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Daily news and analysis about the food tech revolution

Uber Eats

Chipotle Partners with Uber Eats to Reach More Diners during COVID-19

Quarantined burrito lovers, take note. Chipotle announced today it has added Uber Eats to its list of third-party delivery partners. The chain also announced that it will waive delivery fees on orders of $10 or more placed through the Uber Eats app for the rest of March.

Chipotle is taking extra precautions to make sure anyone who orders through Uber Eats has the option to for “no-contact” deliveries. Chipotle food will have a tamper-evident packaging seal to prove that food has been untouched on its route to the customer.

This is the first time Chipotle and Uber Eats have teamed up for delivery, and the move is no doubt in response to the COVID-19 pandemic sweeping across the globe and keeping people home. Chipotle chain has had a partnership with DoorDash since 2018 and is also available through Postmates.

As resident restaurant tech expert Jenn Marston previously noted, delivery remains a major driver for digital growth for Chipotle. The company has a hybrid delivery strategy which uses a combo of in-house and third-party functionality to build out a unique delivery operation for each individual storefront. It’s also experimenting with Chipotlanes, which are drive-thru lanes that place special emphasis on mobile ordering.

Chipotle’s digital business surpassed $1 billion in sales in 2019 and digital orders made up one-fifth of the company’s sales in Q4 of last year. With the coronavirus outbreak spurring massive restaurant closures, it’s likely that Chipotle — and other fast-casual chains — will double down on its digital and delivery capabilities. With Uber Eats on its side, that could mean more burritos for all of us social distancing right now.

Uber Eats Waives Delivery Fees for Independent Restaurants

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

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

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

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

DoorDash Makes Moves to Help Workers and Restaurants Impacted by Coronavirus

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Postmates Launches Funds for Drivers and Restaurant Partners Affected by COVID-19

Postmates is launching two new programs this week meant to assist the delivery service’s drivers and restaurant partners impacted by COVID-19, according to an announcement from the company.

The company has set up the Postmates Relief Fund, which will cover the cost of medical check ups for its driers and couriers regardless of whether they have been diagnosed or quarantined. As of right now, drivers who have made at least one delivery in the last two weeks in any of the following states will be eligible for a credit from the fund: Wash., Ore., Calif., Nev., Utah, Colo., Ariz., Texas, Neb., Wis., Ill., Ind., Fla., Ga., Tenn., N.C., D.C., Penn., N.Y., Maine, Mass., and N.J.  

In the same announcement, Postmates also noted it is launching a pilot program that will temporarily waive commission fees for new merchant partners operating small restaurants. The idea behind the move is to give these smaller businesses a boost at a time when foot traffic to restaurants is down due to COVID-19. According to the announcement, “This Small Business Relief Pilot will waive all commission fees for businesses that are not currently delivering on the platform and operate in the City of San Francisco, but want to expand into on-demand delivery to help drive revenue as on-premise dining is impacted.”

Postmates has said it will “potentially” take this program to other cities in the U.S. as well.

Both of these efforts come just days after we learned Postmates as well as Uber, DoorDash, and other gig economy companies are in talks to see how they can band together to set up a potential fund to assist drivers/couriers infected by or quarantined with the COVID-19 virus. 

Some of these services, including Postmates, have also taken measures like implementing contactless delivery features to limit face-to-face human interactions. DoorDash joined that list this week, saying on Monday it is testing features for contactless delivery that will be launched soon. Uber, meanwhile, said it will compensate drivers — for both rideshare and Eats services — who can’t work for 14 days because of coronavirus diagnosis or quarantine.

With cases of COVID-19 on the rise in the U.S. and more employees now being mandated to work from home, we’re likely to see further demand for food delivery in the coming weeks. Stay tuned . . . 

