Host 1: The ‘uberification’ of food delivery is a crowded market, and entrepreneurs are getting increasingly creative. With the push of a button you can order beer, get a freshly baked cookie delivered in under 20 minutes, or score some pot.
Host 2: With the glut of delivery and on-demand apps, not all of them are going to make it. Chava Gourarie reports on what on-demand apps are doing to stay ahead of the curve.
Delivery startups keep starting up, and getting funded. In the last month alone, 3 food delivery companies – DoorDash, Onfleet, and Sprig – raised $87 million dollars, in venture capital. Big players like Amazon, Google, Uber and Starucks are also getting in the game.
Delivery apps offer a solution to a problem you may not have known you had. Like Drizly, which was one of the first apps to offer alcohol delivery. Nick Rellas, Drizly’s CEO says it all started when he and his friends were in college in Boston.
RELLAS: This is back in 2010, 2011, it was a late night, empty fridge, and I sent Justin, my co-founder, a text message and I said why can’t get you alcohol delivered like an uber car?
Why indeed? Rellas and his friends went to find out.
RELLAS: The first thing we did is walked into liquor stores and we pitched them the idea and we asked them their thoughts and overwhelmingly in boston there was a negative reception. and they’re a lot of reasons for that.
The problem was fake IDs. Liquor stores can lose their license if they sell to someone who is under age. For their idea to work, Rellas and his team found a way for technology to play nicely with regulators, lawyers, and entrenched business practice.
RELLAS: We partner with a company that’s considered the gold standard of ID verification. We took their system and made it mobile. It’s a system that looks into the forensic features of an ID. it’s gonna make sure your ID is real, it’s gonna make sure it’s not expired, and that you’re over 21
Today, they’ve expanded to 14 cities.
Delivery apps like Drizly are middlemen. They connect customers with restaurants and messengers. A lot of that relies on data.
Companies like Delivery.com has data on restaurants – their locations, hours, menu items, prices etc. That allows customers to filter by location, rating and all the other features we now expect.
Tim O’MALLEY, the VP of technology at Delivery.com says they use an algorithm to recommend dishes to customers.
O’MALLEY: obviously we store the contents of users orders and we can tell what dishes are popular based off those orders
For most people, popular just means what’s ordered the most often but
O’MALLEY: we look at what users tend to order and reorder again.
So they can discover new dishes. For example…
O’MALLEY: pad thai is going go be a popular dish at any thai restaurant because a lot of people order pad thai
Because it’s a go-to dish. But
O’MALLEY: you may not know that this thai restaurant has this other dish
… that people who go there often love.
These recommendation algorithms are useful because established apps like Seamless give so much choice, that it can be hard to choose.
Caspia Schwartz is a Barnard student. She orders food in with her boyfriend on Monday nights.
SCHWARTZ: we like put on a movie, order the food, watch the movie until the food comes, then eat the food while we finish the movie, that’s like a routine of ours.
Schwartz says she likes to use Seamless, because of its filters.
SCHWARTZ: I filter by best or highest reviewed or pick from one of them. it’s better to filter through that then just find sushi places, or Mexican because there’s so many places.
Delivery.com makes their data available for free with something called an API. They want other appmakers to use their data, and their infrastructure, to build their own apps.
Bask is a startup that uses the API.
O’Malley: People are trying to eat healthy, so this company GoBask has tried to kind of tackle that challenge. Given all this data, what are the healthiest dishes?
Bask will also recommend foods for specific diets, say paleo, or vegan, or vegetarian.
Delivery.com benefits from this arrangement because when apps like ‘Bask’ use their infrastructure, they get a cut of the profits.
Other companies like Seamless and Postmates also make their data free. They all want to be the mothership of specialty delivery apps, with a network of apps that depend on them, so they become indispensable to the industry.
Right now, there’s probably some college kids figuring out how to turn their laziness into a startup. But now, they better have some technological mutation that gives them an advantage over the competition.
Correction: The VP of Technology at delivery.com quoted in the radio segment is introduced as Tim O’Reilly. The correct name is Tim O’Malley.