skirt basic obligations to workers, including minimum wage, health insurance, and paid sick leave. That last item is an especially hot-button issue at a time when COVID-19 cases are on the rise once again.

Gig Workers Rising, which opposed Prop. 22, called the measure “a loss for our democracy that could open the door to other attempts by corps to write their own laws.”

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.

 

Inhousedelivery.com Launches Beta Service, Aims to End 30% Commission Fees for Restaurants

With delivery and to-go orders essential to most restaurants’ businesses right now, the last few months have seen an influx of tech services that promise to alleviate some of those restaurants’ reliance on third party delivery. The latest is inhousedelivery.com, a San Diego, Calif.-based company that today launched the beta version of its delivery platform. The service is available to U.S. restaurant customers as of today for a flat $99/month, according to a press release sent to The Spoon.

The inhousedelivery.com platform bills itself as “a driver management and dispatch solution” that restaurants can integrate with their existing tech stack to better manage online orders, drivers, routes, and scheduling. To be clear: the inhousedelivery.com platform does not actually process online orders coming to the restaurant. Rather, it integrates with existing ones a restaurant may be using. At the moment, that list includes ChowNow, Delivery.com, Drizly, Toast, Squarespace, and Grubhub, among other platforms popular with restaurants.

The bulk of the inhousedelivery.com platform is geared towards managing the last mile by providing driver scheduling, route optimization, and real-time tracking of orders. However, as today’s press release rightly points out, most restaurants cannot afford their own fleet of delivery drivers, hence the reliance on third-party services like Grubhub and Uber Eats. Currently, Grubhub is the only one of the big four of these services in the U.S. that integrates with inhousedelivery.com.

Addressing this issue of drivers, inhousedelivery.com also said today it has opened registration for its secondary platform, Driversharing.com, which lets restaurants share drivers. Theoretically, at least, that means multiple restaurants on the same city block could share a pool of drivers and bypass using third-party services altogether, so long as they were using an alternative service (e.g., ChowNow) for the order processing step.

That combination would fulfill inhousedelivery’s promise on its website to “bring delivery in-house” and eradicate the 30 percent-per-transaction fees restaurants typically pay third-party delivery services. This is a claim more and more restaurant tech companies are making these days as Gruhub et al. come under fire for what many see as predatory business practices at a time when restaurants need the delivery format. Several of those companies, including Square, ChowNow, and Toast, all pitch the same benefit of lower commission fees to restaurant customers with their restaurant customers.

For now, these companies can only lower those fees, not eradicate them, since restaurants still need drivers and third-party delivery services can most easily provide them. Inhousedelivery.com’s Drivesharing.com platform is only open for registration at the moment, so there’s no telling whether it could provide an alternative pool for drivers that truly manages to do away with sky-high commission fees. 

In-House Delivery Needs to Disrupt Delivery

Some of the talk at last week’s Smart Kitchen Summit revolved around two newish concepts that are especially compelling when it comes to thinking about restaurants: in-house delivery and disrupting third-party delivery. Together, the two could substantially shift the the off-premises meal journey of the future.

Technically, in-house delivery — also called “native delivery” or “direct delivery” — is a decades old practice championed by Domino’s, Jimmy John’s, and other restaurants that have always used their own staff to ferry orders to customers’ doorsteps. But ever since customer demand for delivery went through the roof and then some, most restaurants have found it more economically feasible to offload delivery operations to third-party services like DoorDash and Uber Eats. 

As we cover ad nauseam around here, third-party delivery comes with its own lengthy catalog of grievances, and many restaurants don’t actually make money from those orders. On top of that, they lose control of customer relationships and oftentimes their own branding. 

In-house delivery 2.0, then, is all about restaurants bringing some of that control back under their own rooftops. One SKS panelist mentioned fast-casual chain Panera as a pathbreaker in this area, as the chain still uses its own drivers for many of its orders and only offloads the technical logistics of processing an order to third parties. Bloomin’ Brands, parent company of Outback Steakhouse and Carrabba’s, also handles many of its delivery orders in-house, and Panda Express recently launched its own program that handles the entire delivery journey, from order processing to food transport.

Simultaneously happening is the rise of services like ShiftPixy, which use their technology to power custom-branded websites for restaurants that can process ordering and payments. ShiftPixy also works with restaurants to provide them with drivers, erasing third-party delivery from the process.

All of these approaches to in-house delivery were mentioned during SKS. In a discussion about the rise of ghost kitchens and virtual restaurants, one set of panelists agreed that in the future we will see a wider range of restaurants — major chains and independent mom-and-pop stores — gravitate to in-house delivery as a way of controlling their customer relationships and branding, to say nothing of dodging predatory commission fees from third-party services.

The mention of mom-and-pop shops is important to note. Right now, most can’t afford to build out their own mobile ordering and payments system and pay employees to deliver the food. That territory currently belongs to the Paneras and Panda Expresses of the world, which brings me to our second point: disrupting third-party delivery.

