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Daily news and analysis about the food tech revolution

Uber Eats

McDonald’s Adds DoorDash as Delivery Partner, Ends Uber Eats Exclusivity Deal

In what’s a bad news Uber Eats but a major win for DoorDash, McDonald’s announced today it has partnered with the latter to expand delivery in the U.S. This officially puts an end to McDonald’s exclusive partnership with Uber Eats, which the quick-service mega-chain had in place since 2017.

According to a press release, McDonald’s and DoorDash will launch the partnership with a pilot at more than 200 locations in the Houston, TX area. That’s slated to kick off on July 29. For those using DashPass, DoorDash’s monthly subscription service, McDonald’s will waive the delivery fee for orders of $12 or more.

It’s a surprising twist, said no one ever. The Uber Eats-McDonald’s exclusive deal technically ended in April of this year, just before Uber IPO’d. While that deal made delivery possible at about 64 percent of McDonald’s locations in the U.S., it seemed like only a matter of time before McDonald’s pulled the plug on the exclusivity factor in order to widen its ability to deliver to new markets. (The exclusive partnership was also a point of friction with some of the chain’s franchise operators.)

As a partner, DoorDash is a no-brainer, since the delivery service operates in all 50 U.S. states and, as I seem to be writing ad infinitum these days, is aggressively going after every suburban market in America.

Chris Kempczinski, President of McDonald’s USA, indicated as much in a statement in the press announcement: “Building on the success of McDelivery in the US, we’re excited to make McDelivery accessible to customers on DoorDash, which is available in all 50 states and reaches 80% of Americans, making it even more convenient for our customers to enjoy their favorite McDonald’s menu items on their terms.”

On the restaurant-tech front, two parties have integrated their systems so that DoorDash orders go directly to the McDonald’s POS system, speeding up the order process and (hopefully) making life easier for franchisees and employees working with the platform.

One area the press release didn’t mention but that’s worth keeping an eye on when it comes to McDonald’s news: artificial intelligence. McDonald’s acquired Dynamic Yield earlier this year, and has since implemented its AI tech in drive thrus, with plans to expand that program to kiosks. And not long ago, word got out that McDonald’s has actually been testing deep-frying robots to automated beverage equipment. It’s probably only a matter of time before AI makes its way to delivery, and something like a McDonald’s-DoorDash-Dynamic Yield delivery platform that can improve recommendations and personalize menus for customers doesn’t seem out of the realm of possibility.

ShiftPixy’s Delivery Tech Promises Restaurant Chains More Brand Control

If the last year was was all about restaurants realizing they must do delivery, the next 12 months will be about how they’re doing it, and this question in particular: Do you go with a third-party service à la Uber Eats, or go it alone?

Those in favor of third-party delivery cite increased visibility, lower costs (you don’t have to hire your own driver fleet), and fewer technical responsibilities. Others say they will never use it because of the lack of control over service and brand integrity that happens when one signs on with a third-party service.

Over the phone last week, ShiftPixy cofounder and CEO Scott Absher seemed to agree with the latter argument: “How could a brand that has spent maybe billions of dollars over decades or generations to curate their brand suddenly surrender that brand and their customer experience and data to a kid in a red golf shirt and cap?” he asks.

He went into detail with me about how a restaurant’s choices no longer have to be the kid in the golf shirt or no delivery program at all. There’s a new middle ground afoot, and ShiftPixy is helping to establish it.

The Irvine, CA-based company makes a software stack for restaurants that was originally designed to help businesses combat high employee turnover. According to demos shared by ShiftPixy, when a restaurant signs up with the company, they are given access to a network of workers, called “Shifters.” The ShiftPixy app uses AI to rigorously onboard these Shifters, who undergo the same vetting any job candidate would, including background checks and providing proof of citizenship, driving records, and other details. Once approved, these Shifters become W-2 employees not of the restaurant but of ShiftPixy. When the restaurant needs to fill a shift, they can notify their network of nearby Shifters, who pick up work in much the same way Uber drivers pick up people to drive to the airport.

But Absher, who helped found the company in 2015, says ShiftPixy quickly became acquainted with what he calls the “dark side” of third-party food delivery: incorrect food orders, cold or poor-quality food, orders never arriving, and angry customers galore, to name a few. More importantly, users were getting frustrated with the brands themselves, though none of the ordering or fulfillment took place within a restaurant chain’s ecosystem.

