Have Amazon Go and UberEats Become a Threat to Restaurant Operators?

Operators have always had to compete in the market with other concepts, but in today's market, there are a new set of power players ready to steal your customers.

Enter Amazon.

Amazon, like the fast casual segment, is catering to the on-the-go consumer with its cashier-less Amazon Go stores, many of which offer grab-and-go food options. These stores have become the most popular during the workweek, especially at lunchtime.

We recently analyzed the aggressive move Amazon is making in the foodservice industry. Listen to this episode of The Barron Report for more insights on if fast casual restaurants can survive this threat.

But there is one advantage that restaurants, namely fast casual restaurants, have over the Amazon Go stores– many have embraced the plant-based movement. According to Foodable Labs data, today's foodies can't get enough of these plant-based menu items.

Don’t miss our video breaking down this data about the plant-based movement below.

Amazon isn't the only threat operators need to be worried about. There is another shark circling to take a bite out of your business.

Third-party delivery services emerged as a solution that many operators desperately needed.

Since offering delivery has quickly become a guests' expectation, an operator has two options. One is to invest in significant funding to build a delivery program. However, this is easier said than done. It entails creating a system, investing in a platform to process these orders, hiring more staff to handle take-out and delivery orders, and then hiring reliable drivers to deliver these orders.

Or an operator can simply partner with a third-party delivery service, which eliminates most of the headaches. When you consider the operational and logistical challenges of offering delivery, its no wonder that operators across the country have decided to go the route of partnering with a third-party delivery service.

But now this has created a new problem.

One of the most popular delivery services out there is now UberEats. This company has quickly conquered the market. UberEats is currently offering food delivery for 50 percent of the U.S. population and has the lofty goal of serving 70 percent of the U.S. population by the end of this year.

As UberEats becomes more popular, the more the fees increase for the participating restaurants. Could this be correlated to the increase in restaurant closings?

Listen to the podcast above as The Barron Report host Paul Barron explains the data showing that third-party delivery growth may be tied to restaurant failures.

Food Delivery Discount Service Increases Sales During Restaurant Off-Peak Hours

Food Delivery Discount Service Increases Sales During Restaurant Off-Peak Hours

hough delivery has proven to be a huge market with the likes of UberEats and Grubhub snatching up restaurant dollars, it has also proven to be extremely expensive for operators and, consequently, for consumers.

According to Forbes, Restaurants could pay anywhere between 11% and 45% commission on each order if they sign up for a delivery service. And while restaurants admit that adding these services improve order numbers and total revenue, these rates are huge. And the delivery fees on the consumer side aren’t tiny either.

Two entrepreneurial brothers based in NYC noticed this issue while scouring for promo codes and coupons to lower their delivery order prices. Wondering, ‘why isn’t there some sort of food delivery happy hour’ Mohamed and Sidi Ahmed Merzouk set out to create this type of app.

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Restaurants Pinky’s Space & Cosa Buona Improve Packaging and Hold Times to Win Delivery Dollars

Restaurants Pinky’s Space & Cosa Buona Improve Packaging and Hold Times to Win Delivery Dollars
  • These restaurants are upping the ante when it comes to food delivery.

  • Colorful to-go boxes and menus cultivated for transit are methods to stand out in the food delivery industry.

Diners these days are looking for ease and convenience. They want food right from the oven to their door. With apps like GrubHub, UberEATS and Seamless delivery options are easy to find.

According to a study, the number of deliveries has risen ten percent. As a result of consumers craving convenience eating at home offers over eating out, restaurants are changing the way it does business.

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GrubHub Partners With Yelp to Offer Delivery From More than 80,000 Restaurants

GrubHub Partners With Yelp to Offer Delivery From More than 80,000 Restaurants

According to a report from the Wall Street Journal, GrubHub and Yelp have expanded their partnership. GrubHub delivery will now be made available from twice as many restaurants on the Yelp website bringing the total number of restaurants to more than 80,000.

This move may prove to be extremely beneficial for GrubHub who has been feeling tension with the many food delivery companies like UberEats and DoorDash trying to grab the top spot.

This partnership with Yelp is actually the last step in what has been a major move for GrubHub. The food delivery giant acquired Eat24 for $288 million. This partnership is aimed at not only garnering more market visibility but also increasing convenience and cutting delivery fees and delivery time. Digital Trends says ”if multiple orders are generated through Yelp, drivers will be able to make multiple deliveries on a single trip.”

“I see a point where we could conceivably have extremely low if not free delivery for consumers,” GrubHub co-founder and Chief Executive Officer Matt Maloney told The Wall Street Journal.

Yelp is adding to the pot as well by trying to up their game as customer’s first stop before a dining experience. With this new focus on delivery, Yelp just released a list of the top-ranked restaurants on their site that offer delivery through their app.

With even super-cheap restaurants like McDonald’s and Taco Bell adding themselves to the delivery game, delivery companies will need to figure out how to get delivery prices below the price of a dollar menu meal if they want to scrape up that market.  

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GrubHub Drivers Ruled Contractors in Landmark Gig-Economy Case

GrubHub Drivers Ruled Contractors in Landmark Gig-Economy Case

In a landmark ruling Thursday, U.S. Magistrate Judge Jacqueline Scott Corley in San Francisco concluded that a gig-economy driver does not qualify for the protection of employees under California law.

The decision is the first of its kind, setting a standard for arguments regarding “gig-economy” workers.

The gig-economy has gotten much press as of late. With a number of businesses like Grubhub and Uber working off the model of pairing customers with products and services through apps, many workers have found a new form of income allowing high flexibility in exchange for low skill, low wage, episodic jobs.

However, the case against GrubHub, brought on by Raef Lawson, claimed the company violated California labor laws by not reimbursing his expenses, paying him less than minimum wage and failing to pay overtime. His argument was based on the idea that Grubhub exerts a certain level of control over. The company expects drivers to be available to accept assignments during shifts they sign up for and to remain in designated geographical areas.

Lawson worked as a food-delivery driver with the company for less than six months while pursuing a career as an actor and writer.

At a hearing in October, Judge Corley expressed concern that Lawson’s resume filed with the lawsuit may have tainted the trial because the actor lied about completing a three-year program. The specifics of the program weren’t provided. However, Corley said Lawson was “dishonest” and that the resume “is really problematic to me.”

Charlotte Garden, an associate law professor at Seattle University, said to Bloomberg that Corley’s decision is a “doubly big” win for GrubHub since California’s relatively high standard for establishing workers as independent contractors will mean similar arguments in other states will most likely side with this ruling.

You can read more about this case at "Bloomberg."

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