Food delivery workers on bicycles travel along a street in New York. Photographer: Demetrius ... [+]
The coronavirus outbreak is forcing more people to rely on food delivery apps as they stay home, and restaurants close dine-in options. Although keeping up with the surge of orders is putting a strain on both restaurants and delivery apps, many have responded by eliminating fees and hiring more workers.
"I think most consumers understand the situation. Delivery time estimates will vary, and your food could come significantly later than you expect while placing an order. Some restaurants have the bare minimum of employees in order to provide delivery or pick up services. Everyone needs to be patient in these turbulent times," Michael DiBenedetto, CEO and founder of FoodBoss, said.
FoodBoss uses an aggregator model to collect data on popular food delivery services, which includes available restaurants, best deals, delivery times, menus and real-time surge pricing. The app can compare Postmates, Uber Eats, Delivery.com, Caviar and EatStreet in more than 50 cities. FoodBoss is seeing an increase in contactless delivery options because of the coronavirus. Consumers want deliveries to be left at their doors without having contact with the drivers.
According to the data from FoodBoss, higher demand for food delivery initially led to a surge in pricing. "There was some surge pricing last week, but that has dramatically shifted to fees that are more reasonable across the board. From March 12 to March 18, we saw food delivery fees were 16.3% higher compared to the first week of February," DiBenedetto said.
Some food delivery apps have responded to the surge by eliminating fees. For example, Uber Eats stopped charging a delivery fee on orders from local restaurants in the United States and Canada. Consumers are not the only ones benefiting from the lack of fees. Grubhub is not collecting commission fees from restaurants temporarily, which it states provides restaurants a relief of $100 million.
"Companies understand the difficult situation people are in right now and want to help instead of actively looking for maximum profit. There has been a sense of togetherness by all the parties involved — the consumers, restaurants and apps — to make sure food delivery is more accessible," DiBenedetto pointed out.
A food delivery worker on a bicycle in New York. Photographer: Demetrius Freeman/Bloomberg
There has also been an increase in hiring across the country as companies scramble to find more delivery drivers and other staff. Amazon is hiring 100,000 workers and increasing wages from $15 per hour to $17 per hour. Domino’s Pizza wants to hire 10,000 employees to help delivery operations, and Walmart plans to add 150,000 new workers.
DiBenedetto thinks there may be some positive long-term impact on restaurants. "I genuinely believe everyone is focused on the current situation, and how we can all help. With that being said, some of the aid delivery services are offering by waiving restaurant fees is likely to result in delivery service expanding as new restaurants come on board. To maintain the partnerships built with restaurants, apps will likely have to accommodate some extension of reduced fees as the demand subsides," he said.
For now, food delivery apps are focusing on meeting the growing demand of consumers stuck in their homes and tired of eating the same thing or struggling to refill their fridges because of bare shelves in grocery stores.
