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Daily news and analysis about the food tech revolution

Waitr

Third-Party Delivery Service Waitr Buys Delivery Dudes for $23M

Third-party delivery service Waitr announced today it has entered into an agreement to buy Delray Beach, Florida-based company Delivery Dudes for $23 million. The stock-and-cash deal is expected to close before the end of next week.

Delivery Dudes’ digital ordering properties and phone number will remain operational. The company said the acquisition would help it to improve service for customers, which is available around the South Florida area.

What the deal brings for Waitr is a little less clear. Waitr, which operates in small- to medium-sized U.S. cities, is one of the only third-party delivery services that has so far achieved profitability. However, it holds just 1 percent of the market share for third-party delivery in the U.S., according to recent data from Second Measure. By comparison, DoorDash holds 56 percent, Uber Eats holds 20 percent, and Grubhub has 17 percent.

Delivery Dude’s service radius is unlikely to change those numbers much, since the company only operates in a small region within the U.S.

Potentially more advantageous for Waitr is its move in recent months to add more service types to its business. In some markets, Waitr now delivers alcoholic beverages directly from restaurants. Even more recently, the company struck a deal with a payment processing company called Flow Payments to create “a compliant marketplace, delivery, and payment solution” for cannabis dispensaries. 

Other third-party delivery services have also diversified their business models over the last year, with both DoorDash and Uber Eats offering grocery and DoorDash running its own “ghost convenience stores.” We’ve yet to see any of the major players peddling cannabis to customers doorsteps, though.

Whether Waitr will be successful at this remains unclear. The service operates largely in the South and Southeastern U.S., where cannabis and/or cannabis delivery is illegal in most states. There is currently no timeline for Waitr’s service in this particular vertical.

As far as its acquisition of Delivery Dudes goes, Waitr will be able to expand into new markets through it. Again, it would be a relatively small expansion, given that Delivery Dudes only serves part of Florida. But these may also be new areas in which Waitr can try out its diversified services, potentially building more profitability for the company in the future.

Delivery Service Waitr Is Supposedly Rebounding During the Pandemic

In the midst of a pandemic, it seems beleaguered third-party delivery service Waitr is seeing some uptick in demand for its service. After a slump in March, the Louisiana-based company says it has seen an increase in orders as more people stay at home under shelter-in-place orders, according to The Advocate.

It’s been a rough several months for the company.

Last July, the company became the center of protests when it changed its commission fee structure for restaurants to a “performance-based structure” that was largely seen as a move that punished smaller restaurants with lower sales volumes. The service ignited another controversy earlier this year when it shifted its model to classify drivers as contractors, rather than the W-2 employees they had been previously. 

In between those events, the company has done three rounds of layoffs, was in danger of getting delisted from the Nasdaq, and according to one report only had enough cash to run through March of 2020.

All that, of course, was pre-pandemic. Now that delivery is one of the only lifeline’s restaurants have, Waitr has seen demand for its service go up from both customers and restaurants. CEO Carl Grimstad said in a statement this week that “driver supply is at an all-time high and new restaurants are signing up for our services rapidly.” The company has also said it has seen an increase in driver applications.

Like other third-party delivery services, Waitr hasn’t adjusted commission fees for restaurants during this time, though the service said it is “working with restaurant partners to offer free delivery and marketing programs.”

A growing number of governments, advocacy groups, and restaurants themselves argue that the best way to help the restaurant industry right now is to slash commission fees for restaurants, who often pay fees of 30 percent or higher for each transaction. Waitr has not yet made any mention of either cutting down or waiving those fees.

The company’s real test will come as states slowly begin to reopen businesses and customers are once again seated in dining rooms.

Week in Restaurants: Domino’s Might Win Its Fight Against Third-party Delivery

Greetings from the far reaches of Newark Liberty International Airport. I’m off to Madrid to check out the the Hospitality 4.0 Congress for a few days. You should be finalizing your travel plans as well — to NYC, specifically, where you can join us next week for The Spoon’s daylong Customize event. We’ll be discussing food personalization and what that trend means for your diet, your kitchen, and your restaurant orders. Don’t sleep on this one. Grab one of the few remaining tickets here.

