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The Spoon

Daily news and analysis about the food tech revolution

Uber Eats

Starbucks Expands Uber Eats Delivery Pilot Across U.S.

Starbucks this morning announced (via an email) it will expand the delivery pilot program it runs in Miami with Uber Eats to other U.S. cities. Starting today, the program is available in San Francisco, and will move to NYC, DC, Boston, Chicago, and Los Angeles over the next few weeks.

Starbucks has been testing out the delivery concept since 2015, when it launched a partnership in the U.S. with Postmates, which it has maintained over the last few years. Then, in 2018, Starbucks teamed up with Uber Eats in Miami to offer “favorite items that have been tested for delivery.” This latest round of cities is an expansion of that pilot.

For the Miami pilot, the caramel Frappucino has wound up being the most popular item ordered thus far. That isn’t surprising, since blended ice, sugar, and whatever else they put in those things will travel a lot better than a piping hot cup of black coffee (though fewer people probably want that in Miami anyway).

Which brings up a good point: hot liquids don’t travel well (duh). The times I’ve ordered coffee from the deli down the block, I’ve gotten a paper cup quadruple-wrapped in plastic cellophane containing a sort-of hot beverage. I’ve always blamed myself for being lazy enough to get coffee delivered in the first place. But if pricey coffee drinks become a standard delivery item, companies like Starbucks may need to think about more delivery-friendly packaging.

Still, I doubt packaging will deter people. The addition of Japan as a delivery market last year suggests the Starbucks-Uber Eats pilot is thus-far fruitful. Others — namely, Dunkin’ and McDonalds (also via Uber Eats) — are also jumping on the coffee-delivery trend, which will fuel more competition in the market.

Uber Eats, meanwhile, is ramping up its efforts across many areas of the food-delivery space. The company has been looking to use drones for delivery, and has exclusive partnerships with virtual (aka ghost) kitchens, too. While I speculate here, one could even imagine Starbucks and Uber Eats setting up a ghost kitchen to handle the influx of extra orders an expanded delivery partnership could bring.

Finally, the Uber IPO has been looming in the future for some time, though it, along with Lyft’s, are reportedly stalled at the moment due to the government shutdown. In any case, expanding a partnership in a space growing as fast as a delivery seems a well-calculated move for Uber Eats, right now and when that IPO eventually does happen.

DoorDash Now Delivers Food to All 50 U.S. States

DoorDash just announced services in three new states, and with that it reached a new milestone: becoming the first third-party delivery service officially operating in all 50 states. According to a press release sent out today, that makes DoorDash available to roughly 80 percent of Americans. As is pretty much customary at this point, DoorDash will offer a deal in honor of today’s news: for today, customers will only pay a 50-cent delivery fee for all orders over $10.

The milestone comes with the addition of DoorDash service to Montana (Billings, Bozeman, Missoula), Alaska (Anchorage), and South Dakota (Sioux Falls), and brings the total number of cities where DoorDash delivers to over 3,300. By comparison, Grubhub says it currently serves 1,700 U.S. cities (plus London). Uber Eats, meanwhile, serves only a few hundred in the U.S. but is expanding all over the map, including to the Middle East and Asia. However, number of cities doesn’t necessarily equal the most marketshare, and DoorDash is still third behind Grubhub and Uber Eats in terms of customers.

It should also be noted that expanding into these new cities (as well as a few in North Dakota and West Virginia) doesn’t mean DoorDash gets a break from the competition, be it Uber Eats and Grubhub or the slew of other services who’ve long operated in small- and mid-sized U.S. cities.

Back in December, we wrote that these places are a new battleground for third-party delivery, now that major metropolises like LA and NYC are (mostly) saturated. To that end, Bite Squad, who was acquired by Waitr in December, is already in Sioux Falls, as is a small company called Zip Dish. BringMeThat operates in Alaska, and CafeCourier is in Missoula, MT.