“All of that anger was rolling back on those multi-unit operators,” he says, referring largely to national chains. But, he adds, these chains, “didn’t even know when a customer [was] angry so they could fix it.”

So ShiftPixy built a delivery component for its technology. For restaurants that use it, the ShiftPixy architecture works behind the scenes of a restaurant’s consumer-facing app to notify drivers of potential orders. This isn’t terribly different from the way any other third party operates the last mile of food delivery. It’s still a kid in a golf shirt picking your food up and dropping it at the door.

What is different is the slew of potential benefits restaurants — larger chains and their franchisees in particular — could reap from this arrangement. Through the deal they set with ShiftPixy, they’re not paying a fee on each and every delivery transaction made on a given day the way they would with Grubhub or Uber Eats. Most big-brand franchisees are locked into certain pricing structures and policies — having to choose a specific food distributor, for example — they can’t just dump to offset the cost of those fees. So a system that does away with them entirely could mean these restaurant operators reap the benefits of delivery without incurring the financial setbacks of working with traditional third-party services.

And while restaurants still can’t control what happens to the food when the driver picks it up, they can at least control the brand, and be aware of potential issues. When a restaurant uses ShiftPixy, customers don’t leave the brand ecosystem to order and pay for their meal, or to leave feedback or contact customer service. It all happens within the restaurant’s own mobile app, with ShiftPixy in the background, powering the last-mile logistics aspect. This, Absher reasons, could go a long way towards helping brands with their image. “The issue is brand integrity and the customer experience. As soon as that order goes out the door you’ve surrendered your customer experience,” he says.

This is a larger trend we’ll start to hear more about as delivery becomes, pardon the pun, baked into daily restaurant operations and more companies come to market with solutions aimed at national brands and their franchisees. Olo, whom Absher references during our talk, is another such company looking to help restaurants drive more delivery orders through their own in-house ecosystems and maintain more brand integrity in the process.

Absher can’t yet name these larger brands ShiftPixy is currently in talks with, though Denny’s and Carl’s Junior come up in conversation. He also says the company is “getting a lot of viral introductions” as franchisees jump onboard and encourage other nearby franchisees from the same brand to do likewise.

“When you talk to the operators, that’s where it really gets interesting,” he says. “There are a lot of mixed opinions about third party [delivery]. It’s a very confusing landscape. It looks to me like we’re entering the market at the right time in the midst of confusion. We’re hopefully being a source of help and clarity.”

How the Uber Eats ‘Dine-In’ Feature Could Affect Restaurant Operations

Uber Eats now wants to streamline more than just your food delivery order. The company made an addition this week when it announced it will also speed up your experience when you eat in the actual restaurant, too.

A tipster dropped a line to TechCrunch detailing the new Uber Eats Dine-In feature, which lets customers order their food ahead, so there’s very little wait from the time a person enters the restaurant to when they get their meal.

To use the feature, customers log into the Uber Eats app and choose the “dine-in” option. The app shows how long the food will take to prepare and notifies you when it’s nearly ready, which is your cue to head over to the restaurant and take a seat. Users can leave a tip for the server in the app. For this feature, Uber Eats also waives the usual delivery and service fees.

Image: Jenn Marston/The Spoon

The whole process is very much like Allset, a competitor that also offers a streamlined process for dining in-house.

Beyond how Uber Eats’ entrance into this area might affect Allset’s business, the move also raises questions about how an uptick in these sorts of apps could affect restaurant operations. Within Uber Eats’ Dine-In option, users are shown how long the food will take to prepare (see screenshots above). It’s unclear if that time calculation factors in how busy the kitchen is at the moment or, for that matter, if the restaurant has the seating to accommodate the order. The app seems like an ideal way for a person to speed up a lunch in the middle of the workday or a pre-movie dinner. But those are both times restaurants tend to get heavy traffic anyway, so it remains to be seen if adding another sales channel to the mix will make restaurants’ lives easier or more hectic.

One area Uber Dine-In could provide a boost is for off-peak times. As TC pointed out, restaurants could use the Dine-In feature to attract more customers during less busy times by running promotions through the app itself or by subsidizing an Uber ride to the restaurant. In theory, at least, these kinds of promotions could provide a small revenue boost for a restaurant.