In the meantime, here are a few more restaurant-related stories from around the web this week.

Domino’s Stance Against Third-Party Delivery Is Paying Off

Who can possibly stand up to third-party delivery’s mission to dominate the restaurant industry? Domino’s apparently.

The pizza chain is at this point as famous for its in-house delivery policy as it is for its pies, and on its Q4 2019 earnings call this week, the Ann Arbor-based company announced same-store sales growth of $3.4 percent, while its stock jumped 25 percent. In other words, its anti-third-party-delivery stance isn’t killing its business, at least not yet. On the call, Domino’s CEO Ritch Allison did note that the company is still seeing a lot of pressure from third-party services. “As we look back on the quarter, it does appear to us that while we see continued headwinds in delivery that are difficult to forecast, aggregator pressure appeared to level off on our delivery orders in Q4, while carryout traffic was outstanding during the quarter, as our strategy to grow that business continues to pay off.“

Waitr to Lay Off 2,300 Drivers

Troubled food delivery service Waitr will lay off 2,300 delivery drivers in its home state of Louisiana, according to a notice filed with the state’s labor department. This announcement comes just a couple weeks after the service announced it would reclassify drivers as contract workers and pay them per delivery rather than per hour, as the old model dictated. The layoffs are effective April 6. A Waitr spokesperson said impacted drivers will be able to keep working as contracted drivers.

The Cheesecake Factory Is Finally Taking Yelp Reservations

Ever visit a Cheesecake Factory on a Friday at 7 p.m.? You’re lucky if you wait only an hour to get a table. Until now, that is. On a call with investors this week, the company announced it has partnered with Yelp to start offering limited seating reservations, meaning a certain number of tables will be set aside for reservations throughout the week.

This isn’t the most earth-shattering news out there today, but it does point to the work restaurants are currently doing to make the front-of-house experience more efficient and hopefully increase dine-in visits from customers. “One of the biggest hurdles for our guests can be our long wait times,” he said. “So we’re hoping this additional convenience will encourage guests who are more pressed for time to dine with us,” president David Gordon said on the call.

Troubled Food Delivery Service Waitr Shifts Drivers From Hourly to Contract Workers

Food delivery service Waitr said this week it is shifting its model so that drivers are classified as contract workers rather than hourly ones, according to KATC.

Under the new policy, Waitr drivers will get paid per delivery rather than by the hour. Companies paying contract workers aren’t legally required to offer benefits or withhold taxes, something Waitr must do under its current employee model.

For a long time, the service stood by its policy of paying drivers hourly and categorizing them as W-2 employees. Waitr founder and former CEO Chris Meaux was positive about the model when he spoke to The Spoon last year: “Efficient employees are much less expensive,” he said, adding that, “If you manage the driver flee right and you schedule the drivers when you need them, [you] can do it with a fraction of the drivers that [competitors] require.”

That tactic doesn’t appear to be paying off, however. KATC obtained an email Waitr sent to drivers that frames the change, which will take place in April, as a positive one, though it’s hard to buy that pitch looking back through Waitr’s activity over the last several months. 

The service, which went public in 2018, outraged customers and restaurant partners alike last year when it introduced a new “performance-based” fee structure for restaurants. Protests ensued. 

The company has also done three rounds of layoffs since June 2019, with the most recent one being last week. The company was for a time in danger of being delisted from the Nasdaq, and one report from October stated the company only has enough cash to run through March of 2020.

Waitr has seen its fair share of role changes, too. Meaux stepped down as CEO in August of 2019. He was replaced by Adam Price, who resigned at the end of December and was replaced by Carl Grimstad. Waitr’s CFO, Jeff Yurecko, also resigned, as have two board members.

Considering that glut of bad news, reclassifying its workers as contract rather than hourly seems less the positive change Waitr is trying to spin and more a desperate scramble to cut costs and try to save the struggling company. It’s doubtful that will be enough to save the company.

The switch also comes at a time when talk of how gig economy workers get classified is loud. California’s Assembly Bill 5, which reclassifies gig workers as employees rather than contract workers, was signed into law last year, though it’s getting significantly pushback from delivery companies. 

