Tech Check is a regular column on restaurant technology by Senior Editor Joe Guszkowski. It's also a newsletter.
There has never been a better time to use third-party delivery. If you’re a consumer, that is.
In recent months, the big three delivery apps—DoorDash, Uber Eats and Grubhub—have unleashed a series of perks, partnerships and promotions designed to enhance their value at a time when inflation-weary Americans are hungry for deals.
The most recent (and maybe most impressive) appeal came from DoorDash, which earlier this month announced that members of its DashPass subscription program will get free access to HBO’s Max streaming service—a total package worth $240 a year that will cost customers $96.
It was a strong response to Grubhub’s move earlier this summer to join forces with Amazon Prime, giving Prime members a new feature in restaurant delivery as well as free membership in Grubhub+ (Grubhub’s version of DashPass).
Uber Eats, meanwhile, is now available within the Instacart grocery delivery app, offering users a one-stop shop for meals.
While those partnerships seem geared toward heavy users, even the occasional delivery customer can expect to get a deal when they open the app these days.
Uber Eats, for instance, said the number of restaurant-funded discounts on its platform increased a whopping 70% year over year last quarter.
“We see very strong cooperation from merchants in using merchant-funded offers to drive their demand,” said Uber CFO Prashanth Mahendra-Rajah during an earnings call this month, according to a transcript from financial services site AlphaSense. “It is actually a very helpful way for them to address their need to attack the affordability question that folks are asking.”
DoorDash, meanwhile, said it has lowered fees for non-DashPass users by 12% over the past two years.
It’s also worth noting that the price of a subscription to DashPass, Grubhub+ and Uber’s membership tier, Uber One, has not changed since the programs were first introduced years ago. While inflation has climbed rapidly since then, customers can still get each of them for $9.99 a month.
Overall, the price of having food delivered is still going to cost significantly more than it would to get it at the restaurant. But the onslaught of deals and partnerships may be helping delivery apps improve their value perception with consumers.
“We’re pretty pleased with the progress we've made on overall affordability, which is continuing to drive the growth that you're seeing in the business,” DoorDash CFO Ravi Inukonda said during an earnings call this month, according to an AlphaSense transcript.
Indeed, while restaurants have generally struggled with traffic this year as customers react to high menu prices, DoorDash and Uber Eats continue to rack up year-over-year order growth despite the expense.
Left on the sidelines of this brisk exchange are restaurants themselves, which have had little to no luck getting the apps to relent on issues like commissions and data sharing. Operators are also frustrated with chargebacks, batched orders and those pesky ranking algorithms that the apps have been unwilling to demystify.
And while the flood of promotions should theoretically help drive more business to restaurants, those orders are ultimately less desirable because of the commissions and the lack of useful data. Plus, restaurants are footing the bill for many of those in-app discounts.
At the end of the day, third-party delivery apps are always going to defer to the end user. But it would be nice to see them shift some of that generosity toward restaurants. They could use a break too.