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For many people – and restaurants – food delivery has been a lifeline when personal food felt too risky or was closed during the pandemic. That habit seems to remain and now everyone involved is trying to figure out how the delivery business works for them.
My colleague Kate Conger wrote on Friday about food delivery resilience as the coronavirus pandemic in the US wears off. She spoke to me about how restaurants and app companies like Uber Eats and DoorDash are rethinking post-pandemic home delivery and handling complaints, including fees and complexities that upset restaurants and some diners.
Shira: A lot of restaurants in the US say that people do pack their dining room again and that restaurant delivery orders haven’t dropped much from the pandemic level. How can both happen?
Kate: It is clear that many people found these delivery apps useful during the pandemic and are willing to keep using them even if it costs them more. I hesitate to predict whether the pandemic behavior will last forever, but I think the DoorDash manager I interviewed is probably right: it is often difficult for people to step back from activities they deem comfortable.
What do restaurants think of the possibility that delivery apps could become an integral part of their business?
It’s a mix. There are people like May Seto, a restaurant owner who has repurposed her catering kitchen to make pizzas that customers can only order to take away or through the delivery apps. She believes delivery will stay here and she is adapting her business to accommodate it. Other restaurant owners can’t wait to call themselves back on delivery because they are frustrated with the cost and hassle.
And there are people in the restaurant business who are right in the thick of it. They believe that it can be lucrative and important to deploy, but some of them are advocating changes to make app services more sustainable for them, such as capping the fees the app companies charge.
Did delivery app companies respond to any of these concerns?
In some cases, yes, and politicians have intervened to force change. DoorDash now offers restaurants more fee options. Instead of taking up to 30 percent of a restaurant’s sales, the restaurant can only pay 15 percent for delivery and then pay more for extras, such as: B. for a higher display in the app search results.
San Francisco has permanently capped the fees that delivery apps can charge restaurants, and other cities have put temporary restrictions in place during the pandemic. Some restaurant owners fear that if these fees return to previous levels, the math won’t work for them.
There are restaurant owners, delivery couriers, and diners who have big problems with grocery delivery apps. And the app companies are still mostly unprofitable. Do you see these as temporary problems or is something fundamentally broken in the food delivery?
There is increasing pain and also the compromise of comfort. Job seekers may find aspects of delivery work unattractive, but it is also a position that they can sign up for with relative ease and start right away. Guests may not like that a meal delivered isn’t as fresh as what they would get at the restaurant and cost more, but that’s a compromise many make in getting food to the table. Many restaurants needed a delivery last year when their restaurant business was shrinking, even if there were aspects they didn’t like.
Can restaurants be an attractive place to have a personal meal even if the meals are being prepared for delivery? Grocery stores are struggling this double duty.
It’s not always easy. The ability to do well both delivery and food depends somewhat on the physical space of a restaurant. For restaurants with small dining rooms, it can be annoying if every few minutes a delivery courier comes into the room where people are eating. But I’ve also spoken to restaurants that have more space and can provide a counter for delivery orders and also have enough parking space for personal customers and couriers in front of the door.
Why are DoorDash and Uber expanding in deliver all sorts of things like groceries, alcohol and convenience store items? Is that an admission that it’s hard to make food delivery profitable or sustainable?
It is a good question. Gastronomy does not have high profit margins. That doesn’t leave much room for maneuver when the money for a meal order is split between a restaurant, a delivery courier and the app company.
Delivering more types of products can cushion app companies when customers turn away from restaurant delivery. And it’s also a way to try and generate higher priced orders. If you order a dinner at DoorDash and attach some items from 7-Eleven, you are spending more and there is more potential for everyone involved to make a profit.
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Before we go …
Unusual sales on Amazon: On Monday, Jeff Bezos will officially step down as CEO of Amazon. My colleague Karen Weise writes that the company has seen a brain drain over the past 18 months. Maybe that’s what happens when companies like Amazon and Google get that big and rich?
Read more: Read Karen and Dai Wakabayashi’s February article about Amazon’s next CEO, Andy Jassy.
I will never look at gift cards the same way: A Microsoft engineer found a software bug that allowed him to steal more than $ 10 million worth of Xbox gift cards. He then traded them for Bitcoin and lived a life of luxury with the money. Bloomberg News explains the whole caper and how he was caught.
Don’t curse your headphones: If you own wireless headphones, you may have been frustrated when they don’t connect properly to your computer or other devices. Lauren Dragan of Wirecutter, the New York Times product recommendation site, explains why and how the problem can be addressed.
It is Friday. It’s almost a bank holiday weekend. Please enjoy Muffin enthusiastically while the dog (or puppy) is paddling.
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