Week in Restaurants: Uber Eats Launches Group Ordering, Waitr Could Get Delisted

Recent news from suburban destination Dave & Buster’s brings up memories of the weekend I had one too many Washington Apples and lost my credit card during a Dance Dance Revolution challenge. If you’re planning similar shenanigans for the weekend, you might want leave the plastic at home and consider the chain’s new contactless payment app. More on that below, along with a few more noteworthy stories that happened in the restaurant industry this week.

Uber Launches Group Ordering
Aiming to further streamline the process for customers choosing and ordering food, Uber Eats this week launched a Group Order feature that lets multiple people participate in a single order. Customers just click the “Start Group Order” button within the app and can then share a link with friends, family, and coworkers, according to a blog post from Uber Eats. Restaurants can opt into the service for no additional charge. The feature is similar to Postmates group order feature, which launched this past August. DoorDash, meanwhile, has offered group ordering since 2017.

Waitr in Danger of Getting Delisted 
Third-party delivery service Waitr is in danger of getting delisted by Nasdaq, according to a recent regulatory filing. Nasdaq warned that the Louisiana-based company could be delisted because its stock has been below $1 per share for the last 30 consecutive business days. Waitr has until June 1, 2020 to regain compliance, which means its common stock needs to close at $1 or more per share for 10 consecutive business days before that time. This time last year, Waitr looked to be a promising alternative to bigger services (DoorDash, Uber Eats) for smaller U.S. cities. That has not been the case for Waitr, which has struggled over the last 12 months with bad press and profitability issues alike. The company acquired Bite Squad earlier in the year but has since written off much of that deal. 

Flynn Restaurant Group Offers Instant Pay to Restaurant Workers
A sad reality for the restaurant biz is that its workers earning an hourly wage often live paycheck to paycheck. Of late, more restaurants are addressing the issue by teaming up with tech companies that offer employees faster access to their wages. The latest is DailyPay, an app users can link their bank account, payroll card, or debit card to and instantly access their earned but unpaid wages. This week, the company announced a partnership with Flynn Restaurant Group, parent company of well-known restaurant chains like Applebee’s, Arby’s, and Panera. According to a press release, the partnership makes DailyPay’s capabilities available to more than 48,000 restaurant employees across the U.S. 

Dave & Buster’s Unveils In-store Contactless Payments App
If you’re up for a night of drinks and arcade games but worry about losing your credit card in the process (see above), there’s now an app for that. Dave & Buster’s this week announced a mobile app customers can use to pay for games at the famed arcade/bar/restaurant. Previously, one swiped a credit card to start a game. With the new app, customers can simply tap their phone. The app also manages rewards points users earn from in-store purchases like games.

The Week in Restaurants: Grubhub vs. NYC (Again), Choco Reinvents Ingredient Sourcing

Between trick-or-treat excursions, earnings calls galore, and the fact that AI is going to take over the restaurant industry, it’s been a busy week. While you battle the comedown from your Halloween sugar high, here are a few more bits of news from the restaurant industry this week.

Grubhub Had a Bummer of a Week
The Grubhub versus NYC restaurants showdown continues. This week, 30 members of the New York City council signed a letter demanding refunds for restaurants who were allegedly charged incorrect phone order fees by Grubhub. The letter is a response to a class-action lawsuit by a restaurant operator claiming they were charged for calls that did not result in actual orders, and it’s the latest event in an ongoing saga between Grubhub and NYC over how the third-party delivery service treats its restaurant partners. It also comes just on the heels of Grubhub’s disappointing third-quarter results, which show the service is slowing down in terms of growth and losing ground to DoorDash.

Choco Raises $33.5M for Ingredient Ordering Platform
Ask just about any restaurant operator, and they’ll tell you that sourcing ingredients is a time-consuming, error-prone process that still heavily relies on leaving voicemails and sending faxes. A company called Choco wants to change that with its mobile ordering platform for restaurants and suppliers that essentially acts like a food delivery app for ingredients. The company announced this week it has closed a $33.5 million Series A round led by Bessemer Venture Partners. The service is currently available in 15 cities across the U.S. and Europe, at chain restaurants and Michelin-star joints alike.

