OpenTable is joining the increasingly crowded delivery market, announcing a partnership with Caviar, Grubhub and Uber Eats today.
The app-based service launching this week will offer delivery to 8,000 restaurants in 90 cities across the United States. The app is a redesigned version of the company’s previous one, allowing for increased customization by upvoting or downvoting, past bookings and other tracking options.
Partnering with these three delivery services allows OpenTable to expand without having to deal with the operation of its own fleet, while providing access to its customer base, Kayak CEO Steve Hafner told The Associated Press. “All these companies are in a chase for growth and they want to be where the consumers are,” said Hafner.
OpenTable is part of Booking Holdings, which also owns Kayak, and claims to have 51,000 restaurants around the world and seat 125 million diners each month. Caviar, founded in 2012, is owned by mobile payment company Square, operating in 16 cities across the U.S including Boston, Chicago, Seattle, Portland and Washington.
Grubhub claims to have more than 115,000 restaurant partners in over 2,200 U.S. cities and London, and includes brands Seamless, LevelUp, Tapingo, AllMenus and MenuPages in its portfolio. The company reported revenues of $324 million in its first quarter of 2019, a 39 per cent year-over-year increase from $233 million in the first quarter of 2018.
UberEats, using the Uber platform, says it serves 500+ cities globally. According to Uber’s website, the company has 91 million monthly active platform consumers and 3.9 million drivers as of December 2018.
This move by OpenTable comes following a year of upheaval in the restaurant delivery market.
Amazon Restaurants, the service powered by delivery powerhouse Amazon, officially shuttered in the US as of June 24, following its retreat from the London market last year. ““It has a toe in everything and this wasn’t immediately paying off, so they pulled back,” Bill Duffy, research director at research and advisory firm Gartner, told Adweek. “They could come back again, but I think they found restaurant delivery is very competitive.”
Earlier this year, another potential move by a big player came to light: Google integrated DoorDash services into its platform (DoorDash was recently in the news over a tipping scandal involving its pay structure to its drivers — a controversy that has forced the company to recently change its model.)
As the delivery landscape becomes even more crowded, the consumer response remains to be seen. Although clearly, the service is in high demand and has the numbers supporting the interest of companies investing in this space, the failure of a behemoth such as Amazon, who specializes in delivery, may give some newcomers pause. An interesting survey by Trendsource last year indicated that the US diners surveyed were more likely to use an app from a chain restaurant itself, rather than a third party option. And some chains, such as Domino’s, who already have a dedicated app, are watching the third party delivery market closely.
“We’re not going to do foolish things, you know, in the short term in reaction,” CEO Ritch Allison told CNBC’s Mad Money. “We don’t know how that’s going to shake out once consumers actually have to pay the full cost of that delivery because those fees are quite substantial, relative to the cost of the underlying food. I think we also have not yet seen what’s going to happen with the supply of restaurants on these platforms as well.”