The days of food delivery being limited to pizza and Chinese takeout are long gone. With the emergence of app-based delivery platforms like UberEats, DoorDash and GrubHub, getting meals from restaurants right to your doorstep has never been easier.
In the early days, food delivery was quite limited in scope. You had some options like pizza, Chinese food and the occasional chain restaurant that offered delivery. But the vast majority of restaurants did not offer or have the capability for delivery themselves. That changed with the advent of web-based platforms like Seamless and Grubhub in the early 2000s. They focused specifically on food delivery by allowing customers to order online from restaurants in major cities. But it still required the consumer to order directly from a given restaurant.
Driving Forces Behind the Delivery Boom
Several key forces drove demand and shaped the current landscape for restaurant delivery services:
- Convenience and lifestyle changes – Busier schedules meant less time for dining in or pickup. Delivery provided much-needed convenience.
- Smartphone adoption – Food delivery apps only work if customers can access them easily via smartphone, which reached mass critical adoption.
- Investments in the sector – VC money poured into food delivery startups, making the service extremely widespread. No restaurant was out of reach.
- Back-end technology – Delivery logistics software enabled seamless connections between restaurants, drivers and customers.
Under the Hood: How Modern Delivery Works
Behind all the seamless apps, there are several moving parts in the food delivery business: contractors handle deliveries according to demand. Restaurants receive orders and provide estimated prep times. Customers track drivers via GPS and get text alerts on order status. It’s a digitally-enabled ballet powered by demand generation algorithms, location software, and optimization engines – maximizing efficiency for all parties.
For customers, the apps provide an easy point-and-click interface to an exhaustive list of dining choices in a city. However delivery still has its challenges. Delayed orders, inaccurate items, and mediocre fries upon delivery continue to frustrate users. But the added convenience still outpaces the pitfalls for most.
The Restaurant Experience
While delivery orders represent big revenue potential for restaurants, they also create operational headaches in the kitchen and temper profits due to commission fees averaging 15-30%. The apps provide much needed revenue streams, but concerns persist around their sustainability and fairness toward restaurants running on thin margins. Do the costs outweigh the benefits in the long run? The jury is still out.
Continuing to Evolve
Major players continue to duke it out for market dominance, but niche apps also target specific cuisine types like tacos, salad, or high-end dining. And on the horizon experimental solutions like delivery drones and driverless vehicles may shake up the playing field yet again. One thing does seem certain – our appetite for delivery continues to grow.
