Online Delivery Became a $10.2 Billion Industry, but Restaurants Still Lost

Delivery is more popular than ever, but one very crucial sector—the restaurants themselves—aren’t reaping many profits from this change in the way consumers eat. According to a report published by CNBC, consumers ordered $10.2 billion from third-party delivery services in 2018. 

It’s no secret that in modern times, convenience is king. “The consumer migrated towards having this expectation of things being at our fingertips, from other industries — the Amazon effect, you could argue, contributed to some of this,” Aaron Allen, CEO of restaurant consultancy Aaron Allen & Associates, said to CNBC.  

Because of the popularity of online ordering and delivery, the landscape of restaurants is changing—literally. Brands are reinventing the way they approach packaging to ensure food travels well, launching new store prototypes, experimenting with ghost kitchens and remodeling existing stores to adapt to rush-hour demands. CNBC stated the Chipotle was one of the restaurants which adapted to this trend by adding a second kitchen line to locations in 2016 to accommodate mobile and online orders. All of this, of course, comes at a cost to the restaurants themselves. 

Takeout-heavy restaurants such as pizza places have always relied on delivery as the bread-and-butter for their business, and third-party apps have swiped the market share right out from under them. Domino’s has notably resisted outsourcing delivery, and is instead focusing on upgrading its own in-house technology. 

In spite of their success, however, CNBC wrote that the gig-based services are struggling to turn a profit themselves. GrubHub, DoorDash and Uber have all come under fire for their nebulous classifications surrounding the employment of drivers and couriers, and CNBC stated that these platforms will only be facing more back-and-forth over employee labor rights. 

Read the full story in CNBC here.