Restaurant operations aside, apps like Dine-In and Allset do raise the question of why you would go out to eat in the first place if you don’t have the time or patience to wait 11 minutes for your food to arrive after ordering. There does seem to be something about these features that would make, say, a pre-movie meal feel more like just-another-transaction rather than an evening out with friends or family. That’s in the eye of the beholder, of course, and as we see more apps like these coming to market, we’ll hear plenty more pros and cons from both side of that argument.

Now the Top Food Delivery Service, DoorDash Stands Behind Its Controversial Pay Structure

While Grubhub made a lot of headlines this week as the poster child for controversial restaurant fees, DoorDash was all over the news for its controversial stance on how it pays its drivers.

Once considered the underdog of third-party delivery, DoorDash has spent the last year or so doubling down on its expansion efforts. The service became the first of the top four (which includes Grubhub, Uber Eats, and Postmates) to be available in all 50 U.S. states, and it’s seemingly made its way into every nook and cranny of suburban America through high-profile partnerships with major chain restaurants like The Cheesecake Factory, Chipotle, and the ubiquitous Chili’s. It’s also raised lots and lots (and lots) of funding.

So far those expansion efforts are paying off. In the last week, news surfaced that DoorDash now holds the number one spot in terms of marketshare for third-party food delivery services, unseating longtime leader Grubhub. Currently, DoorDash is valued at $12.6 billion, which is almost double the $6.5 billion market cap of the publicly traded Grubhub.

The growth isn’t without controversy, however, because in addition doubling down on its expansion plans, DoorDash has also, it seems, continued its controversial pay structure for drivers that many feel is unethical. TechCrunch reminded us of that point yesterday when it called out a blog post by DoorDash CEO Tony Xu that was meant highlight DoorDash’s commitment to “transparency” but really just wound up highlighting the fact that despite its $12 billion-plus valuation, the company seems to be barely paying its drivers.

“With our current pay model, Dashers see a guaranteed minimum — including tips — prior to accepting a delivery,” Xu wrote in the post.

For every delivery the DoorDash driver (also called a “Dasher”) takes, they are guaranteed a minimum pay amount. (Dashers see this number before they ever accept or decline a job.) Unlike a serving job in a brick-and-mortar restaurant, that guaranteed minimum pay isn’t derived from any kind of hourly wage. Rather, DoorDash pays a $1 base fee then uses the tip from that order to count towards that minimum guarantee. If tips plus that $1 aren’t enough, DoorDash makes up for the rest:

Image via DoorDash.

Where this becomes really problematic is when drivers (which the company calls Dashers) get an especially large tip that winds up not being a tip, but instead subsidizing the minimum guarantee:

Image via DoorDash.

It’s the same pay structure that made waves a few months ago for services like Instacart and Amazon Flex. Instacart wound up changing its structure and apologizing to workers. Amazon stood firmly by its policy, and it seems DoorDash has as well. If Xu’s blog post is anything to go by, it seems that rather than backpedal on its controversial model, DoorDash is just taking further steps to make sure the pay structure breakdown is 100 percent apparent — to Dashers, at least. One small step for transparency, one giant leap backwards for the ethics of the gig economy. Or as labor rights group Working Washington said in a statement to TC, “Talking about transparency is good. And admitting you pay $1/job is better than denying it. But $1 is still $1.”

So what do we do about it?

The easiest solution would be for more customers to just skip the “tip” option in the DoorDash interface and tip in cash. That’s unlikely, given how integrated digital tipping is in both our apps and our lives at this point. Plus, consumers shouldn’t have to go searching through FAQ pages to find out exactly where their tip money goes during a transaction. If DoorDash really wants to tout transparency as one of its priorities and values, it should be making clearer to its customers, within the digital transaction process, where their money goes. Leading someone to believe they’re paying a gratuity when they’re really just subsidizing a base pay is just flat-out deceptive, and it’s the sort of thing that could erode customer trust over time.

Including customer relationships in those transparency goals should definitely be a priority for DoorDash. But at the end of the day, giving Dashers a fair wage rests on the shoulders of the company itself, not its paying customers. Some, like Working Washington’s Pay Up Campaign, want a minimum pay wage for workers of $15/hour plus expenses. That’s a larger conversation that’s making its way around many parts of the gig economy right now, and it’s one we’ll likely hear more debate around in the coming months.