Little Caesars Takes its Pizza Portal to Canada
Little Caesars unveiled its Pizza Portal technology to Canadian customers this week. The heated, self-service pickup station, which has been in the U.S. for a little over one year now, lets users order a pie via the Little Caesars mobile app then skip the in-store line and simply scan a QR code to unlock their “portal” and grab their food. The Pizza Portal is now available in “nearly all” Little Caesars locations in Canada. Whether the chain will ever join the masses and start offering delivery remains unknown, but as Pizza Portal’s expansion suggests, delivery or no, Little Caesars isn’t sitting on its hands when it comes to improving and growing its digital strategy.

Waitr Partners With Checkers & Rally’s for Delivery
Louisiana-based delivery service Waitr announced a partnership this week with burger chain Checkers & Rally’s to deliver from over 200 of the latter’s locations in the U.S. The move looks to be part of an ongoing effort on Waitr’s part to team up with larger, higher-profile restaurant chains.

Bite Squad Launches Campaign to Deliver Meals to Needy Families This Thanksgiving

It’s not even Halloween yet, but already grocery store displays are showing off pumpkin pie filling, boxed stuffing, and other accoutrements to the traditional Thanksgiving meal. But with 37 million people in the U.S., including 11 million children, currently struggling with hunger, putting an elaborate holiday feast together is a stretch for many, out of the question for some.

On-demand food service Bite Squad has responded to the problem today by announcing a new campaign to deliver hot meals on Thanksgiving to thousands of families in need. Called Share Thanksgiving 2019, the program originally belonged to food delivery service Waitr, which Bite Squad acquired in 2018. It works like this: from today until November 5, restaurants are invited to commit to donating meals to families in need. Meanwhile, Bite Squad-Waitr employees and customers can nominate families. Bite Squad will also work with local community organizations to identify those most in need.

From the campaign page:
Over the next month, Waitr and Bite Squad employees and members of the local community will nominate families in need for the program. During this period, when anyone orders from Waitr, the company will make a donation that will go toward covering the cost of the meals. Each meal will be prepared by participating restaurant partners, allowing us to jointly provide eligible families with (literally!) restaurant-quality meals.

Just before Thanksgiving day, volunteer employees will come together to deliver the meals to the families.

Waitr founded the campaign in 2017, when it delivered 1,000 Thanksgiving meals to families in need. That number doubled in 2018, and this year, the Waitr-Bite Squad entity said it aims to share over 4,000 meals across 50 U.S. Waitr-Bite Squad markets. That includes the following states: Alabama, Arkansas, Florida, Georgia, Hawaii, Louisiana, Minnesota, Mississippi, North Dakota, South Carolina, South Dakota, Tennessee, Texas, Virginia, and Wisconsin.

We’ll be keeping an eye out over the next few weeks for other restaurant and food companies doing their part to help the needy this Thanksgiving. (Know of any? Drop me a line.) In the meantime, those interested in Bite Squad’s program can nominate a family here.

Waitr’s Partnership With Olo Underscores the Delivery Service’s Mainstream Ambitions

It was only a matter of time before companies started addressing the problem of how to help restaurants process third-party delivery orders without throwing an extra device or three at them, a situation otherwise known as “tablet hell.”

Right on the heels of a similar deal with Uber Eats, restaurant-tech platform Olo has teamed up with delivery service Waitr to do just that. According to a press release sent today, the two companies have partnered to allow direct integration of all Waitr/Bite Squad orders into a restaurant partners’ POS systems through Olo’s Rails technology.

Rails transmits orders coming from third-party sales channels like delivery apps directly into a restaurant POS system. This is in stark contrast to how restaurants have typically taken orders from third-party delivery apps. Historically, a restaurant would have to designate someone on staff to manually input those orders from a tablet provided by the delivery service into the main POS system — the aforementioned tablet hell scenario. As I wrote in January, when Olo nabbed an $18 million investment, “Olo doesn’t compete with third-party delivery services; it more or less partners with them, so DoorDash or Grubhub orders placed via Olo go right into the regular queue of tickets, without an employee having to manually input them.”

