Online food ordering

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Food delivery workers for the Chinese company Meituan wear yellow uniforms. SZ Shen Zhen Shenzhen She Kou Shekou shop restaurant Mei Tuan Meituan food delivery worker uniform yellow August 2018 IX2.jpg
Food delivery workers for the Chinese company Meituan wear yellow uniforms.

Online food ordering is the process of ordering food, for delivery or pickup, from a website or other application. The product can be either ready-to-eat food (e.g., direct from a home-kitchen, restaurant, or a virtual restaurant) or food that has not been specially prepared for direct consumption (e.g., vegetables direct from a farm/garden, fruits, frozen meats. etc).

Contents

Online food ordering/delivery through third-party companies has emerged as a global industry, leading to a "delivery revolution." [1] From 2018 to 2021, global revenues for the online food delivery sector rose from $90 billion to $294 billion. [1]

History

The first online food order was a pizza from Pizza Hut in 1994. [2] [3]

The online food ordering market has increased in the U.S with 40 percent of U.S adults having ordered their food online once. [4] The online food ordering market includes foods prepared by restaurants, prepared by independent people, and groceries being ordered online and then picked up or delivered. [5] [6] [7]

The first online food ordering service, World Wide Waiter (now known as Waiter.com), was founded in 1995. [8] The site originally serviced only northern California, later expanding to several additional cities in the United States. [9]

By the late 2000s, major pizza chains had created their own mobile applications and started doing 20–30 percent of their business online. [10] With increased smartphone penetration, and the growth of both Uber and the sharing economy, food delivery startups started to receive more attention. In 2010, Snapfinger, who is a multi-restaurant ordering website, had a growth in their mobile food orders by 17 percent in one year. [4]

By 2015, online ordering began overtaking phone ordering. [11]

In 2015, China's online food ordering and delivery market grew from 0.15 billion yuan to 44.25 billion yuan. [12]

As of September 2016, online delivery accounted for about 3 percent of the 61 billion U.S. restaurant transactions. [13]

According to research conducted by the NDP Group in 2018, online restaurant ordering was growing 300% faster than dine-in traffic at that time. [14] The same year, MSN News reported that it had "started to become the norm" as a result of its convenience and the option to integrate payments, and speculated that "subscription delivery of prepared food could potentially spell the end of cooking at home". [15]

In a 2019 market study of restaurant delivery services, the global market for online-ordered prepared food delivery was estimated at $94 billion and is estimated to grow at just over 9 percent a year, reaching $134.5 billion in 2023. [16] The study defined the market as 1)"meals ordered online which are directly delivered by the restaurant, no matter if ordered via a platform (e.g. Delivery Hero) or a restaurant website (e.g. Domino's)"; 2) online meal orders and deliveries "both carried out by a platform" (Deliveroo, Uber Eats, e.g.); 3) "online orders that are picked up in the restaurant" by the customer. It does not include phone orders. [16]

Uber Eats delivery driver Uber Eats 806-EZV 20201010.jpg
Uber Eats delivery driver

After 2020, COVID-19 significantly boosted online food delivery usage world wide. [17]

Types

Traditional food delivery services

Traditional food delivery services have long been a part of the food industry, with local restaurants and fast-food chains offering home delivery or takeout options. [18] These services often rely on in-house or third-party delivery drivers who transport prepared meals directly from the restaurant to the customer. Dominos, Pizza Hut, and Papa John's are examples of established global brands that have been offering delivery services for decades. [19]

Restaurant-controlled

In restaurant-controlled online food ordering, the restaurants create their own website and app, or choose to hire a delivery vendor. If they choose to create their own website, they make sure to obtain software that manages the orders efficiently, meaning it has the capability to manage different orders at once. [4] When they hire a vendor, the restaurant pays for a monthly fee or percentage-based fees. The vendor covers the developmental costs. [4]

A customer can choose to have the food delivered or for pick-up/take-away. [4] The process consists of a customer choosing the restaurant of their choice, scanning the menu items, choosing an item, and finally choosing for pick-up or delivery. [12] Payment is then administered by paying with a credit card or debit card through the app or website or in cash at the restaurant when going to pickup. [4] The website and app inform the customer of the food quality, duration of food preparation, and when the food is ready for pick-up or the amount of time it will take for delivery. [12] Papa John's is one of the restaurants that created their own Papa John's system, website, and app, and do their own delivery. [20] In 2010, they redesigned their website and launched mobile apps for iPhones, iPads, iPods, Androids Phones, Blackberrys, and Windows Phones. [21]

The preexisting delivery infrastructure of these franchises paired with the online ordering system. In 2010, Papa John's International announced that its online sales had exceeded $2 billion. [20]