Even if DoorDash doesn’t adopt that policy, you’d think a company valued at over $12 billion could find some kind of middle ground between $15 minimum wage and $1 to pay its workers, and to do that without roping unknowing customers into the process. Perhaps amid plans to tackle the whole of suburbia, DoorDash should tackle how to treat the people building that empire more fairly.

Taster Raises $8M in New Funding for Delivery-Only Brands to Europe

Taster, a French startup who creates restaurant brands made specifically for delivery, has raised $8 million in a new funding round. The round was led by Battery Ventures, with participation from existing investors Heartcore Capital, LocalGlobe, GFC and Marc Ménasé. This brings Taster’s total funding to $13.1 million.

The company currently owns and operates three “restaurants,” which it runs out of ghost kitchens in Paris, London, and Madrid. Out Fry is a Korean Fried Chicken concept, O Ke Kai specializes in Hawaiian food, and Mission Saigon makes Vietnamese fare.

Founder Anton Soulier got the idea for Taster after working at Deliveroo and becoming disenchanted with the quality of the food in the delivery realm. Taster, which he founded in 2017, works with Michelin Star chefs to keep the food as high-quality as possible, and locally sourced, too. The company works out of 12 different kitchens across Paris, London, and Madrid, though it doesn’t actually own the facilities. Instead, Taster partners with companies like Travis Kalanick’s CloudKitchens, who rent ghost kitchen space out to restaurants.

For the actual delivery part, Taster works with Deliveroo, Uber Eats, and Glovo, which means it doesn’t have to manage the logistics behind that part of the operation, and can instead focus on what goes on in the kitchen.

Taster is one of a few companies in Europe building a business off delivery-only restaurant concepts. Frichti is a fellow French startup, delivering pre-made meals customers heat up. It’s notable in particular for owning and operating the full delivery stack, from taking orders to making the food to cycling it over to your apartment.

Elsewhere, Berlin, Germay-based Keatz recently raised €12 million for its virtual kitchen network, which it uses to create in-house restaurant brands much like Taster.

To date, Taster says it employs 115 people, 100 of whom work in the kitchens. The company has already developed some tech that streamlines back-of-house operations like inventory management, supply chain, billing, and integrating delivery platforms. Taster says the new funds will go towards launching three new food brands by the end of 2019 and the company plans to hire more talent in tech and engineering, as well as supply chain and marketing.

What to Expect at Today’s Oversight Hearing for Third-Party Food Delivery in NYC

Today, New York City will hold its first-ever oversight hearing for third-party food delivery apps and the effect they have on local restaurants.

The hearing, set to take place this afternoon, will focus specifically on the fees Grubhub and other companies charge restaurants for use of their services. Perhaps even more significantly, as the NY Post reported recently, it could set the stage for potential government action that would impact third-party delivery operations in NYC.

Titled “The Changing Market for Food Delivery,” the hearing, held by the council’s Committee on Small Business and chaired by Bronx Councilman Mark Gjonaj, invites comments from all stakeholders in the business: restaurateurs, representatives from delivery services, and customers. Grubhub, who also owns Seamless, has already confirmed that a spokesperson will be present. There’s no word on whether people from Uber Eats, DoorDash, or Postmates will attend. The hearing starts at 1 p.m. at 250 W. Broadway in Manhattan.

Having a food delivery strategy is at this point table stakes for most restaurants. But not every business has the brand reach, money, and resources to go it alone à la national chains like Jimmy John’s or Olive Garden. For many, it makes more sense to pay Grubhub et al a fee and let them handle not only shuttling the food from restaurant to customer 24/7, but also the back-end logistics (like order processing and tracking) and even some marketing aspects.

Now, however, many are calling these fees into question. Depending on the terms of the deal and the specific delivery company (e.g., Grubhub versus Uber Eats), third-party services charge the restaurant anywhere between 12 and 30 percent of the final check on each order. It’s why you’ll sometimes see a restaurant charge a little more for an item to be delivered as opposed to eating in house. Third-party services often tout the uptick in orders as a way to offset these costs, which is fine if you’re McDonald’s but less effective if you’re the independently owned deli down the block.