The U.S. is a big place, but it seems our appetites for delivery are even bigger. I wouldn’t be surprised if we see DoorDash or any of the other top three look to acquire some of these smaller companies at some point in the near future. Stay tuned: the winning battleground could wind up being where we least expect.

Uber Q3 Earnings: Eats Grows 150 Percent YOY, Does $2.1 Billion in Gross Bookings

Uber released it third quarter earnings today, and though the company continues to lose money ($939 million in Q3), its food delivery business, Uber Eats, generated $2.1 billion in gross bookings (money collected before driver payouts), which is an increase of 150 percent over the same time period last year.

This is the first time Uber has broken out Eats’ earnings, and it’s easy to understand why. The company is expected to IPO next year, and it needs to shine a light on all the bright spots it can.

Uber Eats has been on a tear this past year: according to the company, it will reach 70 percent of the U.S. population by the end of 2018. Throughout the year, we’ve also seen Uber invest in the Eats division with the acquisitions of delivery only restaurant Ando, and restaurant POS software company orderTalk. It switched from imposing a flat delivery fee to charging on a sliding scale based on delivery distance. Earlier this month, the company launched Uber Eats for Business to help companies manage food delivery for employees.

But it’s not just about what Uber has done in the past. This earnings report helps illustrate how important Uber Eats will be to the company going forward. Uber CEO, Dara Khosrowshahi, has said that in ten year’s time, ride hailing will account for less than half of the company’s business, with services like Eats playing a larger role.

To that end, the company has been laying out some pretty big ideas for the future of moving food around. In October, Khosrowshahi indicated that delivering groceries would be a logical move for Uber (with $3.5 billion invested in food and grocery delivery startups this year, latecomer Uber’s competition will be fierce). Then, of course, later that month, an Uber job listing showed that the company wants to ramp up commercial drone delivery quickly (I still wish they would focus on delivery robots first, though).

As the company moves towards an IPO, we should expect to see more investment in Eats to keep that growth (and good earnings!) inertia going. Perhaps Uber should buy Smart Kitchen Summit Startup Showcase winner, Soggy Food Sucks, because being able to deliver crisp french fries is the kind of news Wall Street (and everyone, really) can rally around.

$3.5 Billion Invested in Food Delivery Startups This Year

Investors have a big appetite for food delivery companies this year. The Wall Street Journal reports on Pitchbook data revealing that $3.5 billion has been invested in food and grocery delivery startups so far in 2018.

If you follow The Spoon, then this news shouldn’t come as any real shock. We’ve been covering big money deals in this sector all year long. Here’s just a sampling:

And those are just pure play delivery services. We aren’t sure exactly how Pitchbook is defining a food delivery company, but there’s also been plenty of investment in services that boost delivery:

  • Ordermark, which provides software and hardware to streamline delivery orders to restaurants raised $3.1 million in March, followed by another $9.5 million in September.
  • Starship and Marble, two companies building delivery robots, raised $25 million and $10 million, respectively.
  • Though never confirmed, it was rumored that Softbank was looking to invest $750 million in data-driven pizza delivery startup Zume back in August.

These types of venture investments also don’t take into consideration the money existing delivery and grocery players are spending to bulk up. Uber Eats will cover 70 percent of the U.S. population by year’s end. Grubhub just bought Tapingo to capture the college food delivery market. Walmart is building out its own delivery service, Amazon has its in-home and in-trunk delivery service, and Kroger is experimenting with self-driving cars for delivery.

And all of the delivery-related investments and moves in this story are just for North America. That doesn’t even take into consideration Europe, where nearly half of the €6.5 billion (~$7.5 billion) invested in food tech since 2013 has gone to food delivery startups.

The WSJ article raises the issue of whether this frothy investment puts delivery in overhyped bubble territory. The paper likens all the excitement to that of the meal kit investment craze a few years back. Meal kits are still around, but they are moving into retail, and it’s probably best if you don’t look at Blue Apron’s stock price.

