Not a formula that builds a reliable and strong workforce. In some cases, this has led to legal challenges and protests by delivery drivers, who argue that they should be classified as employees. Many of the drivers for these services are classified as independent contractors, which means they are not entitled to benefits such as health insurance and paid time off. Instacart has instead focused on it’s new Instacart Platform a suite of services that offers retailers tools for warehouse fulfillment, ad support and consumer insights.Īnother issue that confronts the food delivery industry is about worker classification. Instacart, the leader in grocery delivery announced in January that they were “winding down” their traditional ordering and delivery services as some of their retailers shifted to fulfilling their customers orders themselves including some Kroger KR banners, Tops Friendly Markets in New York, Heinen’s in the Midwest. Grocers have taken back their online service from third parties in an effort to answer shopper complaints about the quality of the foods selected in-store and the delivery. But the problem still remains if they can deliver “better”.ĭelivery man standing at the door of the house and carrying box with groceries, talking with woman. Now, restaurants may need to evaluate and consider investing in their own delivery infrastructure, which no doubt can be costly but may be more profitable in the long run. GrubHub told Quartz it had lost $100 million in 2020 just in the US as a result of cap fees. Many cities capped the fees or commissions to deliver services to help the struggling restaurant operators to 15%, including San Francisco, Denver, Las Vegas, Silicon Valley’s San Jose and New York City, but now many of these caps have or are ending and the fees are back on the rise. In some cases, restaurants have had to raise prices or reduce portion sizes to offset the fees charged by delivery platforms. However, as the pandemic recedes, we have to wonder if this trend will continue.Ī major challenge for restaurants is that the fees associated with delivery services can eat into their profits. This has allowed them to continue operating during lockdowns and social distancing measures for sure and those that had been able to pivot to delivery have had a lifeline. ![]() ![]() The pandemic forced many restaurants to adapt to the changing times by offering delivery or takeout.
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