By partnering with Olo, Waitr will be able to offer all of its restaurant partners this kind of streamlined processing for delivery orders, which saves restaurants time, money, and, very basically, physical space in the restaurants.

Interestingly, Olo’s tech platform is typically aimed at larger chains: it counts Denny’s, Five Guys, and Chipotle among its growing list of customers. Waitr has up to this point focused on serving smaller U.S. cities and emphasizing the local aspect of its business. But the company recently became the center of a lot of bad press when it announced adjustments to its terms and fee structure for restaurants, which take a higher commission from restaurants with smaller sales volumes. In most cases those would be smaller, independent restaurants. While the new terms sparked protests in some of Waitr’s markets, they went through on August 1. Waitr hasn’t directly stated its focus has shifted to prioritizing bigger brands and restaurant partners, but as the restaurant biz goes, it’s typically the smaller shops who will have a hard time managing the new fee structure and may not be able to continue using Waitr’s service.

The partnership with Olo seems to further affirm that direction. “This direct connection into our partners’ order stream is delivering on our commitment to be the most valued partner for restaurants,” Waitr CEO Chris Meaux said in the press release statement. Apparently only if you’re Denny’s or Five guys, though.

Protests Over Waitr’s Fee Structure Highlight How Flawed Third-Party Food Delivery Is — For Everyone

Restaurants and customers in Baton Rouge, LA are currently holding a weeklong boycott of restaurant delivery platform Waitr. The protests are in response to the company’s recent adjustments to its terms and fee structure deal it has with participating restaurants.

Lake Charles, LA-based Waitr runs a third-party food delivery service similar to those of Uber Eats or DoorDash. The biggest difference in their business models thus far has been around expansion: since its inception in 2015, Waitr has focused on serving smaller U.S. cities, rather than the country’s huge metropolises. The company went public in 2018, the same year it acquired Bite Squad, another delivery service targeting mid-sized markets.

These protests, which started this past Sunday, take a shot at Waitr’s new “performance-based rate structure” for restaurants, which it unveiled a little over a week ago. With this new structure, Waitr takes a higher commission from restaurants with a smaller volume of sales, and a lower one for those restaurants with larger volumes. According to The Advocate, Louisiana’s oldest newspaper, restaurants with monthly food sales above $20,000 will be charged 15 percent per-transaction commission. The commission caps at 25 percent for restaurants with food sales below $1,000, according to a new Master Services Agreement sent to restaurants working with Waitr.

The new terms are set to take effect on August 1. Any restaurant that doesn’t sign the new agreement will be removed from the Waitr platform by July 31, according to The Advocate.

But Waitr could lose restaurant customers over these new terms, and many have already voiced concerns and frustrations over the kind of financial impacts this performance-based structure will have on already thin margins.

“We’re very concerned about Waitr changing their fee structure,” Mitch Rotolo, founder of Rotolo’s Pizzeria in Baton Rouge, told The Advocate. “If their model requires more revenue, they need to ask the customer to pay more for the service, instead of going back to the vendor and squeezing them. That’s unfair.”

Baton Rouge restaurant owner Jim Uridales, who owns Mestizo, told Louisiana news channel WAFB9 that, “Most people would be surprised that most restaurants live in a five to two percent margin on food, so taking that margin away would mean that every transaction would be a loss for us.”

The other side of the picture, of course, is that Waitr is now a public company under pressure to become profitable, which suggests this new fee structure is an effort to prioritize restaurants with higher profiles, inevitably weeding out the smaller businesses in the process. As Rotolo said, it’s unfair. However, it’s also probably one of the only cards Waitr has to play at the moment to boost its margins, even as larger third-party delivery services, most notably DoorDash, continue aggressive expansions into what some days seems like every nook and cranny in the country. And Waitr doesn’t have the $2 billion DoorDash has rasied to help its cause.

According to WAFB9, Waitr released the following statement:

To stand out in the competitive food delivery landscape, Waitr has adopted a performance based rate model where the more our restaurant partners deliver, the lower their rate will be. Our partners will discover this is a far more attractive option than those offered by our competitors. Waitr constantly strives to be the most valuable partner to our restaurants and this structure is reflective of the quality and service we provide.

