How Are Food Delivery Apps Changing the Restaurant Industry?

The Internet was the great disruptor of the 20th century — and it’s still transforming the global restaurant industry today.  Apps such as Uber Eats, GrubHub and DoorDash are bringing meals from your favourite neighborhood restaurants right to your door. But is this new era of dining-on-demand making our lives better? Well, it depends on who you ask.

Major Restaurant Brands Are Getting in on the Act

According to a recent article from Forbes, we’ll be spending more on restaurant deliveries than on dine-in experiences in the near future. For the consumer, this means greater choice — which is always a good thing. But if you’re a local neighborhood restaurant owner trying to make ends meet, you might be worried about what the future holds.

And it’s not just the food delivery app that is changing the industry beyond all recognition. Many leading branded restaurants are developing their own delivery services. For years, Applebee’s has operated a food pick-up service. You simply order your food over the phone or online, and then drive to your local restaurant at the allotted time. Once you’re there, you just wait in your car — a server brings your order right to you.

But Applebee’s has gone a step further. The iconic restaurant chain recently started its own delivery service. The brand’s entire menu can be delivered — piping hot — to your door. Make no mistake; pizza delivery services now face some serious competition.

For most leading restaurant brands, however, food delivery is still considered a supplementary business. Perhaps this is why most businesses are turning to third-party apps such as Uber Eats. Take Shake Shack, for example. The brand’s share prices have soared in recent years, thanks to strong earnings driven by a new food delivery partnership with GrubHub.

We’ve seen Chipotle Mexican Grill partner with DoorDash and McDonald’s team up with Uber Eats. Even chains such as Domino’s and Pizza Huts — with their own, established delivery services — are turning to third-party apps. Why are they doing this? Because the demand for delivery is hard to predict. Rather than taking on delivery staff, leasing vehicles and paying maintenance costs, these international brands can now leave all those headaches to the likes of DoorDash and Postmates.

Major corporations with money to invest in delivery services are finding new, highly lucrative revenue streams. Independent eateries, however, are seeing their dine-in business suffer. According to Upserve, online restaurant sales are rising fast. By 2025, around 30% of total sales in the U.S. are expected to come from digital channels.

Think about that for a second. Nearly one in three restaurant meals will have been ordered and paid for online. The smaller restaurants that can’t adapt to this new dining landscape might find competing very difficult in the coming years.

What Does This Mean for the Consumer?

If you’re someone who enjoys restaurant food, or you like to make travel plans in advance, restaurant delivery apps and all the other digital options available offer both choice and convenience.

Food delivery apps offer many benefits to the average consumer, but they’re not perfect by any means.

Food Delivery App Pros

  • Convenience

Let’s be honest: there are times when we just don’t have the energy to get ready and head out for dinner. Food delivery apps allow us to order restaurant-quality food without getting up from our couch. And this is a benefit that millions of us are prepared to pay a premium for.

  • A range of payment options

The leading apps allow you to pay by debit and credit card. Some allow you to load up your account with credits — or load credits onto someone else’s account.

  • Track your food

If you’ve ever used Uber Eats or one of the other leading apps on the market, you’ll know that you can track your food in real-time. You’re informed when your food is being prepared, and when it has been picked up. You can also follow the delivery vehicle as it makes its way to your location.

  • Discounts and offers

GrubHub, UberEats and most of the leading food delivery apps have their own loyalty schemes. Points or credits are awarded for every order. This can give you free meals, free delivery or significant discounts. There are also flash sales and welcome offers to new customers.

  • Compare deals

If you’re in your local mall or city, you can’t easily compare the prices, menus and special offers available at all the nearby restaurants. But these comparisons are easy with food delivery apps. Whether you’re dining on a budget or unsure about what type of food you want, this functionality is very useful.

  • Easier trip planning

Planning a trip is lots of fun, but it’s also a very important part of budgeting. If you need to keep a close eye on money, or you’re simply someone who likes to plan every aspect of a trip in advance, food delivery apps are very useful tools. Whether you’re staying in a hotel or an RV, you can check whether or not your favorite restaurants deliver to the various locations along your route.

Food Delivery Cons

  • Waiting times

Depending on the availability of drivers and the time of day, you might have to wait up to two hours for your food to arrive.

  • A diminished experience

Food delivery apps can do a lot of things, but they can’t replicate the unique experience of being waited on in a restaurant setting. There’s something special about going to a charming eatery for dinner, and you’re never going to recreate that at home.

  • More expensive

You’ll usually have to pay restaurant prices when using food delivery apps — which you might find a little expensive if you’re eating in your living room. Not only that, but most apps also add a delivery charge and a service fee to the total.

  • We’re becoming more insular

Generally speaking, the Internet has made our lives easier. But has it made our lives better? Eating a great meal — at a table with friends and loved ones — has always been an important social event. Our growing reliance on food delivery apps means we’re spending more meal times alone or in front of a TV.

What Does the Future Hold for the Restaurant Industry?

There’s nothing new about the relationship between the Internet and the restaurant industry. Around 90% of diners research a restaurant online before dining. And more than half look for a restaurant’s website before booking. But what we’re seeing with restaurant delivery apps is something completely different.

According to research by Upserve, 60% of restaurant operators are reporting significantly increased sales as a result of offering delivery services. And this number is only going to get higher. We’re living in a consumer-led society these days. Cash is king, and the people will get what they want — if they’re willing to pay for it.

But there is some resistance to the growing influence of food delivery apps. The California State Assembly aims to help independent restaurants stand up to huge tech companies. The law (known as AB2149) will require app developers to obtain the owner’s permission before listing a restaurant on one of its apps. And the legislation will stop so-called pop-up restaurants — which are often little more than someone cooking in their home’s kitchen.

 

Food delivery apps give is all a little more control over our eating decisions. Whether you’re using them to order restaurant food, access menus, read reviews or work out the cost of a family meal, these easy-to-use mobile apps are changing the way we eat.

 

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