Independent websites

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In this case, a person cooks and offers meals or kits via their website, which are then directly sent to consumers. [5] The consumer chooses which meal and how many meals they want sent to their office or home, and pays depending on the meals or the program they are interested in. People choose to order meals from other people for different reasons: not wanting or having time to cook, wanting to eat home-cooked meals, or to lose weight by eating healthy foods. Examples of this type of service include DineWise, NutriSystem, Chef's Diet, etc. [5]

Food cooperatives

Some food cooperatives like Macomb Co-op [22] allow members to place orders of locally grown and/or produced food online and pick up and pay for their orders at a central location. [23]

Delivery platforms

The riders and drivers for nearly all independent restaurant delivery app services are independent contractors, having the flexibility to choose when they work. [24] In Australia, specifically riders for the food app of Foodora, consider themselves employees because they sometimes work full time hours, are required to wear uniforms, and run shift system. [24]

However, food delivery riders and drivers usually do not receive any insurance coverage, protective gear, or sick pay as independent contractors, [25] which have led to some asking for improved safety standards. [26] In response, Deliveroo gave riders a helmet with a GoPro camera to record any problems they may face, specifically with criminals. The riders have the opportunity to raise safety concerns about delivery areas in the app. [25]

Meal-Kit delivery services

Another segment within the global food delivery industry is meal-kit delivery services, which provide customers with pre-portioned ingredients and recipes to prepare meals at home. Meal-kit delivery services such as Blue Apron, HelloFresh, and Sun Basket have gained popularity, particularly among health-conscious consumers and those with busy lifestyles. These services offer the convenience of food delivery combined with the experience of home cooking, catering to a growing demand for healthy and personalized meal options. [27] [28]

Virtual restaurants

A virtual restaurant in Columbus, Ohio in 2020 Ghost restaurant.jpg
A virtual restaurant in Columbus, Ohio in 2020

As the food delivery sector has grown, businesses have turned to delivery-only virtual restaurants, also known as ghost kitchens, to fill the need for inexpensive kitchen space to handle the increased volume. [29] A ghost kitchen site will be purpose-built to be delivery-only and have separate areas of stoves, refrigeration and storage space to accommodate food preparation teams of several different restaurants. [30] As they are often located in less densely populated areas of a city, they also have parking areas for the delivery vehicles. Companies providing this service are often subsidiaries of the delivery companies. Ghost kitchens also allow for the creation of virtual restaurant brands—restaurants that exist only online, with no brick-and-mortar presence. [29] The ghost kitchen has also gradually developed into a shared space ghost kitchen. They simultaneously share the same space for multiple ghost kitchens and then equip them with complete tableware and space. [31]

See also

Related Research Articles

<span class="mw-page-title-main">Take-out</span> Prepared food purchased with the intent to eat elsewhere

Take-out or takeout is a prepared meal or other food items, purchased at a restaurant or fast food outlet with the intent to eat elsewhere. A concept found in many ancient cultures, take-out food is common worldwide, with a number of different cuisines and dishes on offer.

<span class="mw-page-title-main">Pizza delivery</span> Service in which a pizzeria delivers pizza to a customer

Pizza delivery is a service in which a pizzeria or pizza chain delivers a pizza to a customer. An order is typically made either by telephone or over the internet, in which the customer can request pizza type and size, and other items to be delivered with it, commonly including soft drinks. Pizzas may be delivered in cardboard pizza boxes or delivery bags, and deliveries are made with either an automobile, motorized scooter or bicycle. Customers can, depending on the provider, choose to pay online, or in person, with cash, credit card, debit card or other means. A delivery fee is sometimes charged, although free delivery is also common.

<span class="mw-page-title-main">Room service</span> Hotel service

Room service or in-room dining is a hotel service enabling guests to choose items of food and drink for delivery to their hotel room for consumption. Room service is organized as a subdivision within the food and beverage department of high-end hotel and resort properties. It is uncommon for room service to be offered in hotels that are not high-end, or in motels. Room service may also be provided for guests on cruise ships. Room service may be provided on a 24-hour basis or limited to late night hours only. Due to the cost of customized orders and delivery of room service, prices charged to the patron are typically much higher than in the hotel's restaurant or tuck shop, and a gratuity is expected in some regions.

An online grocer is a supermarket or grocery store that allows ordering via websites or mobile apps. The order can either be collected by the customer or delivered to the customer by drivers engaged by the grocer, a food delivery service, or by delivery drones and robots.

<span class="mw-page-title-main">Delivery Hero</span> Food delivery company based in Berlin

Delivery Hero SE is a German multinational online food ordering and food delivery company based in Berlin, Germany. Founded in 2011, the company operates in 70+ countries internationally in Europe, Asia, Africa, Latin and South America, and the Middle East, and partners with 500,000+ restaurants. Delivery Hero has increasingly branched out beyond food delivery, and is a leading player in the emerging category of quick commerce, which delivers small batch orders in under an hour.