At SKS, more than one person I spoke to predicted that the act of unseating third-party delivery apps’ dominance over restaurants won’t come from imposing more rules and regulations, but from someone bringing a better, cheaper solution to the table. As more restaurant chains with deep pockets take back more of their delivery stack, those solutions might very well surface in the process. 

This is the web version of our weekly newsletter. Subscribe to get all the best restaurant tech news delivered direct to your inbox.

Del Taco Is Launching a Drive-Thru-Only Concept

Following in the footsteps of KFC, Chipotle, Burger King, and other chains, Del Taco is doubling-down on the drive-thru as an important source of sales in the future. The Lake Forest, Calif.-based chain announced on its recent Q3 earnings call it will build a drive-thru-only prototype that can be placed at Del Taco locations with a smaller physical footprint. CEO John Cappasola said during the call this prototype will include “a modernized design, improved functionality, and other operational enhancements,” though he didn’t get more specific than that.

If this story sounds somewhat familiar, it’s because other chains have made similar announcements in the recent past. Most notable among them is Burger King, who several weeks ago announced its own drive-thru-centric design prototype meant to take up less physical space and serve more drive-thru orders in a shorter amount of time. 

Drive-thru has been the most important sales channel for QSRs during 2020’s lockdowns and continued uncertainty over the dining room. However, QSR Magazine’s recent 2020 Drive-Thru Study found that drive-thru times are nearly half a minute slower than they were last year, so it’s not a surprise more chains are redoubling their efforts to make the experience faster and more efficient. With winter fast approaching, outdoor dining is about to get way less appealing to consumers in many regions. Chains will need every order they can get from drive-thru, curbside, and other off-premises channels to make up for lost sales in the dining room/patio over the next several months.

Restaurant Tech ‘Round the Web

A wider slowdown could erase up to 2 million jobs restaurant and retail, according to new research from Gusto cited by Restaurant Dive. The losses could total roughly $190 billion.

Following openings this year of three off-premises stores in Chicago, P.F. Chang’s will expand its to-go-concept to 27 locations by 2021. The company is also testing an in-house delivery service at 10 of its locations in the U.S.

As we reported this week, Burger King is piloting reusable cups and sandwich containers in New York, Portland and Tokyo next year. The program is being done in partnership with TerraCycle’s Loop, which is also doing the McDonald’s reusable cup trial in the U.K.

Report: Indian Delivery Service Zomato Raises an Additional $52M

India-based food delivery service Zomato has raised $52 million in funding from Kora Investments. The Mint was first to report the news, citing a person close to the matter who asked not to be named. The $52 million is, according to that person, part of Zomato’s ongoing Series J funding round that could eventually be as high as $600 million. The new fundraise brings Zomato’s current total funding to $1.2 billion.

Even amidst difficulties brought on by the pandemic, it’s been a very busy year for Zomato, and one filled with more ups than downs. The company bought Uber Eats’ India business in March for $206 million, then raised $5 million in funding in April as part of its ongoing Series J. Like chief rival Swiggy, Zomato also unveiled a grocery delivery service as a way of diversifying its business model.

While Zomato did have to make cuts to its workforce in May, that hasn’t seemingly hampered the company’s overall growth. As of September, Zomato said it had recovered about 80 percent of its pre-pandemic sales. To top all that off, the company plans to go public in the first half of 2021.

Prosus-backed Swiggy is currently Zomato’s main competitor in India, and has raised $1.6 billion to date. However, Amazon’s recent entry into the India food delivery market could mean formidable competition for both Swiggy and Zomato, especially since Amazon already has a presence in India through its PrimeNow and AmazonFresh services.

Last month alone, Zomato closed a $62 million funding from Temasek unit MacRitchie Investments and a $103 million from Tiger Global. The Mint’s source said Kora is expected to make a follow-up investment “of a larger amount,” though no exact figure was given. 

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.

Denver Cracks Down on Third-Party Delivery Practices

Denver, Colo. is the latest U.S. city to introduce mandatory caps on the commission fees third-party delivery services charge restaurants. The Denver City Council this week unanimously approved a 15 percent cap on the amount for delivery per transaction.

It’s the most recent development in an ongoing battle between delivery services like Grubhub and DoorDash and restaurants, regulators, and industry advocates. Delivery services, which normally charge as high as 30 percent per transaction in commission fees, argue that capping these fees undermine services’ ability to effectively operate. (A huge part of delivery services’ revenue comes from commission fees.) Advocates of the fees say the high percentages hurt the smallest restaurants most, and are predatory at a time when many independent businesses have little choice but to use delivery services to fulfill the uptick in off-premises orders. 

Fee caps were first introduced this past spring, just as the pandemic was intensifying and restaurants were closing dining rooms. San Francisco, Chicago, and NYC were among the first U.S. cities to introduce caps. Since then, more than a dozen other cities around the country have joined in, and as the number of COVID-19 cases has ebbed and flowed, some have even extended their caps. At the beginning of September, NYC and Los Angeles both extended their fee caps, while Alameda County and the city of Santa Clara, Calif. implemented them for the first time.

