New food delivery services vie for restaurants and space
Nabeel Alamgir is still waiting for a warning letter. If he gets one, he says he’ll consider it a badge of honor.
In January, food tech entrepreneur launched NotGrubhub.org, a map-based website that directs customers to restaurants that take food orders directly. It’s designed to bypass Grubhub and third-party food delivery apps and platforms that can legally charge commissions or marketing fees from Los Angeles restaurants up to 20%.
Each restaurant can add itself to the database, which is free for owners and customers and lists more than 120 companies nationwide. “This is just an awareness campaign,” says Alamgir, who used to work in the food service. He is one of several emerging voices calling for lower fees and more accessible technology in the world of grocery delivery.
The former head of marketing at Bareburger said he had watched his chain’s profits decline over the years and found that mom and pop restaurants could also exist if a national chain were hurt by app commissions and fees.
In 2019, Alamgir co-founded Lunchbox, a platform that charges restaurants a flat monthly fee – as opposed to sales commissions – that ranges from $ 88 to $ 490, depending on the service package. Most customers, he says, pay $ 200. The platform hosts and designs apps, websites and order pages. maintains the virtual end of cloud kitchens; and creates marketing materials such as Instagram ads. Lunchbox also hires the same delivery drivers used by the major third-party platforms for the same price of around $ 6 per driver per order, making it easier for restaurateurs and chefs to use marketing technology and materials.
(The hospitality group SBE and its virtual food hall subsidiary C3 used lunch boxes for an internal app and website that customers can use to order in the company’s 40 or so restaurants. “You can have an umami [Burger]You can have a Krispy rice and a crispy chicken from Sam, ”says Sam Nazarian, CEO of C3. “You can order from up to 15 menus at the same time.”)
“A very messy system was created because restaurant people don’t start these tech companies – tech people,” Alamgir says. “Restaurateurs are not technicians. They want to be hospitable and create great food, and then we said to them, “You have to be great with technology, otherwise you’re dead. Your business is dead.” “
The new competitors usually promise restaurants one of two things in order to stay competitive with larger, more established platforms: flat fees like lunch boxes or commission rates that can be as high as 2%, as well as marketing functions that help restaurants stay visible.
Grassroots and local-minded newbies can also offer bespoke curation, privacy, and a full shift from third-party delivery systems.
The owners of Pasadena-based DïNG – not to be confused with Ding Menu, a new, commission-free restaurant ordering tool – want it to become the spotify of food platforms by customizing meal recommendations based on a two-minute quiz.
Former DïNG chef and co-founder Mike Chen said his background in data science helped inform the company’s algorithm, which is based on answers to questions like “What looks good on a cold winter night?” (You can choose fish fillet in chili sauce, braised pork belly, or a soup made from salted pork with bamboo shoots.)
The Asian-focused operation also allows menu ordering, but the format is organized by dish or even by region, as opposed to separate restaurants, creating a kind of editorial selection of noodles, poached chicken, curries, stews and much more all in one Mixture emerges from restaurants largely located in the San Gabriel Valley.
The platform charges a commission of less than 5%, and the startup also focuses on user privacy: employee drivers, also used by third-party apps, pick up groceries from the restaurants and deliver them to certain DïNG transfer points. From there, the company’s own drivers deliver on the last leg of the route in order to avoid private addresses being made available to the most important platforms.
DïNG, which is being boosted by the pandemic and is still developing, operates a limited radius with daily service. By the end of 2021, Chen hopes that all of Los Angeles County, Ventura and Orange counties will receive the same daily service.
Some innovators never had any intention of getting into the delivery business in the first place. Jared Jue envisioned MAMA as a restaurant recommendation website, but as the pandemic began to shut down independent restaurants, the founder felt a need to sustain businesses in need, many of which are underrepresented in the media and run by immigrant families.
With the help of Alice Han, MAMA launched Drive-By Kitchen, a new service that takes an ever-changing selection of dishes from several restaurants in LA and Orange County and then delivers them to three pick-up locations: Westside, Koreatown and Alhambra. The service is not offered daily. Rather, it is scheduled roughly every two weeks. Customers have to order in advance, much like an event, and tickets are limited.
Drive-By Kitchen attendees are often restaurants who cannot afford to participate in key delivery apps, or who are not tech savvy and who keep 100% of the profits. MAMA’s only customer fee? A credit card service fee, plus a small fee for team members and gasoline.
“Corporations lived and died on the phone, waiting for some kind of Doordash, Grubhub, or Uber to come through, and I think it was just mentally taxing because they weren’t getting what they needed,” says Jue. “We knew we wanted to focus on placing large orders with the restaurants so that they would have something concrete in a way.”
The format ensures that restaurants do not lose money on food costs, while the “Combo Meal” format offers guests a new line-up every time. That year, Drive-By Kitchen, overseen by Han, also launched a meal matching program, where every meal sold is matched by a nonprofit partner. The income of the restaurants will be doubled and the second part will be donated to people in need such as senior citizens in Chinatown.
“When it comes to the big players in the market, we are in no way trying to compete with them. I think they come first in business and our mission is more culturally relevant, ”says Jue. “We’re really trying to keep the dishes, the recipes, the restaurants – things like those that will actually go away at the end of this whole thing. Is it sustainable? Hopefully. I hope we can change the conversation. “