To be sure, valuations are sky-high for these companies: Uber Eats is valued at $20 billion, Instacart $7.6 billion, DoorDash $4 billion and Postmates at $1.2 billion. That’s a lotta billions.

But the counter-argument to the bubble talk is that there are a lot of hungry people in this country. Even more to the point, there are a lot of hungry busy/lazy people in this country who would love to have their lunch or dinner magically appear, ready-to-eat, multiple nights a week. As the CEO of Ordermark told me, “Convenience is not a trend.”

In other words, investors’ eyes may not be bigger than their stomachs in this case.

Uber Should Focus on Robots, not Drones

Uber is reportedly working to fast track food delivery by drone. Think: Burritos, burgers or boxes of baked beans zipping about overhead. Free of the congested city streets and sidewalks, these drones could get us our food in as quickly as five minutes, according to Uber CEO Dara Khosrowshahi.

That sounds great!

Or does it?

Upon reading the news about Uber’s amped up drone ambitions yesterday, my first thought was — why? Other than speed, drones seem to be a bad way to shrink the last mile. Even if Uber could clear all the regulatory hurdles (which haven’t even been created yet) drone delivery just seems… dangerous. Drones could fall or drop their packages on on people or property below. They can’t work that well in inclement weather. They are loud (but getting quieter). They need places to land. They could get attacked by owls (don’t laugh, it happened to mine!).

But Khosrowshahi isn’t dumb. Certainly these thoughts have occurred to him and his team. Uber could be pumping up the idea of drone delivery for a number of reasons:

  1. The company is looking to IPO next year, so having a shiny new drone program could help sweeten the story around its public offering.
  2. Amazon and Alphabet are working on their own drone package delivery programs, and it’s better to compete than concede for a company that is all about last mile logistics.
  3. The company really believes that drones are where the puck will be, to borrow a phrase, and legitimately wants to push the technology forward.

It’s probably a mix of all three and ultimately, drones will undoubtedly become part of the mix for any delivery company.

But while it’s looking so far into a yet-to-be-regulated, murky future, I kinda wish Uber would focus more on the near future for delivery — robots. I’m not talking about self-driving cars, research into which the company suspended after a deadly accident. I’m referring to the squat, autonomous vehicles like those from Marble, Starship and Kiwi that are rolling out on sidewalks in various urban and campus locations across the country.

Uber has undoubtedly looked at delivery robots, but it doesn’t appear to have launched any partnerships or initiatives around the technology. Which is kind of curious.

Unlike drones, if robots malfunction mid-trip, they won’t fall from the sky. There’s a chance they could bump into people or things, but they won’t be traveling as fast. Robots can also easily approach existing doors of any house or apartment building and can deliver more and heavier items.

True, robots will take up sidewalk space, and as more of them go into service, they will force us to re-think our relationship to our walkways. And that re-thinking is going to be guided by local governments, who are still figuring out the rules of the road. But the rules of the road will be much easier for cities to legislate than the rules of the sky because cities already have experience with pedestrian and vehicular traffic.

Rather than devoting too much time to drones, I’d love to see Uber do something like acquire a smaller robotics company like Kiwi. Kiwi actually has a few things going for it. First, it’s already got working robot delivery vehicles already scurrying around Berkeley, CA. It hasn’t raised that much money (just $2M according to Crunchbase), so it wouldn’t be that expensive. And if we stretch this thought experiment to its logical (logistical?) limits, there is some synergies between Uber and Kiwi as Kiwi uses bikes (well, trikes) to shuttle robots around and Uber owns Jump bicycles.

Delivery robots would give the company an autonomous fleet of vehicles that could make deliveries around the clock (eventually), and could even open the door for delivery of groceries and other types of packages beyond food.

One way or another, Uber is bringing you that burrito, whether it’s by land, by sea or by air.

Uber Accelerating Its Drone Food Delivery Ambitions

Uber really wants to deliver your burger (or burrito, or whatever) by drone, and is accelerating its plans to make that happen. According to a story in The Wall Street Journal, Uber recently ran a job posting seeking a candidate who could get delivery drones up and running as early as next year, and commercially operational in numerous cities by 2021.