Atop those fees and the concerns surrounding them come reports of late of third-party delivery services charging restaurants hidden fees, such as calls made through the dedicated phone numbers Grubhub and other service set up for restaurants. A class-action lawsuit filed in May of 2019 claimed that Grubhub has been charging for calls made to restaurants via Grubhub’s app, even when the calls didn’t result in an actual order being placed and fulfilled. While that lawsuit was filed in Pennsylvania, the NY Post reports that New York restauranteurs have made similar complaints, with some businesses being charged $9 and more for phone calls that didn’t result in orders. Calls for things like dinner reservations and general customer complaints are also being quietly charged, the Post said.

In turn, restaurants have been demanding refunds from delivery partners, only to be told said refunds are only good on orders going back 60 days (though one unnamed restaurant got a refund from Grubhub to the tune of $10,000 for charges dating back to 2014).

Will all these matters be discussed this afternoon at the hearing? Undoubtedly. Will they make a difference in how third-party delivery companies do business? It’s too soon to tell, but depending on how the discussion advances, the hearing could have serious effects on third-party delivery operations in NYC.

“There is always the potential that this hearing will lead to an investigative hearing from the public advocate, the city comptroller or the state attorney general,” Councilman Gjonaj told the Post in an exclusive interview.

Such action could result in legislation that limits the percentage third-party services can charge restaurants. Or, as the Post noted, it could require Grubhub and other companies to get “disclosed and fingerprinted” for the thousands of restaurants they work with, since NYC law requires anyone who shares revenues in a restaurant to be listed on the liquor license.

And there’s always the possibility of a ripple effect. The tone set by today’s gathering could influence whether other cities hold similar hearings, as well as what those hearings mean for the way third-party services will operate in the future across the country.

One thing is certain: the volume has been cranked up on this side of the delivery conversation, and it’s not going to soften any time soon as more stakeholders in the restaurant business call into question the line between a right and an abuse when it comes to doing business.

We’ll be keeping an eye on today’s events and updating our coverage accordingly. Stay tuned.

Newsletter: Making the Convenience of Delivery More Convenient, Impractical Home Kitchen Gadgets

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Talk to most individuals in today’s restaurant biz, and they’ll tell you that delivery is table stakes at this point. But a slew of news stories from the last week suggests some aren’t satisfied with simply inking a deal with a third-party service. Now, companies are adding haute cuisine, drones, and alternative locations to the list of things they can offer via delivery.

Yesterday, 7-Eleven joined these efforts by releasing 7NOW Pins, a feature that lets customers order via the convenience store chain’s 7NOW app and get their goods delivered to public places like parks, beaches, and sports stadiums. For 7-Eleven, delivering to these so-called hot spots makes a lot of sense, since drinking Slurpees is practically as common an outdoor activity as volleyball.

7-Eleven’s idea isn’t new. Domino’s launched a similar program in April of 2018 and has since been delivering pies to more than 200,000 of these public spaces around the country.

Domino’s, however, was focused more this past week on another delivery-related initiative: in-car ordering. Ever since it announced a partnership with Xevo, who makes in-car commerce technology, the pizza chain has been working to bring in-car ordering for delivery and pickup orders to more drivers around the U.S. As of last week, Chevrolet owners whose cars are equipped with the company’s Marketplace platform can order Domino’s while they’re still en route to home, and, because of the way Marketplace is configured, can do so without ever having to touch their smartphone.

Uber Eats Takes Haute Cuisine to New Heights
But maybe pizza and Slurpees aren’t your thing. No worries. Other companies are applying the convenience of delivery to more upscale foods, including Juniper & Ivy’s “In-N-Haute” burger, which Uber Eats will soon make available via drone in San Diego. While as of right now the drones will be dropping orders off with an Uber Eats driver who will finish the delivery, using them for even part of the process can save significant time, which means the $21 dollar hamburger would theoretically reach your door in a much fresher state.

Interestingly, Uber Eats’ other drone delivery test is with McDonald’s, the polar opposite of haute cuisine. But testing with two such extremes makes sense. As I wrote recently:

Whichever is more successful in terms of both quality of the food when it finally arrives at your door step as well as overall customer satisfaction with the experience, will tell Uber a lot about where to bet its hand in the upcoming drone delivery race.

Now if they could just figure out how to drone-drop haute burgers to my next beach trip . . .