Back in March of this year, Waitr’s CEO, Chris Meaux, told me, “We believe in the next five to seven years or so, we have a chance to be a significant leader in the space.” He also seemed very optimistic about his company’s approach to growth, which he likened to Walmart’s in the 1960s, when the now-giant retailer slowly expanded from its home state of Arkansas and took decades to even reach the coastal metropolises.

That style of growth seems slow for a public company considering growth is what the market wants to see. But is it also too slow for the tech-driven delivery era, where companies must move as fast as possible to offer as much choice as possible to a user base that isn’t loyal to any one platform? And are smaller restaurants taking the hit for what could ultimately have just been an unfortunately short-sighted business decision by Waitr?

The bigger question, though, is how Waitr’s situation will contribute to the debate around third-party delivery services’ power, which grows louder each week. Grubhub and Uber Eats both partook of a recent oversight hearing in NYC that addressed commission fees for restaurants (which are every bit as high as Waitr’s, by the way), and Grubhub has also come under deep scrutiny for potential cybersquatting and antitrust issues.

One idea, as Rotolo noted, would be to push the burden of cost back onto consumers by raising delivery and/or service fees, though that would spark just as much if not more outcry, most likely.

Waitr laid off 20 employees at the end of June in an effort to get rid of redundancies from the Bite Squad acquisition. This week’s protests, however they end, won’t help the company’s reputation, which it can’t afford to lose as other third-party players continue their march into the mid-sized markets.

Forget IPOs. DoorDash Is the One to Watch Right Now in Third-Party Delivery

Grubhub still leads the third-party food delivery market in terms of sales, and of late, Postmates and Uber Eats have gotten a lot of attention for their respective pre- and post-IPO news. But DoorDash may well be the most important company to watch in the escalating showdown for third-party delivery dominance, according to new data from tech company Second Measure.

Second Measure analyzes anonymized credit card transactions and uses that data to shed light on customer behaviors. In the world of third-party delivery, those behaviors underscore the rapid growth DoorDash has undergone recently, growth that has the company almost on equal footing with Grubhub in terms of monthly sales. Grubhub leads the market, with 32 percent of total monthly sales. But the company’s growth is now slower than its competitors, as evidenced in the following graph:

Source: Second Measure

DoorDash, meanwhile, holds 30 percent of the market in terms of monthly sales, and unlike Grubhub, it’s still growing rapidly. In February 2019, DoorDash closed a $400,000 million round and had a valuation of $7.1 billion. Besides investors, Second Measure notes in its report that DoorDash saw “a staggering 216-percent year-over-year jump [in sales], compared to 58 percent at Uber Eats and 4 percent at Grubhub.”

Part of those rising sales numbers are no doubt due to DoorDash’s aggressive push across the country. The service is the only third-party delivery service right now to be in all 50 U.S. states, in case you couldn’t tell from the endless numbers of promotions and partnerships the company does with everyone from Canter’s Deli in LA to Taco Bell to the Wyndham Hotels chain. The service is also now in 50 Canadian cities.

Impressive as the numbers are, no one’s place in the third-party delivery market seems certain because the space changes so rapidly — something that will continue for the rest of 2019 and beyond. DoorDash will have to work hard at retaining its customers if it wants to keep up. And as Second Measure and others have noted, loyalty to any one service isn’t something third-party delivery customers prioritize. For example, in the first quarter of 2017, 88 percent of Grubhub’s customers didn’t use another service; two years later, that number has dropped to 62 percent.

Unless, that is, you’re in the south. It seems of all the third-party delivery services out there, Waitr, who’s business is more focused on second-tier U.S. cities, has the highest number of loyal customers on the list. Waitr (who recently acquired Bite Squad) doesn’t (yet) have the reach or growth rate of DoorDash, but focusing on customer loyalty in cities that aren’t New York, LA, or other major metropolises could eventually be hugely advantageous. DoorDash should take note.

