![]() “GrubHub and Seamless take a 13.5% cut of their average delivery order.” Quartz, 1 Mar. GrubHub website, “Investors: What Is GrubHub?” Accessed 4 Mar. “Online takeout companies GrubHub and Seamless to merge.” Reuters. Seamless website, “About Me.” Accessed 4 Mar. “How delivery apps may put your favorite restaurant out of business.” The New Yorker, 3 Feb. “Millennials’ eating habits are wildly different from their parents’ - and the food industry has to face urgent consequences.” Business Insider, 4 Mar. More and more, these platforms have a “tendency to metastasize from transaction enablers to, with sufficient success, participation gatekeepers”. These tensions in the restaurant industry echo tensions rising in other platform-dominated spaces, such as in the ride-sharing or home rental space. A restaurant representative said, “sometimes it seems like we’re making food to make Seamless profitable,” but “it’s really becoming a bulk part of our business, so it’s not something we can cut”. However, since the cross-side network effects can be quite strong – more users attract more restaurants – restaurants cannot afford to stay off of a platform like Seamless. Mulberry & Vine, a restaurant in NYC, estimated that 20-40% of revenue goes to platforms like Seamless and “that in the past three years over-all profit margin has shrunk by a third, and that the only obvious contributing factor is the shift toward delivery.” Seamless exerts additional power by favoring restaurants based on the commission they pay restaurants can appear higher in search results by paying a higher fee. Seamless collects a fee, averaging 13.5%, from restaurants for each transaction, but restaurants must also staff couriers to carry out the deliveries. Pathways to a Just Digital Future Watch this tech inequality series featuring scholars, practitioners, & activistsĪs Seamless has grown and scaled, the way it captures value has proven challenging to the restaurant side of the platform. In addition, it can be a marketing tool to attract new customers. The platform lowers barriers for customers to purchase from restaurants they might not have reached in the past. For the same reasons (order precision, clear instructions), they can improve the customer experience. With the online platform, customers could access a greater variety of restaurants beyond their immediate neighborhoods, improve order precision via online menus and written instructions, and select their preferred payment method.įor restaurants, Seamless creates value by expanding their customer base to new potential customers. Customers had to call and speak on the phone with restaurants, which could lead to miscommunication or order errors, and they had to hope that they had enough cash on hand to pay and tip. The experience of placing an order could also be painful, from placing the order to making payment. Prior to Seamless, customers depended on drawers full of paper menus or knowledge of local restaurants their options were limited. įocusing on the direct-to-consumer business (it is also offered to businesses), Seamless creates value for customers by aggregating multiple restaurants’ menus into a single place. Their parent company, GrubHub, owns a portfolio or brands encompassing over 80,000 takeout restaurants in 1,600 U.S. As of May 2013, Seamless worked with 12,000 restaurants in 40 cities. Customers select their food choices from an online menu, pay via the platform, and then receive their food at a designated location. Launched in 1999, Seamless aggregates menus from various local restaurants onto a single platform, which can be accessed by web browser or mobile app. ![]() Now part of GrubHub’s portfolio of brands, Seamless was one of the earliest platforms in the space. Analysts believe this could rise to as high as 40%. restaurant sales was comprised of delivery transactions. This has made room for a rise in meal delivery services, among which Seamless has established itself as a major player. They increasingly value convenience over other factors when making meal choices, spending less time on food prep than any other generation. ![]() Department of Agriculture reported that millennials (those born between 1981 to mid-2000s) are most likely to eat in restaurants and to buy prepared meals. The food industry is changing to accommodate younger generations’ eating habits. ![]()
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