The mycusini chocolate 3D printer

Impractical Cooking Fun for the Whole Family
Back in the world of at-home culinary devices, Mike Wolf dug into an impractical-but-so-cool activity for the kitchen: 3D printing chocolate.

The mycusini printer functions much like other 3D printers, only in this case it dispenses chocolate layer by layer. The device is expected to ship to backers by the end of 2019. Sadly for Mike and other U.S. fans of choco-printing, mycusini will only be available in Europe, Australia, and New Zealand initially.

Statesiders might instead look to McCormick’s new gimmick: a grill integrated with a DJ system that changes tracks based on what you’re cooking. As Catherine Lamb wrote this week, the SUMR HITS 5000 grill “links pre-recorded music and sounds to a weight-sensitive condiment tray and the grill itself. So when you pick up the hot sauce or flip your veggie burger, new sound bites play from a speaker presumably embedded somewhere inside the grill.”

While the SUMR HITS 5000 grill probably won’t be making it on checklists of any serious grillers, it could at the very least provide a few entertaining moments for upcoming summer BBQs this year. Throw in an order of delivery Slurpees, and you have yourself a legit party.

Until next time,

Jenn

Uber Drones to Drop Fancy In-N-Haute Burgers on San Diego

“Uber,” “drones,” and “delivery” are three words we’re going to see a lot of in future. Late last week, word got out that the company has been testing food delivery via drones in San Diego, dropping McDonald’s meals off at set locations.

This week, we learned Uber has also added some fine dining to the drone delivery menu from Juniper & Ivy. The upscale restaurant, which is the brainchild of Richard Blais and Mike Rosen, will make its “In-N-Haute” burger available through Uber Eats for drone delivery once the program kicks off. As the name suggests, item is a $21 take on In-N-Out’s signature “double-double” burger, complete with brioche bun and a fancy take on In-N-Out’s famous “animal-style” sauce.

Once these overpriced burgers hit the air, supplies will reportedly be very limited, with no more than a dozen orders available on any given evening, according to Sandiagoville.com.

For the Uber delivery program, food isn’t dropped via drone directly on your doorstep. Rather, the drone flies it to a set drop-off location where an Uber Eats driver will retrieve it and take it the rest of the way. As my colleague Chris Albrecht pointed out when he wrote about the program last week, “This may seem overly complicated, but Uber says a drone can travel 1.5 miles in 7 minutes versus 21 minutes by ground. So a drone could fly past city congestion to shave off delivery time, even with a pick-up car involved.”

Shaving time off the delivery process will be especially important for expensive burgers that could go cold very quickly while in transit.

The In-N-Haute will be Juniper & Ivy’s only menu item available for drone delivery once Uber’s program kicks off, which will be in either late summer or early fall 2019. No word yet as to whether the restaurant will add more items as Uber’s delivery programs gets its legs.

What will be most interesting about this test is whether people will actually pay $21 (plus delivery fees and tip) to get a high-end burger delivered and, more important, if they’d do it on a regular basis. That’s presumably why Uber’s chosen to test its drone deliveries via two extremes: haute cuisine and fast food. Whichever is more successful in terms of both quality of the food when it finally arrives at your door step as well as overall customer satisfaction with the experience, will tell Uber a lot about where to bet its hand in the upcoming drone delivery race.

Dunkin’ Is Testing Delivery, Geofencing in New York City

Dunkin’ announced this morning it is now available for delivery in all five boroughs of New York City.

Dunkin’ is already in select cities in the U.S. through partnerships with Grubhub as well as DoorDash. For the NYC test market, Dunkin’ will be available exclusively through Grubhub and Seamless (Grubhub’s NYC-specific brand).

Grubhub isn’t a surprising choice here. In major urban areas — like NYC, LA, Philadephia, Boston, Chicago, and Washington, D.C. — the company is still the leader of third-party delivery when it comes to market share.

For the Dunkin’-NYC partnership, Grubhub will integrate orders directly into each store location’s POS system, a feature that’s getting more and more important with each new delivery partnership that surfaces.

But Grubhub didn’t stop there in terms of using technology to enhance the Dunkin’ deal. It also drew a geofence around each Dunkin’ location in NYC (there are over 400) in order to monitor traffic in surrounding areas and where couriers are in relation to the store making their order.