Zomato Buys Uber Eats’ India Business for $206M

Uber Eats has sold its India business to food delivery giant Zomato for $206 million, according to an AsiaTechDaily article. The deal was first announced in January, though at the time financial terms were not disclosed. This official price tag on the deal comes from Uber’s latest filing with the US Securities and Exchange Commission.

The deal gives Uber a 9.99 percent stake in Zomato. It also dictates that Uber will shutter its Eats business operations in the Indian market and that its Eats restaurant customers there will become part of the Zomato ecosystem.

From AsiaTechDaily:

Uber said in the filing that the estimated fair value of the consideration received is $206 million, which includes the investment valued at $171 million and the $35 million of reimbursement of goods and services tax receivable from Zomato. 

Uber’s exit from the Indian market leaves just two companies competing for food delivery dominance: Zomato and its key rival, Naspers-backed Swiggy, which is India’s number one food delivery service according to estimates. Both companies process roughly half a million more orders daily than Eats had been doing in India. 

The Indian market won’t stay a duopoly for long, though. Just days ago, Amazon announced it plans to enter the Indian food delivery market with a service that would be offered as part of either its Prime Now or Amazon Fresh platform. Said service could launch as soon as this month. While the company’s entry into the market wouldn’t be a complete breeze, given both Swiggy and Zomato’s popularity, if anyone has the deep pockets and operational prowess to crush that duopoly, it’s Amazon.

Amazon aside, the Zomato-Uber Eats deal is also another step in the food delivery industry’s move towards further consolidation as these cash-burning services back out of loss-making markets. India isn’t the first market where Uber Eats has shuttered its services. In 2019, the company got out of South Korea, where Woowa Bros.’ Baedal Minjok has a 75 percent marketshare. Also in 2019, Postmates shuttered its Mexico City office.

Elsewhere, UK-based Just Eat merged with Takeaway.com to form one of the largest food delivery services in the world, and Woowa Bros. itself was bought by Delivery Hero at the end of December. These, along with the Uber Eats-Zomato deal are certainly not the last we’ll hear of mergers, acquisitions, and closings, as consolidation in the food delivery space continues. 

Grubhub’s Subscription Program Is a Bid to Boost Customer Loyalty

Grubhub today announced the launch of Grubhub+, the food delivery service’s answer to a subscription service that offers members more rewards and free delivery on many orders, according to a company press release. 

A $9.99/month membership to Grubhub+ includes free unlimited delivery from restaurants participating in the new subscription service. (Grubhub hasn’t named specific ones yet.) A subscription also gets you unlimited 10 percent cashback deals, priority assistance when dealing with customer service, and dibs on exclusive perks and access to local events.

Grubhub+ is the company’s latest effort to win customers over with more rewards. Last year, the company launched the in-app feature Perks, which offers users more ways to earn loyalty points from restaurants via deals only available in the Grubhub app.     

Right now, anyone can sign up for a free 14-day trial of Grubhub+. And in what’s also a bid for customer loyalty — something of an elusive concept for third-party food delivery right now — Grubhub is also offering an extended 30-day trial to “diners participating in any other food delivery subscription program.” DoorDash, Uber Eats, and Postmates all offer subscription services. DoorDash even partnered with Chase bank recently to give certain cardholders subscriptions to the service, giving it access to a potentially even large pool of subscribers. 

There is no guarantee any of this will ensure customer loyalty for any third-party delivery service. Customers tend to chase deals, hopping from app to app in search of promotions, giveaways, and discount items. On that point, Grubhub isn’t slacking, as it grew its network of restaurants to 300,000 in the fourth quarter of 2019.

Some of those additions were controversial, though. Earlier this month, the company received widespread criticism for its practice of adding restaurants to its platform that have no formal agreement with the service. (DoorDash and Postmates do the same thing.) And that’s only one controversy of many the service has been at the center of in the last 12 months. So Grubhub might be doing all it can to have the most restaurants in the network, but it’s pissing owners and customers off in the process, which won’t exactly build loyalty.

