Four tablets from various delivery companies crowd the front counter of Proposition Chicken in San Francisco, each calling out with its own ring when an order arrives.
When there is a "ping", a cashier finds the right tablet and then retypes the order into the restaurant’s own system, which tells the kitchen to start cooking.
“It’s a dance up there,” said the co-owner Maxwell Cohen. “It takes a lot of training and some getting used to, juggling the orders coming in from the various iPads, the customers in line and the phone ringing.”
Mr Cohen’s “juggling” reflects a challenge for the burgeoning food delivery industry, a group of independent companies including Grubhub, UberEATS and DoorDash. While hungry consumers can find and order a meal in a single click, delivery technology can complicate work inside restaurants and some restaurant owners are slimming down their counters in response.
On-demand food delivery has exploded in the last few years, with more than three dozen start-ups getting initial funding since 2011, according to the data firm CB Insights. US restaurants saw US$16.5 billion of delivery sales in the year ending June 2017, and non-pizza delivery traffic was up 33 per cent in 2015 versus 2012, according to the NPD Group/CREST.
Mr Cohen likes the extra sales, which account for about 10 to 15 per cent of business. But he will forego outside delivery at a new location opening in nearby Oakland. In-house orders are more profitable and less of a headache, given commissions restaurateurs say reach 10 to 30 per cent of an order, plus the need for extra staff.
“The challenge with delivery isn’t just delivery itself,” said Brendan Witcher, an analyst with Forrester. “[It’s] about being able to have the restaurant say 'I don’t know how we ever did business before this service.’”
_______________
Read more:
Harnessing the power of partnerships in a disruptive world
The rally against cash might not be in our best interests
Amazon wins regulatory and shareholder approval for Whole Foods deal
_______________
Brian Reccow, a partner at Presidio Pizza Company in San Francisco, said he plans to “cull the herd” of delivery tablets on the restaurant’s counter. Since costs have risen along with sales, he does not see a profit boost from the deliveries, just better publicity.
Venture investors poured $2.5bn into on-demand delivery companies last year, according to a Reuters analysis. But investor enthusiasm has waned and the market has continued to consolidate as smaller players are acquired or shut down, according to CB Insights.
Brook Porter, a partner with venture capital group G2VP, a spin-off of the Silicon Valley investment firm Kleiner Perkins Caufield & Byers, said that delivery companies should focus on a type of food or part of the market to distinguish themselves.
“Or,” Mr Porter said, “you need to have some substantial technology advantage that gives you a lower cost to operate and to deliver.”
Grubhub and its Seamless unit accounted for more than half of the top companies’ delivery sales in the fourth quarter of 2016, according to the market analytics firm 1010data. Eat24, which Grubhub is buying, Uber Technologies’ UberEATS and DoorDash follow, with UberEATS growing the fastest of the group.
The Grubhub chief operating officer Stan Chia sees the future in sending orders straight to restaurants’ computers.
NCR, a provider of point-of-sale software that restaurants use to handle orders, recently announced partnerships with Doordash and Grubhub.
An automated process is exactly what Charles Bililies, the owner of the Greek eatery Souvla in San Francisco, needed. He chose a single delivery company, Square Inc's Caviar, which brings in about a quarter of sales and sends orders directly to the kitchen.
"We had kind of gone on some first and second dates with some other delivery companies," he said. "We were actually on multiple platforms at the same time, and for us it just got to be far too cumbersome."
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
MWTC
Tickets start from Dh100 for adults and are now on sale at www.ticketmaster.ae and Virgin Megastores across the UAE. Three-day and travel packages are also available at 20 per cent discount.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
The specs
Engine: 4.0-litre flat-six
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