Seth Priebatsch, the head of enterprise at Grubhub, referred to this as “our ‘just in time delivery flow’” when he spoke to NRN this morning. Thanks to the technology, Dunkin’ will start a delivery order based on how far away the courier is and how large the order is. For bigger orders, Dunkin’ starts making an them when the courier is 10 minutes away; for smaller orders, the store will probably need just a few minutes to time an order with a courier’s arrival.

This geofencing method is something we’ll see more of as restaurant chains look to improve both timeliness and quality of their delivery orders. And Dunkin’ isn’t the first — McDonald’s already uses it, and Burger King pulled a well-publicized geofencing stunt late last year that wound up highlighting the value of the technology when it comes to attracting and retaining customers.

Packaging is the other aspect of the Dunkin’-Grubhub deal that bears noting. Grubhub said all couriers are equipped with insulated bags with which to deliver drinks, whether hot or cold. But it seems time and temperature are still the two major hurdles when it comes to coffee delivery, even for a chain as large as Dunkin’ (or, for that matter, Starbucks and Uber Eats). Even Priebatsch noted that Dunkin’ is currently trying to walk the line between serving a large delivery radius without making travelers go so far that the quality of the product gets diminished in the process.

While there was no news of Grubhub using anything beyond the standard insulated bag, packaging seems an areas ripe for disruption in food delivery, especially as as more and more goods like hot coffee and frozen smoothies go mobile.

Uber Is Using Uber Vouchers to Help Restaurants Drive More Foot Traffic

Uber may have Uber Eats to drive food directly to customer’s doors, but the ride-sharing service has made it clear in the last few months it’s still trying to integrate food experiences directly into its main app. Besides offering some Uber Eats functionality through the ride-share app, the company also recently released Uber Vouchers. The latter promises to help move foot traffic into restaurants and other retail venues by offering potential customers a ride-share credit for that destination. In other words, Uber and/or the restaurant will pay for your ride to dinner.

Uber Vouchers launched in April, but thanks to a podcast interview that dropped today on Nation’s Restaurant News, we now have a better idea of how it’s working in the food world and what it could mean for restaurant traffic in the future.

NRN spoke with Sherif Mityas, the chief experience officer for TGI Friday’s (TGIF), to get the lowdown on how the feature works. Restaurants sign up with Uber Vouchers, then decide which times of day the want the vouchers to be valid and how much of the ride they’re willing to cover to get the customer on premises.

Since Uber is the one to issue the vouchers, they work for both TGIF loyalty members as well as Uber customers just looking for a place to eat that night. Uber will send the user a code tied specifically to their account. Selecting “TGI Friday’s” as the destination will trigger that code to give the user a discount. Vouchers can either cover a customer’s trip to the restaurant or cover their ride home (see below).

The goal is to drive foot traffic to the restaurant, something that’s getting increasingly more difficult at a time when consumers are upping the amount they spend on food delivery. The vouchers in turn create incentive for customers to go to restaurant during key times, like happy hour.

As far as who pays for the ride on the back end, Mityas says it varies. At the moment, TGIF will pay all or at least part of a customer’s ride to or from the restaurant (in special cases they’ll both ways). Deciding which rides to pay for comes down to where the customer is going in relation to that particular TGIF location. Consider the happy hour example. Let’s say TGIF knows the average ride to or from a particular TGIF costs between $8 and $10. The Uber voucher during that time would cover roughly that amount. If a customer is using the voucher and needs to travel farther, they pay the difference.

One thing that has yet to be specified is how Uber and TGIF can track whether someone actually goes inside the restaurant and orders a meal.

Even with that question mark, Mityas confirmed on the podcast that the restaurant can make up the $8 or $9 it spends paying for someone’s ride through the extra volume the Vouchers program brings overall. This is why Uber Vouchers work especially well for happy hours and those dining later in the evening, where alcohol is typically a big part of the bill than it is at, say, 6 p.m., when lots of families are dining out.

Ride vouchers are also a way for the restaurant to promote special offers, like deals on drinks or appetizers, which can be promoted through the user’s Uber account. And, on a practical level, an Uber Voucher might get someone home more safely after one too many on a Friday night.

Uber Vouchers as yet hasn’t partnered with another major restaurant chain, though it does also work with MGM Resorts, whose entertainment options in Las Vegas provide more than a few reasons to need a voucher instead of your car.