But, as I said above, customers tend to chase deals, and if Grubhub can offer a better subscription package than its competitors, it could win more loyalty despite its many current controversies, present and future.

Week in Restaurants: Ghost Kitchens Might Be Hurting Small Businesses

Food delivery has a dark side. That we knew, but it does seem to be getting more airtime lately, with legislators and restaurants alike pushing back against some (okay, most) of the practices companies like DoorDash, Grubhub, and Uber Eats employ. We saw more of that this week when a San Francisco restaurant owner took Grubhub to task and urged others to join her. Judging from Grubhub’s latest earnings call, though, the service isn’t budging on certain practices.

Read on for more on those as well as other noteworthy restaurant news from around the web this week.

Ghost Kitchens Get an Oversight Hearing in NYC

Ghost kitchens are all the rage, but not everyone is thrilled with them. On Thursday, New York City council members held an oversight hearing to discuss whether ghost kitchens are a friend or hindrance to local business, and if they need to be regulated. “Are you a threat to our mom-and-pop restaurants, or should you be embraced as a partner that’s going to help them continue to flourish and grow?” councilmember Mark Gjonaj asked ghost kitchen operators at the hearing. (Gjonaj has also been vocal when it comes to third-party delivery in NYC.)

Kitchen United CEO Jim Collins was present, as was Zuul Kitchens cofounder Corey Mancione. While regulatory measures were not discussed, the event definitely puts a spotlight on the more controversial aspects of ghost kitchens. The main debate at last night’s hearing was whether ghost kitchens hurt small, independent restaurants by lessening overhead costs for bigger chains, who have the deep pockets to more easily embrace off-premises ordering.

Image via Unsplash.

TripAdvisor Unveils a Review Aggregator for Restaurant Operators

TripAdvisor launched a new tool on Wednesday that aggregates restaurant reviews from multiple websites so that owners and operators can view all of them from a single dashboard. Dubbed Review Hub, the subscription-based feature gathers reviews from Facebook, Google, Yelp, and “other major review sites” into one place. The aggregated view promises restaurant owners an easier, faster way to spot trends in feedback, see what’s working and what isn’t, and respond to customers more consistently. Subscriptions are available on both a monthly and annual basis.

Planet Hollywood Founder Launches a Virtual Restaurant Network

Robert Earl, known as the founder of Planet Hollywood, has launched a virtual restaurant concept called Wing Squad, which is available exclusively through third-party delivery platforms Grubhub, Uber Eats, DoorDash, and Postmates. The online menu is fairly streamlined, offering up just wings, sides, and a few desert options, all of which is cooked in ghost kitchens. The restaurant is currently available in 16 cities, including Los Angeles, San Diego, Detroit, and Las Vegas. Earl, whose Earl Enterprises owns chains like Buca di Beppo and Earl of Sandwich, said in a statement that Wing Squad is part of his Virtual Dining Concepts network. Other online-only restaurants are coming soon.

Grubhub Added 150,000 Non-Partnered Restaurants

Grubhub beat Wall Street estimates for Q4 2019 in what was a drastic change from the company’s dismal third-quarter results. Part of the third-party delivery service’s efforts in Q4 included doubling its restaurant inventory by adding 150,000 non-partnered restaurants — that is, restaurants that do not have contracts with the service and have not given permission to Grubhub to use their menus online. The controversial tactic is also used by Postmates and DoorDash. While Grubhub defends the strategy, saying it is meant to reverse the slowdown in daily orders, more and more restaurant owners are speaking out against the practice, turning the issue into the latest battle between restaurants and delivery services. Mark Gjonaj, over to you.  


Will the Restaurants Themselves Be Third-Party Delivery’s Biggest Opponent?

A while back, I wrote that third-party delivery services like DoorDash and Grubhub are engulfed in a massive fight now against all manner of opponents, from government regulators to investors worried about profitability to the force that is social media. But in the wake of fresh controversy, these delivery companies’ strongest opponents might actually be the restaurants themselves. 