That job listing, titled “Flight Standards and Training,” has since been deleted, but it illustrates how serious Uber is about the food delivery space and its own ambitions within it.

The idea of drone delivery isn’t new, and Uber is among a number of companies including Alphabet (née Google) and Amazon looking to use drones for delivery. Amazon was recently issued a patent for in-flight recharging of drones, and even IBM has a patent for coffee delivery by drone based on your mood.

If successful, having its own fleet of drones could help push Uber’s food delivery business, Uber Eats, ahead of the pack in the fiercely competitive restaurant delivery sector. Uber Eats has been growing like a weed and is reportedly at a $6 billion sales run rate. But it faces competition from incumbents like GrubHub, which recently acquired Tapingo to snag college student customers, as well as upstarts like DoorDash, which has raised more than $780 million this year alone to expand its delivery operations (which probably will include drones).

Uber’s ambitions may run headlong into reality, however. Rules and regulations around drone deliveries still need to be worked out by the Federal Aviation Administration, as well as state and city governments. But as The Journal points out, Uber is eyeing a potential IPO next year that could value the company at $120 billion. Being early with drone deployment to boost its already successful Uber Eats division could help a positive narrative around its public offering.

And, of course, there is the question of whether people will want food delivered by drone, or towns will want fleets of drones constantly buzzing overhead.

Snack on This, Cargo Raises $22.5 Million

Cargo, the startup that helps rideshare drivers sell snacks and such inside their cars, announced today that it has raised a $22.5 million Series A round of funding led by Peter Thiel’s Founders Fund (h/t VentureBeat).

Founded in 2016, Cargo provides drivers with plastic containers that sit on top of a car’s center console and are filled with items like gum, lip balm, or even earbuds. Using the Cargo app, consumers can buy items during their ride, and the driver earns a commission on each purchase. Cargo says that it works with a total of 12,000 drivers who earn an added $130 a month on average.

Cargo and Uber entered into an exclusive global partnership earlier this year in a move to put more vending boxes in Uber’s fleet. That gave Cargo a nice shot in the arm, and this new money will be used to fuel even more expansion both domestically and internationally.

In addition to a nice value add for Uber drivers, more widespread adoption of Cargo gives Uber increased insight into the purchasing habits of its riders. Which snacks are most popular and where? When do people buy, how frequently, etc. On the surface, this data helps Cargo more precisely stock items by region.

But it also helps Uber, which is in the business of transporting things, whether it be people, or, in the case of Uber Eats, food. If you’re feeling peckish on the way home from work or a night out, maybe in addition to that Clif bar you just bought in the car, you can be prompted to order a Big Mac (through Uber Eat, obvs) to be delivered to the same place you’re being dropped off.

That’s probably a ways off, but it’s still an idea to snack on.

Bite Squad Brings Food Delivery and a New Economy to America’s Small Cities

Minneapolis is landing on more radars these days as a destination for all things food related. It has a food startup scene, food halls, and accelerator programs backed by major CPGs. And it’s got Bite Squad, a food delivery service that’s changing the economies of smaller U.S. cities at the same time it drops meals off at customers’ front doors.

The service works much like any other third-party food delivery operation. Users order and pay for food either online or via the Bite Squad app, with delivery fees based on the distance between customer and restaurant. Bite Squad functions a bit like Uber Eats in that users can see a detailed breakdown of where their order is in the preparation process: the five-step status checker lets a guess track their meals’ progress after placing an order, notifying them when an order is sent to the kitchen, when it’s being cooked and quality checked, and, finally, when it’s on the way.