Waitr Takes a Bite Out of the Third-Party Delivery Market, One Small City at a Time

A brief history lesson: When Walmart first became successful enough to expand outside its home state of Arkansas in the 1960s, the company didn’t immediately barrel into heavily populated coastal cities like New York or Los Angeles. Instead, it opened locations Missouri and Oklahoma — neighboring states but not exactly the epicenter of commerce. Walmart didn’t actually make it to California until the ‘80s and New York until the ‘90s.

Chris Meaux, CEO of delivery service Waitr, argues that this focus on smaller markets is how Walmart built the mega-popular status it enjoys today. And if he has his way, Waitr will eventually be able to tell a similar story.

“[They] had such brand equity that they eventually got pulled into [major] cities,” he says of the big-box retailer’s eventual coast-to-coast expansion. “And I think the same thing could happen to Waitr over time. We’re building a very strong brand in the markets we serve. If the demand for that brand requires we get pulled into major markets, we’ll do it.”

To the consumer, Waitr looks much like any third-party delivery service: You download an app, order food, and wait for someone to deliver it. The company operates in many of the same markets as — and many markets where those bigger players aren’t.

To be clear, Waitr isn’t trying to be the next Walmart. It is, however, following the retail giant’s strategy of expanding from its smallish hometown — in this case, Lake Charles, Louisiana — into other smallish cities before heading to the mid-sized markets a la Minneapolis or Amarillo, Texas. Major metropolises aren’t even on the wish list right now.

Even its website emphasizes this localish approach, pushing the image of a hometown food service rather than a faceless entity that’s in every other American city. As Meaux explained over the phone recently, these places are perfect markets for Waitr’s business “because they haven’t gotten attention from some of the larger companies.”

Waitr’s current territory includes much of the Southeast and two dozen cities in Texas. And with its recent acquisition of Bite Squad for $321.3 million, that reach expands to smaller coastal markets like Virginia and Hawaii.

“It was almost exactly the same business model as Waitr,” Meaux says of Bite Squad, adding that larger companies tend to be more focused on demand for consumers, whereas Waitr/Bit Squad puts a lot of emphasis on partnerships with restaurants and drivers, too.

How to employ drivers was a key area on which Waitr and Bite Squad agreed, and it’s the other thing setting Waitr apart from the larger delivery companies. Waitr has, according to Meaux, around 18,000 W2 employees as drivers on its payroll. And he’s aware of how absurdly expensive that sounds to most people.

“It’s really a policy that employees are more expensive,” he says. “Efficient employees are much less expensive.” Because Bite Squad can schedule employees to work when they actually need them, they can more easily accommodate busier periods of the day (dinnertime) and cut back when it’s slow (2 p.m.). Meaux says drivers are reimbursed for personal vehicle and cellphone use. “If you manage the driver flee right and you schedule the drivers when you need them, [you] can do it with a fraction of the drivers that [competitors] require. And as long as employees stay busy, the company profits, because its fees are hourly, rather than a flat rate. Bit Squad, who still maintains its own operations, uses an almost identical approach when it comes to drivers.

It’s impossible to now right now whether this is a sustainable model for the long term. But Meaux, along with Bite Squad CMO Craig Key, are optimistic. “We’re excited about the future about Wiater and Bite Squad, we’re deep into the integration,” says Meaux. “We have a lot of opportunity for growth and expansion. We believe in the next five to seven years or so, we have a chance to be a significant leader in the space.”

He says there will also be room in that future to continue exploring a subscription-based model, something other delivery companies are currently experimenting with, too. Bite Squad’s Unlimited service costs $5.99/month, and users can order from participating restaurants within a four-mile radius. Meaux says there’s “tremendous opportunity” for the unlimited model, though it won’t be as significant as, say Amazon Prime was for e-commerce. “Products or services are oftentimes options. Food is not an option.”

One could argue that delivery is optional, but at this point, it’s so widely and cheaply available it’s become commonplace. In fact, Waitr’s heaviest users, Meaux tells me, are “moms with kids” who “have no time.” Paying a five dollar fee to not throw kids in the car and drive to the restaurant or grocery store seems a small investment when looked at in that light, especially when it comes to smaller cities and longer distances between any two places.

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.