Restaurants’ need to push back against delivery services was (once again) brought to light recently when San Francisco restaurant owner Pim Techamuanvivit, who owns Michelin-star restaurant Kin Khao, left the following tweet:

Techamuanvivit went on to explain how she discovered that Kin Khao was listed on Grubhub and its subsidiary brand, Seamless, despite the fact that the restaurant has never offered delivery or even takeout. After all, it is a Michelin-star joint.

An excellent article from Wired goes into the full details on how Kin Khao got mixed up with a virtual brand that operates out of one of Reef Technology’s ghost kitchens. (It was a technical error.) But the bigger point, as Wired underscores, is that Grubhub had listed Techamuanvivit’s restaurant in the first place, without her knowledge or consent, and that doing so is actually a common practice Grubhub started some months ago.

Essentially, Grubhub identifies non-partnered restaurants — that is, restaurants with which it doesn’t have a contract — that are popular in a city, creates a page using the establishment’s menu and basic information (pulled from public sources), and has orders sent directly to Grubhub. Grubhub then figures out how to actually get the order, which usually involves sending a driver to retrieve a pickup order. However, in the case of a high-end restaurant like Kin Khao, which only offers dine-in service, that tactic clearly doesn’t work.

Many restaurants have voiced concerns over this practice. Steven Sorensen, general manager and partner at The Farmhouse at Jessup Farm in Colorado, had a similar experience to Techamuanvivit’s, even though his restaurant had “routinely” declined to partner with Grubhub. “Our food is not designed for that app,” he told the Coloradoan. “It’s designed to be enjoyed immediately in the restaurant.” 

Another restaurant owner, this one from Ohio and going by the handle @ThaibyTY, tweeted that Grubhub had listed incorrect information about their business and incorrect menu items and prices:

Other services like Postmates and DoorDash follow a similar practice. The argument is that listing non-partnered restaurants widens third-party services base of restaurants and and is a way to drive more delivery orders to local restaurants.

But this practice of listing restaurants without their consent is just one of many griefs with delivery businesses are getting louder about.

Grubhub has for some time now also been dealing with a controversy around charging restaurants “bogus” phone order fees. The service announced a new phone-order system in January (which NYC regulators immediately labeled “insufficient”), but according to the NY Post, the service has yet to refund the majority of its restaurant partners on those erroneous fees.

That service, along with Uber Eats, was the center of an oversight hearing in Manhattan last year that called into question the commission fees delivery services extract from restaurants, usually 20 to 30 percent of each transaction. Caps have also been proposed for these commission fees.

DoorDash isn’t off the hook, either, given the controversy last year around how the service tips its workers, a point that’s the center of a lawsuit filed by DC Attorney General Karl Racine.

I wrote back in December that, for at least the first half of 2020, we should expect the already messy food delivery space to get even messier “get messier, raise more questions, and incite more regulatory battles as it progresses towards normalization.”

But maybe it shouldn’t normalize, at least not in its current form. Maybe this latest controversy should instead encourage more restaurants to vocalize their concerns around the unregulated, unsustainable beast third-party delivery is becoming, and in some cases, take further action in order to become a legitimate threat. Techamuanvivit, for her part, is promising legal action against Grubhub and has encouraged other restaurants to do the same.

Litigation is tricky, though. In-N-Out Burger famously tried to sue DoorDash in 2015 but the case was dismissed two months later in a confidential settlement. What the industry needs to see are examples of such lawsuits going to trial and their outcomes forcing changes in how business gets done between restaurants and third-party services. There are no guarantees that will happen.