For now, Denver’s caps are set to expire on Feb. 9, though given the uncertain trajectory of both the coronavirus and indoor dining, that could change. Many cities have said fee caps will remain in place as long as emergency orders do, and Denver may yet renew its own deadline.

Nor did Denver’s attempt to regulate third-party delivery stop at fee caps. This week’s ordinance also bans delivery services from adding non-partnered restaurants to their sites. Previously, Grubhub et al. listed restaurants on their platforms regardless of whether the service had an actual contract with the eating establishment. It’s an understatement to say the practice has received some bad press, and California has even gone as far as to outlaw the practice across the state.

Denver may be the latest city to crack down on third-party delivery practices, but it won’t be the last. With more dining rooms closing permanently and virtual restaurants and ghost kitchens now the most popular kid on the block, regulations will multiply over time, rather than go away. With or without a pandemic, the fight for or against the third-party delivery model has only just started.

Grubhub Partners With Lyft to Offer Lyft Pink Members Delivery Perks

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

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

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

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

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

Brazil’s iFood Delivery Service Launches an E-Bike Program for Couriers

Brazil-based delivery service iFood announced today it has launched an electric bike program for its couriers in partnership with mobility company Tembici, according to a press release sent to The Spoon. The program has launched in first-pilot phase, and will provide e-bikes, manual bikes (courtesy of Bike Sampa), and other amenities to couriers working for the iFood delivery service.

The program will be available for a flat weekly fee of R$9.90 (~$1.76 USD). That includes 24/7 access to manual bicycles through Bike Samba’s Bike Itaú app. Bike withdrawals are limited to four-hour time blocks.

Couriers that want more bells ’n’ whistles as well as access to electric bikes will pay a little more. Access to electric bikes costs an extra R$2 (~$0.36 USD) per day. That fee includes up to two trips per day lasting up to four hours each, with a four-hour interval between them. (An additional R$5 charge is included for each hour.) Today’s press release notes that bikes can go 25 km/h (15.5 mph) and have a battery range of 60 km (37 miles) as well as a pedal assistance feature.

In addition to bikes, the program will also provide what it calls an “iFood Pedal Support Point,” which is a physical location at which couriers can check out and return the bikes. The facility will also provide restrooms, water and coffee, a cell phone-charging station, and a dining area. Couriers also get masks, hand sanitizer, and other safety and hygiene items. Use of the facility costs an additional R$2 per day, separate from the fees mentioned above.

Finally, couriers that join iFood Pedal will have access to the program’s Responsa Pedal digital education course.

Providing delivery workers with more bike access seems an obvious way to fulfill more deliveries in a place like São Paulo, which is Latin America’s most densely populated city. The addition of the e-bike option could also speed up delivery times, allowing workers to complete more orders within their given timeframe and make more money. 

We had similar thoughts back in 2018 when Uber bought e-bike service Jump — though that story ended with Uber offloading Jump to Lime in May of this year. That said, Uber never formally integrated the e-bike service with its Eats business.

On the other hand, iFood is merely partnering with Tembici, not buying it, and the new program may turn out to be a much more financially sustainable endeavor that makes mobility easier for more couriers. 

Since the iFood Pedal program is in pilot stage, its availability is currently limited to a select number of couriers in São Paulo. iFood said that by the end of this year, the project plans to have more than 500 bicycles on the streets of that city.

California Law to Ban Food Delivery Services From Adding Non-Partnered Restaurants

California Gov. Gavin Newsom signed a piece of legislation into law this week that hits at third-party delivery services listing non-partnered restaurants on their websites. At the tail-end of yesterday, the Los Angeles Times reported that the first law will require delivery services to sign formal contracts with restaurants before listing those businesses on their platforms.

The law is likely to raise at least some controversy. Under it, third-party delivery services would have to have formal agreements in place with all the restaurants listed on their platforms. Up to now, restaurant listings on third-party delivery sites have been something of a free for all, with delivery services adding restaurants whether or not they have ever made an agreement or even spoken. Restaurants don’t pay the commission fees on these orders. Instead, those get passed to the customer.

Delivery services argue that this practice helps local businesses attract more customers. Restaurants, meanwhile, have complained about inaccurate prices and menu items on those sites, while others have said they receive orders for pickup or delivery items they can’t actually fulfill because they don’t offer off-premises options.

California’s law comes at a time when most restaurants have been more or less forced to take their business off-premises to even stay alive through the upheaval caused by the pandemic. But at the same time, a bunch of other restaurant tech companies are offering alternatives to third-party delivery services. So a restaurant getting listed on Grubhub’s website could be undercutting the businesses own separate efforts to fulfill delivery orders (and retain direct relationships with customers).

Third-party delivery services rely on these non-partnered listings to increase their share of the market and look attractive to potential investors. Having to sign formal agreements with businesses will slow these companies’ ability to some restaurants, and outright halt them from getting others. That in turn would further undercut the still-unprofitable model on which the market is built.

Rhode Island introduced a similar ban earlier this year that is still pending. California’s is set to take effect on Jan. 1, 2021.