Food delivery aggregators: love ‘em or hate ‘em, few would at this point deny that restaurants need them right now. Maybe that’s not where we’d like to be as a restaurant industry, but it’s where the pandemic has forced businesses — a point underscored by new survey data from tech company Raydiant. According to the new report, which surveyed restaurant operators and managers, 37.5 percent of restaurants would not have been able to stay in business without third-party delivery apps over the last several months.
But not all third-party delivery aggregators are equal in the eyes of restaurants when it comes to trust. Arguably the most interesting part of Raydiant’s survey is the breakdown of which delivery service respondents “associated most with trust and support.” DoorDash won in a landslide, with 58 percent, followed next by Grubhub at 18 percent and Uber Eats at 17 percent. Seamless, which is owned by Grubhub, came in last, with a whopping 1 percent.
The report does not go into specifics as to how it defines “trust” and “support.” But a quick comparison of recent developments from these services illustrates why the names stacked up as they did in Raydiant’s survey.
DoorDash was quick to respond to restaurant shutdowns when the pandemic came Stateside back in March, waiving fees for certain restaurant partners and setting up a relief fund for businesses. Since that time, the company — which is trekking towards an IPO — has positioned itself as an ally to struggling restaurants. Just earlier this week, it launched its Reopen for Delivery initiative, which will help shuttered restaurants rebrand as virtual concepts. The company is not without its controversies, but it’s managed to steer clear of major ones over the last several months.
Grubhub also responded speedily to the restaurant shutdowns — by making an opaque announcement that initially seemed to say it was waiving commission fees when in reality the service was only delaying collection of them. Grubhub has also racked up numerous complaints from restaurants, including bogus phone fees, outrageous commission fees, listing non-partnered restaurants, and this bizarre saga.
Uber Eats and Postmates generate fewer controversial headlines, though they, along with DoorDash, also charge restaurants unsustainably high commission fees for every order placed through their platforms.
All this doesn’t mean restaurants should ditch their partnerships with the others in favor of working with DoorDash. Many agree that more is better when it comes to delivery aggregators these days. And like I said, we can hate on delivery services all we want, but the complicated logistics of delivery in 2020 makes them cheaper and faster for restaurants than any other solution that exists right now.
Nor, however, should restaurants hedge all their bets on third-party delivery services, which are definitely not hedging all of theirs on restaurants. Recent moves by both DoorDash and Uber Eats into grocery delivery make clear that these services will go where there’s money to be made. Online grocery sales are expected to hit $250 billion by 2025. The restaurant industry, meanwhile, has already lost billions of dollars due to the pandemic.
Simultaneously, new approaches to restaurant delivery are emerging that bring ordering, branding, and sometimes even the drivers back into restaurants’ control. This will only accelerate with the rise of virtual restaurants and ghost kitchens. Restaurants may still need third-party delivery, but it’s only a matter of time before they need it, or at least pieces of it, less.
It all makes third-party delivery something of a fair-weather friend to restaurants. Despite the relief funds and press releases proclaiming they’re here to help restaurants, delivery services are also making clear that they are, first and foremost, tech companies in the business of moving goods. They’ll go wherever those goods happen to be most plentiful. Given that, trust around these services seems tenuous at best when it comes to restaurants.
Delivery isn’t the only thing that’s here to stay. Ghost kitchens and virtual restaurants have also proven themselves mainstays of the restaurant biz over the last few months. But what’s the difference between a ghost kitchen and a virtual restaurant? Does every restaurant need to invest in this space? Where the heck does one even begin?
On December 9, The Spoon will gather together restaurants, industry analysts, restaurant tech companies, ghost kitchen operators, virtual restauranteurs, and others to talk through the above questions and more. The day will provide a variety of perspectives on where the ghost kitchen and virtual restaurant sectors are headed as well as next steps for those wanting to get involved.