Mityas says Uber Vouchers is active at between 40 and 50 TGIF locations on the east coast. Right now the chain is still in testing phase with the program, but should all go well, he sees a nationwide expansion of the program in the future.

Uber Aims to Start Testing Drone Food Delivery in San Diego This Summer

We knew Uber was accelerating its drone program, and as of today, we have a few more clues as to just just how fast the company is going. Bloomberg got a first-hand look at Uber Elevate, the company’s drone division, and how it would work for food delivery. Though the test flight Bloomberg watched was a bust because of the weather, there was still a bunch we learned from the article.

Uber has been testing drone food delivery with McDonald’s in San Diego this year, developing flight paths and even working on new forms of packaging to keep food at the right temperatures. As of now Uber’s plan isn’t to fly a drone directly to your driveway. Instead, it will fly to a drop-off location where an Uber Eats driver in a car will pick it up and bring it the rest of the way. Eventually, Uber predicts it will land the drone on the top of parked Uber cars.

This may seem overly complicated, but Uber says a drone can travel 1.5 miles in 7 minutes versus 21 minutes by ground. So a drone could fly past city congestion to shave off delivery time, even with a pick-up car involved.

But that’s still a ways away for the company, which has not gotten FAA approval for commercial delivery yet. Uber told Bloomberg that it believes it is three years out from drone delivery happening in select markets.

In the meantime, there’s plenty of issues that Uber will need to work out. Inclement weather, for one, the danger posed by mid-air collisions into trees, wires or other drones for another, and also the noise (just ask the town of Canberra, Australia about the drone of drones).

Additionally, Uber is going to have to contend with fleets of other drones in the sky, all vying to bring you a burrito. Last week, Amazon unveiled it’s high-tech transforming delivery drone and said it would be making commercial deliveries “within months.” And earlier this year, Google’s Wing division got FAA approval to make drone deliveries.

Uber Elevate will evidently unveil a new drone of its own later this year that can reach speeds of 70 mph. The race to bring drone delivery to market is certainly speeding up.

DoorDash Inks Exclusive Delivery Deal With Chili’s

DoorDash’s breakneck expansion across the U.S. continues this week, with the the third-party delivery service announcing an exclusive deal with casual dining chain Chili’s.

According to a press release sent via email, the partnership takes effect immediately at over 1,000 participating Chili’s restaurants in the U.S.

Chili’s, who is something of a poster child for the fast-casual American dining scene, has been vetting third-party delivery services for some time. At the end of April, the company said it was looking for a delivery partner that could adequately cover the suburban markets, where Chili’s has a substantial presence. In that light, DoorDash seems the obvious pick, as it currently holds 30 percent of the market share in sales and is the only third-party delivery company currently operating in all 50 U.S. states (as well as in 50 Canadian cities).

But DoorDash’s ability to integrate with Chili’s existing POS system might have been the real determining factor. Chili’s, along with its parent company, Brinker Internatoinal, has been skeptical about third-party delivery services overall. Brinker CEO Wyman Roberts said back in January that his company was “. . . cautious on business model implications and significant fees, but more importantly, the impact it has on our systems isn’t great.” In the same interview, Roberts added that, “From a technology standpoint, given that so many of these third parties are really priding themselves on being experts, we’re challenging them to integrate better.”

Integrating DoorDash directly into the restaurant chain’s POS system means all DoorDash orders are sent directly to Chili’s, without a server needing to manually input the information. As well, a direct integration means it’s easier and faster for Chili’s to onboard more of its locations onto this new delivery program.

This ability to integrate almost seamlessly into existing restaurant systems may be key for third-party services in future as they rush to gain and retain customers. All of the top services — Grubhub, Uber Eats, and Postmates along with DoorDash — offer POS integration capabilities. The question at this point appears to be more around who can offer it at the best price point for restaurants, and do so without introducing a lot of disruption to day-to-day operations. Might operational efficiency be yet-another area in which DoorDash can stand out?

DoorDash raised another $600 million in funding this past May, bringing the company’s total funding to $2 billion. This came on the heels of a $400 million Series F round raised in February of 2019. DoorDash has also said that since that Series F round, its business has grown 60 percent. Pair those numbers with the company’s continued and aggressive push across North America, as well as high-profile restaurant partnerships like the Chili’s deal, and there’s reason to suspect the company could be well on its way to nabbing the top spot in the market for third-party delivery.