ChowNow is launching a “diner impact score”, which shows users how much money they’ve saved restaurants by ordering on the platform. The company’s CEO and founder Chris Webb said the score is an opening salvo in the company’s effort to launch a digital marketplace for independent restaurants and rival DoorDash and Uber Eats as a demand-generation tool.
“If we’re going to launch a marketplace it needs to speak to both diners and restaurants,” said Webb. The diner impact score makes it clear that ChowNow is a lower-cost, restaurant-friendly alternative to the delivery marketplaces operated by companies such as DoorDash and Uber Eats.
The company calculates diner impact score with a simple formula: 20 percent of order value for delivery and 10 percent for pickup orders, based on a user’s order history. Webb said another score — the amount of money a ChowNow user has saved in terms of delivery markup — would be available sometime in 2022.
Twenty percent is a conservative figure. Commission and fees on DoorDash can run as high as 30 percent. When NYC attempted to cap fees-plus-commission at 20 percent, the major delivery platforms sued to block the law.
Per ChowNow’s website, the company has helped restaurants avoid more than $470 million in commissions. Webb said they were still working to find a precise number of dollars that their users had saved, but estimated it was “north of $100 million.”
Marking up menu prices on delivery orders is fast becoming standard practice. “Chipotle really led the way on it,” said Webb, and at the Food On Conference, Aaron Noveshen, CEO of Starbird, urged all attendees to raise prices on their delivery menu.
ChowNow, which recently turned ten, harkens to a time before delivery marketplaces dominated digital restaurant sales. Its founding mission was to help independent restaurants get online and compete with larger chains that can manage their digital presence in-house. As the power of delivery marketplaces has grown, “restaurants have been asking us for an alternative,” said Webb.
Technically, ChowNow has operated a marketplace for a long time, but “it isn’t something we really focused on,” said Webb. Listing on the marketplace came free for restaurants that bought software from the company. They’ve disentangled the marketplace from the software business, and are inviting all independent restaurants to join the platform, free of charge.
The only ask? “Don’t charge a markup.” Per Webb, the marketplace “exists because it helps restaurants avoid commissions,” and ChowNow wants restaurants to pass part of that savings on to the consumer.
Virtuous alternatives to profit-seeking platforms don’t have a great track record. Tidal, the music streaming service that promised to pay artists more than Spotify, famously failed to break through. But with more than 20,000 independent restaurants and 20 million users, ChowNow has a head start. If it can successfully drive a wedge between digital marketplaces and delivery fulfillment, it could save restaurants a lot of money.
Of course there are still some fees, ChowNow charges 2.95 percent + $0.15 for credit card processing.