There are arguments out there that if restaurants don’t like the way these third-party services operate, they shouldn’t use them. That angle might have held water two years ago. Now, off-premises orders are expected to drive most restaurant sales over the next decade, which means delivery is practically mandatory for many restaurant types. Unless you’re a restaurant like Kin Khao, where delivery doesn’t make sense for your brand, most restaurants have to contend with marketing costs, paying drivers, and managing the technical logistics of on-demand ordering. Often the cheapest way to do that is to use third-party services, which may handle the heavy lifting of delivery operations for the restaurants but which are also largely unregulated and as of now face little accountability for their business practices.

Whether Techamuanvivit’s Twitter takedown of Grubhub and possible forthcoming lawsuit can inspire others in more precarious positions (those restaurants who feel they need the partnerships with third-party services), remains a question.

Meanwhile, talk of consolidation among third parties continues, and worry from investors over profitably continues to threaten the model. Coupled with growing concern and louder voices from the restaurants themselves, it seems more likely that something big is going to give very soon. And it should. Otherwise, everyone loses in the long term.

Uber Eats Loses Exclusive Contract With McDonald’s in the UK

Uber Eats took another competitive hit this week when it lost its exclusive rights to deliver McDonald’s orders in the UK. Rival delivery service Just Eat announced on Tuesday it had struck a deal to become the QSR chain’s second delivery partner in Britain, according to a report from CNN Business.

Joseph Barnet-Lamb, an analyst at Credit Suisse, told CNN that orders from McDonald’s account for about half of the 30 million deliveries Uber Eats does in the UK each year. “This is all part of Just Eat taking back control of the competitive landscape,” he said. 

Just Eat is already a leader in the UK food delivery space, and its planned merger with another European food delivery heavyweight, Takeaway.com, could give the company even more competitive muscle that players like Uber Eats and Deliveroo will have to fight. (British antitrust watchdog the CMA certainly thinks so, as the deal with Takeaway.com is currently under investigation, though it’s still expected to go through.)

This is the second time Uber Eats has lost an exclusivity contract with the Golden Arches. In July 2019, McDonald’s added DoorDash as a second delivery partner in the U.S., then later added Grubhub, too.

Elsewhere, Uber shut down its Eats service in South Korea, laid off staff, and, this year, just sold its India business to rival service Zomato.

None of this is particularly surprising. Uber is under pressure from investors to prove it can be more than just a cash-burning business — in other words, profitable. Part of that process includes shutting services down in markets where they don’t perform well or fall behind the local competition.  

That doesn’t mean Eats is leaving the UK anytime soon. However, Just Eats processed over 123 million orders in the UK in 2018. If its deal with Takeaway.com goes through, it will create one of the largest food delivery services in the world, and a competitive threat that goes far beyond the question of who’s delivering Big Macs.

Deliveroo Introduces Dynamic Pricing for Delivery Fees — Much to the Dismay of Monthly Subscribers

Deliveroo will change its delivery fee model to be more dynamic, according to an article on Restaurant Dive. Beginning in February, the UK-based food delivery service will introduce a pricing model where delivery fees are based on a customer’s distance to the restaurant. A Deliveroo spokesperson said this sliding-scale model will make delivery fees lower for the majority of Deliveroo customers.

There is, however, a catch. Along with this new pricing model, Deliveroo also said it would charge a 49p (~0.64 USD) service fee for every customer, including those signed up to Deliveroo Plus, the company’s subscription service. 

Not surprisingly, Deliveroo Plus subscribers are none too pleased with the change. 

These users already pay a little over $15 (USD) per month to access the subscription service, which offers free unlimited delivery to its members. But most people willing to pay for a subscription are probably ordering restaurant delivery multiple times per month, and in some cases per week. In other words, that new mandatory fee, though less than $1, can add up pretty quickly, especially when it’s piled on top of the subscription fee itself.

In fact, the announced changes to the pricing structure have many of those who signed up for the subscription service up in arms and ready to boycott Deliveroo, as a recent article in The Daily Mail highlighted. “Signed up to plus on earlier this month. Cancelled it just now because of their new jazz fees,” one person tweeted. Another wrote via Twitter, “Your decision to put a minimum order on Deliveroo plus is appalling. As a single man, recently widowed, I liked the fact I didn’t have to over order. Will probably go elsewhere now and cancel my subscription.”

