Washington Restaurant Market Watch: Big players move into food delivery business

Washington Restaurant Market Watch: Big players move into food delivery business https://wahospitality.org/wp-content/uploads/2015/12/delivery2015a.jpeg

By Paul Schlienz

Food delivery service is a big thing that’s about to get even bigger.

Nearly every city, in the U.S. and Canada, has several food-ordering apps and numerous existing services – like Seamless and Postmates – that specialize in quickly bringing meals from restaurant to customer.

Now the big boys are moving into this lucrative business.

Amazon, for one, is adding restaurant delivery to its rapidly expanding array of on demand services. After a trial run in Seattle, Amazon recently announced that Prime Now-based food delivery will soon expand to 20 major metropolitan areas across the U.S.

Amazon, however, is not the only big player with eyes on food delivery.

Uber, the well-known ridesharing company recently launched its first standalone app that’s unrelated to getting a ride. Christened UberEATS, this is a new food-ordering app initially available in Toronto. With UberEATS, you’ll be able to order food the same way you order an Uber ride with the added benefit of tracking its progress from the moment you order it to its arrival at your door.

For the past year and a half, Uber has been testing UberEATS inside its ridesharing app. The in-app version is currently available in 12 cities, but the new UberEATS app has grander ambitions of taking on the entire food ordering industry.

Will these ambitions work out?

“Amazon has a broad web offering and client base, Uber has the delivery network and both are accustomed to on-demand services,” Gareth Green, chair of Seattle Pacific University’s economics department, told Seattle Met. “However, the profit margins are slim, so the question is what will they do differently to make it worthwhile.”

Amazon’s Prime Now currently has an annual $99 fee. The service has a free two-hour delivery window, but if a customer wants something in one hour, the company charges a $7.99 delivery fee.

“At Uber, the scale-this-to-the-entire-world button can be pressed very easily, and before we do that, we want to make sure we’re actually solving the problems people have,” said Jason Droege, head of Uber Everything – the company’s division that handles everything other than ridesharing, told Wired.

Meanwhile, the restaurant industry watches these developments with great interest.

“In an industry that has very little marketing budget, this could be really cool,” Anthony Anton, president and CEO of the Washington Restaurant Association, told Seattle Met. “We don’t drive trucks or do delivery for a living and we don’t want to get into that; we don’t have the infrastructure. But let us do this together—at the end of the day we are still learning about food safety and delivery.”