Loops
Living in New York, I use the MealPal app to schedule my weekday lunches:
Less (or no) wait time is an ideal experience.
MealPal is available in around two dozen major worldwide cities.
But if you do live in a major city, you may already have a favorite among a list of food pickup and delivery names.
When Shake Shack ($SHAK) opened its first location in Madison Square Park in 2004, after evolving from a hot dog cart, it became a local lunch sensation and eventually a tourist destination.
This week, it was news that Shake Shack will start to deliver in 4 test locations after years of vowing never to do so:
Its partner will be Grubhub ($GRUB), the owner of Seamless, which has been New York’s most popular food delivery service since this whole industry kicked off digitally:
There is no global equivalent of a Netflix ($NFLX) in food delivery even as several companies, big and small, do battle.
Even Square ($SQ) had to exit the space and announce this month it is selling Caviar to DoorDash:
“The acquisition will consolidate even more of the delivery market under DoorDash, now one of the leading food delivery services in the country. DoorDash competes directly with Uber’s own food delivery arm, Uber Eats, and market leader GrubHub and its network of websites. Caviar, however, was a far less accessible option, as it focused mainly on higher-end restaurants and commanded a higher price per order than your standard food delivery platform. With Caviar joining DoorDash, it seems like the latter will be able to cover a broader swath of restaurants that its lower-cost existing platform has been unable to serve.
For Caviar, a DoorDash acquisition sounds like a best-case scenario after it’s spent years floundering at Square, which bought the company for $90 million in 2014 and used it to replace its failed online ordering and mobile wallet platform. It does not appear that DoorDash has plans to shut down Caviar any time soon, but it may integrate Caviar’s listings into the main DoorDash app.”
But even when a meal is ready on-time and tastes delicious and doesn’t cost much to a customer, it is not a victory for every small business or restaurant, who face fees stemming from a contractual reason or others more dubious:
“In other words, Grubhub is claiming that every phone call to a restaurant originating specifically from the Yelp app is attributable to Grubhub’s marketing efforts. The Yelp website does not list referral numbers.
Both companies said they do not measure call volume. However, people have been using Yelp as a directory since long before it partnered with Grubhub. This suggests that Yelp may be driving callers to Grubhub rather than Grubhub’s marketing efforts driving callers to Yelp and then to restaurants.
Grubhub’s CEO seemed to say as much in March 2018 when the two companies announced that customers could now order through Grubhub from within Yelp.”
The “Netflix and chill” term has global appeal whether or not you integrate food into your evening.
Netflix’s competition isn’t chillin’ but it has a lot of catching up to do:
“As with the company itself, Netflix’s ad-free, single-tier model didn’t need to work. There were many path dependencies that might have aligned the industry around different principles, leaders and price points. The Hulu joint venture, for example, was once intended to have even more corporate parents (and thus controlled more potential supply) serve as a hub for each of their TV Everywhere experiences, and launch a virtual Pay-TV service as early as 2014. This would have dramatically changed both the marketplace and Netflix’s prospects. Alternatively, Netflix might have been bought in the early 2010s. Or been crushed by an untimely aftershock recession. One can debate how profitable of a business Netflix will become, or whether another service might grow larger over time, but its position as a leader is stable. It was enabled to grow for too long and is now too insulated from the competition thanks to legacy content rights and digital feedback loops.”
Bon appétit!