Subscription models aside, however, the move towards a more dynamic pay structure could benefit other Deliveroo users as well as drivers, to whom the company says it is offering “a different fee for every order and a fairer system, paying more for orders that take [drivers] further.”

Newsletter: Consolidation Is Imminent for Food Delivery, Plus Customize is Coming to NYC

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If 2019 was the year restaurant food delivery companies went mainstream, 2020 is shaping up to be the year mergers and acquisitions whittle the competition among these third-party services down until just a couple companies emerge victorious.

Case in point: this week, Uber announced it is selling its Eats business in India to Zomato, a local rival that processes at least half a million more orders per day in that country than Eats does. Uber’s exit from the Indian market leaves just two major players: Zomato (which Uber will have a small stake in) and Swiggy, who also has access to deep pockets thanks to backing from investment firm Naspers.

And that news is just the latest in a series of announcements that all suggest acquisitions and mergers are the fuel pushing further consolidation worldwide in the crowded food delivery space. The ongoing bidding war over UK-based service Just Eat looks to finally be at an end, with Takeaway.com, who originally planned to acquire the company, coming out as the winner. The combined entity of Just Eat and Takeaway.com would form one of the largest food delivery companies in the world. In the States, Postmates has reportedly been exploring a sale instead of its planned IPO (which still hasn’t happened). A Wall Street Journal report from earlier this month said Grubhub had hired financial advisors to consider “strategic options including a possible sale” — though Grubhub denies the claim.

Uber’s motivation in the Zomato deal is in part all about cutting back on loss-making operations as the cash-burning business comes under increasing pressure to prove profitability over the next year. On that score, the company isn’t alone. Postmates shuttered its Mexico City operations in December. Deliveroo closed up shop in Germany last year. In 2018, Delivery Hero sold its German operations to Takeaway.com. And Uber itself ended its Eats business in South Korea last year.

Consider all that activity the tip of the proverbial iceberg. Most delivery companies are currently in the same boat as Uber, where investors are applying pressure to show the food delivery model can in fact be profitable and not just burn through money. So it’s safe to say that many services will continue shutting down or selling loss-heavy operations around the globe over the next several months and opening the door to further consolidation.  

At-home Indoor Farming Is Suddenly the New Black

There’s a new trend afoot in the connected kitchen: vertical farms built specifically for the home and meant to be used by your average consumer. 

Ever since CES, when major appliance-makers like LG and GE showed off flashy vertical farming concepts for the consumer kitchen of the future, here at The Spoon we’ve gotten a seemingly endless series of pitches and news announcements about this indoor-farm-to-table concept. The idea is simple: make an indoor farm that ranges anywhere between a flowerpot and a bookshelf in size, outfit it with accompanying technology that automates much of the actual work around growing the plants, and sell the product to consumers for, in most cases, under $1,000.

In the last several weeks alone, Rise Gardens, the Planty Cube, Miele, and many others have shown off products that hit these marks. But while there’s a lot of excitement (bordering on hype) around growing salad greens in your own kitchen, the still-nascent market hasn’t yet hit the point where the questions start to sprout up. Are these farms really as easy to use and automated as companies say? Can they actually save people money? Can individuals with a terrible track record when it comes to gardening (me) grow something that actually tastes good?

The next several months should provide some answers to these questions. 

Customize Is Almost Here!

That’s a wrap for this week. But before I go, here’s a quick reminder that we’re gearing up for Customize, our first NYC event. Personalization is changing everything from restaurants to grocery stores to our own kitchens, so join the Spoon team and our amazing group of speakers on February 27th! Just use the special Spoon subscriber discount code THESPOON15 for a 15% discount off of tickets. 

Keep growing,

Jenn