Bite Squad may be based in Minneapolis, but it is in over 300 U.S. cities now, thanks to a recent expansion; they aim to be in 400-plus cities by the end of 2018. But unlike a lot of food-delivery services, Bite Squad focuses on Middle America’s big towns and small cities, rather than trying to grab a sliver of major hubs like NYC and LA. “[Delivery] is still a very new part of a Middle America city economy,” Bite Squad’s Chief Marketing Office, Craig Key, who adds that “the most exciting thing we’re doing is that we’re reinventing economies of these towns.”

They do this by tackling new cities neighborhood by neighborhood, sometimes also acquiring local food-delivery businesses that can give Bite Squad access to new audiences. That was the case with the company’s recent 100-city expansion, where they acquired 13 regional restaurant-delivery services across Florida, Minnesota, Texas, Mississippi, and a few other states. “We really build this business one neighborhood at a time,” says Key. “We optimize each zone, and we make sure we have the right number of drivers and restaurants [available]. We’re confident in our position because we’re not haphazardly going into markets.”

Part of that calculated growth includes Bite Squad’s approach to hiring drivers: almost all of them are W2 employees with a guaranteed hourly wage and access to things like workman’s comp and overtime pay. It may sound expensive to keep 5,000 drivers at employee status (not to mention the fleet of Prius cars Bite Squad company owns), but Key points out that other companies who hire drivers based on a gig-economy model have their share of frustrations, too: namely in the form of court cases and lawsuits around worker classification and treatment. Plus, Bite Squad claims the employee model is a profitable business. “We built a business based on employee drivers,” says Key. “As long as we’re keeping those drivers busy we can be profitable because our profits can be hourly, not based on a flat delivery fee.”

Bite Squad is able to do things like prioritize employees over contractors because so far the company has managed to keep its business going from its own profits, rather than having to raise funds and answer to investors. Since Bite Squad is private, Key didn’t disclose any actual figures to me. But he did mention the food-delivery service sector is growing at a rate of roughly 30 to 50 percent per year, and that Bite Squad’s growth rate is faster.

Even so, the company has no plans in the immediate future to expand into the major metropolises. Rather, Bite Squad sees years’ worth of opportunity still waiting to be grabbed up in small cities and big towns around the country. “We’re very bullish on the upside of Middle America’s appetite for restaurant delivery,” says Key. “By our own math, we’ve got hundreds of more markets we’re looking at and evaluating. Just to fulfill our own pipeline of markets will take years.”

Wendy’s Just Aggressively Expanded Delivery in North America

This week Wendy’s announced it has expanded third-party delivery options in North America in what’s clearly a move to better compete with McDonald’s and other fast-food restaurants as consumers demand more and more delivery.

Among other announcements during the company’s latest earnings call, Wendy’s CEO Todd A. Penegor noted that roughly 40 percent of the company’s restaurants in the U.S. and Canada now offer delivery, up from 25 percent at the end of the first quarter.

“The consumer has an appetite for convenience and we have seen this through our delivery economics,” he said, adding that check sizes have been “1.5 to 2 times higher on delivery orders.”

On the call, Wendy’s also reiterated its commitment to technology, including its new Digital Experience organization, which works on leadership changes, agile software development, and, of course, further developing the company’s mobile strategy. Current CIO David Trimm will retire in early 2019, which Wendy’s says will provide a chance to “refocus [their] leadership structure” to leverage more tech.

Wendy’s kickstarted delivery services at the end of 2017 by partnering with DoorDash in the U.S. and SkipTheDishes in Canada. On the aforementioned post-quarter earnings call, Wendy’s also reported that delivery is the number one area of business in terms of customer satisfaction. That’s huge, considering fast food isn’t inherently designed (cooked?) for travel, and a lot of fast food chains still struggle to keep food high-quality.

Take McDonald’s. The daddy of all fast food chains expanded its Uber Eats-powered delivery operations to about 5,000 stores in the U.S. in less than two years. They may be the most aggressive in terms of expansion right now (Wendy’s currently operates about 2,500 locations with delivery), but food quality remains an issue, most notably with soggy fries.

