- Grubhub CEO Matt Maloney told MarketWatch that his company has received "10 to 15 times" its usual restaurant leads during the coronavirus outbreak, which has led to "four to five more new restaurant go-lives" compared to its previous record-breaking day.
- This increase in delivery comes as a growing number of states have banned dine-in service to help fight the spread of coronavirus. According to Restaurant Business, that number is now close to 40. Restaurant giants like Starbucks, McDonald's, Chick-fil-A and Yum Brands began shifting to an off-premise-only model last week when the bans started going into place.
- One foodservice delivery driver told MarketWatch that his earnings doubled on the day restaurants in Denver closed due to the coronavirus.
Fast food concepts are better suited to shift to off-premise models, as 70% of sales already occur at the drive-thru. But the closure of dine-in services expanding throughout the country has devastated sit-down casual and fine dining concepts. Darden Restaurants, for example, experienced a same-store sales decline of almost 21% for the week ending March 15. From March 16 through March 18, same-store sales were down 60%.
This has led to a sprint to implement delivery-friendly models as soon as possible to stop some of the bleeding. Last week, Chipotle launched a national delivery partnership with Uber Eats, for example, which includes “no-contact” delivery options.
Darden, which has been reluctant to partner with third-party aggregates for the service, has even changed its tune, with CEO Gene Lee stating that "everything is on the table." It's not a surprising correlation to see delivery ramp up across segments and across the country as the pandemic proliferates and as social distancing remains one of a few real solutions at this point. Because of this, analysts believe at least a small share of lost dine-in business in the industry will be recovered through new delivery/pick-up customers.
Further, Maloney said the strong delivery market could benefit those looking to replace lost income. That number of people is expected to be high. The National Restaurant Association last week predicted that the industry could lose between 5 million to 7 million jobs over the next three months.
This confluence of challenges has led to a number of changes within the food delivery space. Firstly, delivery companies are scrambling to ensure their drivers are safe, particularly as their orders increase and they’re exposed to more people. Uber Eats, for example, started providing drivers with sanitation products and updated its sick policy to provide up to two weeks' financial assistance to drivers who are diagnosed with COVID-19 or placed in quarantine by public health authorities. Postmates says it's also offering to help with medical expenses for drivers who meet certain requirements.
And since delivery companies wouldn't have business without their restaurant partners, most of whom are deeply struggling right now, they are making some concessions to help their partners during the outbreak.
Grubhub, for example, has delayed fee collections "for the foreseeable future," Maloney said. Uber Eats has waived commission fees for independent restaurant partners, while Postmates has launched a pilot program for small businesses that temporarily waives commission fees for restaurants in the San Francisco Bay Area. DoorDash has also announced zero commissions for 30 days for independent restaurants, and no commission fees on pickup orders for existing restaurant partners.
That's not to say this is how it's always going to be, however. Once life gets back to normal, delivery companies are likely to turn to their commissions to help them generate elusive profits. Maloney also added that restaurants can't survive on just delivery alone — the delivery industry is simply not big enough.