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For many people – and restaurants – food distribution was a lifeline when personal eating felt too dangerous or shut down during a pandemic. This habit seems to be here to stay and now everyone involved is trying to figure out how to make the distribution business work for them.
My colleague Kate Conger wrote on Friday about the sustainability of food distribution as the coronavirus pandemic is easing in the United States. She talked to me about how restaurants and app companies like Uber Eats and DoorDash are rethinking post-pandemic home delivery and addressing grievances, including the fees and complications that restaurants and some dinners list.
Shira: Many restaurants around the US are saying that people are like that packing their dining rooms BACK AND that restaurant delivery orders have not dropped much from pandemic levels. How can both happen?
Kate: It is clear that many people found these delivery apps useful during the pandemic and are willing to use them even if it costs more. I hesitate to predict whether the pandemic behavior will last forever, but I think the DoorDash executive I interviewed is right: it is often difficult for people to get back from activities they find appropriate.
What do restaurants think about the possibility of distribution applications being a permanent part of their business?
It is a mixture. There are people like May Seto, a restaurant owner who restored her hotel kitchen to make pizza customers can only order for pick-up or through delivery apps. She believes submission is here to stay and she is modifying her business to accommodate it. Other restaurant owners can’t wait to call back on delivery because they hate the costs and hassle.
And there are people in the restaurant industry who are in the middle. They believe distribution can be lucrative and important, but some are lobbying for changes to make application services more sustainable for them, such as the tariff limits that application companies require.
Have any of these concerns been addressed by distribution app companies?
In some cases, yes, and politicians have intervened to force change, too. DoorDash is now giving restaurants more payment options. Instead of receiving up to 30 percent or more of a restaurant’s sales, the restaurant may pay 15 percent just for distribution and then pay more for extras as it appears higher in app search results.
San Francisco imposed a permanent tariff on tariffs that distribution apps can charge restaurants and other cities set temporary limits during the pandemic. Some restaurant owners are worried that the math will not work for them if those fees return to previous levels.
There are restaurant owners, delivery couriers and dinners who have big restrictions on food delivery apps. And application companies are mostly mostly non-profit. Do you see these as temporary issues or is there something fundamentally wrong with food distribution?
Pain and also exchanges of comfort are increasing. Job hunters may find aspects of submission work unattractive, but it is also a position they can easily register and start right away. Dinners may not like that a meal delivered is not as fresh as the ones they would get at the restaurant and costs more, but this is an exchange that many people are willing to make to get food on the table. Many restaurants over the past year needed distribution when their dinner businesses shrank, even if there were aspects of it that they did not like.
Can restaurants be an attractive place for self-catering even when you empty your delivery meals? Grocery stores are struggling with it that dual task.
It is not always easy. The ability to make both delivery and dinner depends somewhat on the physical space of a restaurant. For restaurants with small dining rooms, it can be disruptive to have a delivery courier coming in the door every few minutes in the space where people are eating. But I have also talked to restaurants that have more space and can devote a counter to delivery orders and also have ample parking spaces for both personal customers and couriers.
Why DoorDash and Uber are expanding into distributing all sorts of things like groceries, alcohol and convenience stores? Is it an acceptance that it is difficult to make food distribution profitable or sustainable?
That’s a good question. The restaurant business has no high profit margins. This leaves little room for fluctuation when the money for a meal order is split between a restaurant, a delivery courier and the enterprise undertaking.
Delivering more types of products can soften app companies if customers pull away from restaurant delivery. And it is also a way to try to generate higher priced orders. If you order dinner from DoorDash and touch some items from 7-Eleven, then you spend more and there is more chance that everyone involved will get a profit.
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Before we go
An unusual level of turnover on Amazon: On Monday, Jeff Bezos will officially step down as Amazon chief executive. My colleague Karen Weise writes that the company has experienced an exodus of high-level executives in the last 18 months. Maybe this is what happens when companies like Amazon and Google become so big and so rich?
More reading: Check out Karen and Dai Wakabayashi ‘s February article about Amazon’ s next CEO, Andy Jassy.
I will never look at gift cards the same way: A Microsoft engineer found a computer problem that allowed him to steal Xbox gift cards worth more than $ 10 million. He then exchanged them for Bitcoin and lived a luxurious life with the money. Bloomberg News explains the whole caper and how he was caught.
Do not curse in your headphones: If you own wireless headphones, you may have been irritated when they did not connect properly to your computer or other gizmos. Lauren Dragan from Wirecutter, The New York Times product recommendation page, explains why and how to address the issue.
Hugs for that
It’s Friday. Almost is almost a holiday weekend. Please enjoy Muffin enthusiastically paddling for dog (or puppy).
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