Not to be forgotten, Burger King is also ramping up efforts in both digital and delivery. While BK has experimented with delivery in the past, the company has been slower than its competitors to adopt it on a large scale. Even so, there are some who approve of BK’s slower ramp up, noting that a steady speed can “show what some of the potential pitfalls are.” Said pitfalls include losing some control of one’s brand to third-party services, as well as the food quality issue.

Delivery still represents only about 3 percent of all restaurant orders, fast food or otherwise. Most days it seems like more, given all the news we read about the market. But it’s still hard to tell if this trend towards getting fast food delivered to your home is a fad or an actual long-term strategy. For now, the question seems more about who can strike the best balance of timing, quality, and strategy to, erm, deliver what customers want most.

Uber Eats Gobbles Up POS Integration With orderTalk Acquisition

Ever gone neck and neck with another car down the road for several miles only to suddenly have them speed up and leave you in a cloud of freeway dust? That’s probably how a lot of third-party delivery services are starting to feel about Uber Eats right now.

Grubhub remains the bigger company in terms of market share, but Uber Eats is the fastest-growing service, and according to recent numbers has the lead in 15 major U.S. cities, including Atlanta, Austin, and Seattle.

And that number will most likely increase, as Uber Eats just announced its acquisition of restaurant tech company orderTalk, who’s online ordering platform is known for its direct and easy integration with existing and custom custom POS systems for restaurants. Terms of the deal were not disclosed.

Uber Eats head of biz dev, Liz Meyerdirk, told Skift the acquisition is part of a two-fold strategy: to reduce the amount of errors, which can arise with manually entering orders, and to streamline workflow, so that orders via UberEats go direct to the kitchen, sans middleman.

For now, Uber Eats will “retain orderTalk’s point of sale technology as well as several engineers,” according to Meyerdirk. They’ll wind down other orderTalk features over the coming year, including the ability for restaurants to accept orders through the orderTalk platform. (Presumably, they’ll have to switch to Uber Eats.)

The acquisition is none too soon, considering Grubhub already integrates with leading POS systems and has exclusive deals with several big-name chains, including its recently announced partnership with Jack in the Box.

Not to be outpaced, Uber Eats has its own deals with quick-service heavyweights, including its lucrative and exclusive partnership with McDonald’s. They also just inked a deal a deal with Popeye’s to deliver in Florida, New York, Washington D.C., and Chicago.

If you happen to be a Miami-area resident, the Uber Eats-Popeye’s deal means you can get free chicken, biscuits, and red beans today in celebration. Head over to the Uber Eats website or app to get the goods.

For the rest of you, more Uber Eats deals are probably speeding your way in the very near future.

Uber Buys Jump. Will Its E-Bikes Power More Food Delivery?

Uber announced today that it has acquired Jump, which provides dockless, electric bike sharing services. While much of the talk surrounding the deal has been about adding a new mode of transport for people trying to get around town, it seems like this move could also be a vertically integrated shot in the arm for the company’s growing Uber Eats platform.

Food delivery has been wildly successful for Uber. The service was available in 200 cities around the world last year, achieving profitability in 45 of those markets. Uber is expanding to another 100 cities around the world over the next year.

Adding Jump to the Eats arsenal would make sense in densely populated cities like San Francisco (where Jump already is) and NY, where traffic can slow car-driven deliveries down. Using an e-bike would allow Uber Eats drivers to bypass congestion for faster deliveries. Since Jump’s bikes have electric assist, those making deliveries could do so without breaking (as much of) a sweat.

A direct Jump/Eats relationship would also give Uber more integration throughout its food delivery stack. Uber Eats already allows delivery drivers to use their own bicycles for delivery — why not give them the option to use the Jump bike instead (for a small fee, of course)? As noted, an e-bike could allow drivers to make more deliveries for less “work” to ideally make more money, without the up-front cost of buying what is an expensive mode of transportation.

Uber has already shown its interest in owning more of its food delivery biz. Earlier this year it acquired David Chang’s Ando, a virtual delivery-only restaurant. So it’s not hard to imaging Uber pushing consumers to order from its own virtual restaurant and have that meal delivered on an Uber e-bike.

Having its own fleet of electric bikes in big cities could also help Uber fend off competition from GrubHub and DoorDash, which recently raised $535 million for its own restaurant delivery services. And such a move is not without precedent. Meituan, a Chinese food delivery company, recently purchased the Shanghai bike-sharing startup Mobike.

But potential Jump/Uber integration would also presumably be a win for consumers and restaurants. Getting food delivered faster means less chance of a lukewarm meal arriving at your door. Obviously hotter food is more enjoyable, and it also helps protects a restaurant’s brand from a bad eating experience.

We’ll see if Uber “jumps” (ed. note: sorry) at these opportunities, but this acquisition looks like a smart play, and I wouldn’t be surprised to see others following suit.

Ontray Provides Online Ordering and Delivery for Smaller Restaurants

A recent CNN Money headline read “Why Uber Eats and GrubHub partnerships are risky for restaurants.” The post lays out reasons for caution, including squeezing already tight restaurant margins with third-party delivery fees and increased chances of poor customer experiences with your brand (think: late delivery of lukewarm food).

The siren song of these alluring delivery services is enticing, especially considering the large audiences companies like Uber Eats and Grubhub have. In the fourth quarter of last year, GrubHub alone had 14.5 million “active diners” (a 77 percent year-over-year increase). And in the cutthroat world of the restaurant biz, you have to go where the customers are.

Ontray, a small Philadelphia-based startup, doesn’t want eateries to abandon services like GrubHub and Uber Eats. But it does return some of the power (and the purse) back to individual restaurants.

It does this with a SaaS-based tool that makes it easy for smaller restaurants to create their own websites, complete with online ordering and delivery capabilities. There’s no upfront cost for the restaurant; Ontray only charges a 5 percent commission on sales, which the restaurant can assume or charge to its customers.

Armed with their own site, restaurants can better claim their own SEO, and they aren’t driving repeat customers to an aggregator like GrubHub. If forced to go to a service like Uber Eats, a customer could be distracted by a different restaurant listed or even nudged into a restaurant owned by Uber.

Ontray Founder and CEO, Tyler Wiest, considers his company complimentary to delivery services. He thinks restaurants should take advantage of the big audiences GrubHub and Uber Eats provide, but those services should serve as springboards. Wiest suggests that when restaurants fulfill those outside delivery orders, they should include a coupon offering 10 percent off the next meal if it’s ordered directly through the restaurant’s site. In other words, a third party like GrubHub should become more of a marketing arm for a restaurant rather than an ongoing driver of business.

To broaden its reach, Ontray also partners with smaller, regional delivery services like Chow Caddie just outside of LA, and Catskills Delivery outside of NYC. These local services can do the leg work of reaching out and bringing neighborhood restaurants onto the Ontray platform.

While this moves Ontray in the right direction, Wiest’s company still faces competition from a number of bigger players like Olo, LevelUp and MonkeyMedia–all of whom offer tools to get restaurants online. Additionally, while Ontray-created sites are mobile friendly, they don’t yet offer restaurants the ability to create their own mobile apps.

While it’s great that Ontray wants to even the playing field for the little guy, targeting small businesses makes it more difficult for the startup to scale. The company isn’t venture backed as of yet, and Wiest, the only employee, has had to manage both the technical and business development side of his startup, which can put a strain on both.

Wiest remains undaunted, however. In an email he told me, “Ontray is primarily using online ordering to gain a foothold in both the restaurant and delivery industries. Using this foothold allows us to build an ecosystem facilitating interactions between not only restaurant and delivery providers but also marketing agencies, reservation application, ticket management / POS systems etc..” He sees Ontray becoming the glue that brings together any system the restaurant wants to use to facilitate order and delivery.

Until then, however, restaurants looking to get online can give Ontray a try. Since there’s no upfront cost, that relationship probably isn’t terribly risky.