EatStreet Inc. is an American online food ordering service that acts as a centralized marketplace, where diners can order delivery and takeout from restaurants in their area. Founded in 2010 in Madison, Wisconsin, the company has expanded to over 15,000 restaurants in over 150 markets nationwide. In addition to the online ordering platform, EatStreet also offers restaurants custom websites, mobile apps, Facebook ordering, and digital marketing services. As of August of 2023, EatStreet no longer employs W2 drivers to deliver customer orders. They now contract with multiple third-party delivery services to complete deliveries nationwide.

Grubhub Inc. is an American online and mobile prepared food ordering and delivery platform based in Chicago, Illinois.

<span class="mw-page-title-main">Fast food in China</span> Overview of fast food in the Peoples Republic of China

Western-style fast food in mainland China is a fairly recent phenomenon, with Kentucky Fried Chicken (KFC) establishing its first Beijing restaurant in November 1987. This location was met with unprecedented success, and served as a model for many local Chinese restaurants that followed it.

Foodpanda is a Singaporean online food and grocery delivery platform owned by Berlin-based Delivery Hero. Foodpanda operates as the lead brand for Delivery Hero in Asia, with its headquarters in Singapore. It is currently the largest food and grocery delivery platform in Asia, outside of China, operating in 11 markets across Asia.

<span class="mw-page-title-main">Menulog</span> Australian and New Zealand online food ordering app

Menulog Pty. Ltd. is an Australian online food and beverage ordering app and delivery service platform, headquartered and founded in Sydney in 2006. It was bought in 2015 by Danish-based Just Eat, which was subsequently folded into Dutch-based Just Eat Takeaway.com in 2020, following Just Eat's acquisition.

Postmates Inc. is an American food delivery service, founded in 2011, and acquired by Uber in 2020. It offers local delivery of restaurant-prepared meals and other goods. It is headquartered in San Francisco, California.

DoorDash, Inc. is an American company operating online food ordering and food delivery. It trades under the symbol DASH. With a 56% market share, DoorDash is the largest food delivery platform in the United States. It also has a 60% market share in the convenience delivery category. As of December 31, 2020, the platform was used by 450,000 merchants, 20,000,000 consumers, and one million delivery couriers.

<span class="mw-page-title-main">Food delivery</span> Courier service in which food is delivered to a customer

Food delivery is a courier service in which a restaurant, store, or independent food-delivery company delivers food to a customer. An order is typically made either by telephone, through the supplier's website or mobile app, or through a third party food ordering service. The delivered items can include entrees, sides, drinks, desserts, or grocery items and are typically delivered in boxes or bags. The delivery person will normally drive a car, but in bigger cities where homes and restaurants are closer together, they may use bikes or motorized scooters.

Deliveroo is a British online food delivery company founded by Will Shu and Greg Orlowski in 2013 in London, England. It operates in the United Kingdom, France, Belgium, Ireland, Italy, Singapore, Hong Kong, the United Arab Emirates, Kuwait, and Qatar. It formerly operated in Germany, Taiwan, Spain, the Netherlands, and Australia. Its subsidiary operation, Deliveroo Editions operates dark kitchens for the preparation of delivery-only meals.

Uber Eats is an online food ordering and delivery platform launched by the company Uber in 2014. The meals are delivered by couriers using various methods, including cars, scooters, bikes, or on foot. It is operational in over 6,000 cities in 45 countries as of 2021.

Foodora is an online food delivery brand owned by Delivery Hero. It was founded in Munich, Germany, and operates in Austria, Sweden, Norway, Finland, Hungary and the Czech Republic.

Ele.me is the online food delivery and local life service platform of Alibaba Group. Founded in 2008, it is now the second largest online food delivery service platform in China.

<span class="mw-page-title-main">Virtual restaurant</span> Delivery-only restaurant

A virtual restaurant, also known as a ghost kitchen, cloud kitchen or dark kitchen, is a food service business that serves customers exclusively by delivery and pick-up based on phone and online ordering. Virtual restaurants are stand-alone businesses that either operate out of an existing restaurant's kitchen or from a separate kitchen set-up away from a restaurant. By not having a full-service restaurant with a storefront and dining room, virtual restaurants can economize by occupying cheaper real estate. The reduced space lowers overall overhead and operational costs, thus yielding higher profit margins, as the price of the food provided is typically not changed. The virtual restaurant's single kitchen format allows for multiple brands to share kitchen space.

<span class="mw-page-title-main">Slice (app)</span> Online food ordering platform for independent pizzerias

Slice is an online food ordering platform for independent pizzerias. It allows pizzeria owners to offer their products to their customers using a mobile-optimized website and their customers can place orders through the Slice app and social media channels. The company claims their platform is used by 9,000 pizzerias in 2,500 towns and cities in the US. It also claims to have processed more than $100 million worth of deliveries in 2017 and to have filled a total of over 12 million orders since 2010.

Swiggy is an Indian online food ordering and delivery company. Founded in 2014, Swiggy is headquartered in Bangalore and operates in more than 580 Indian cities, as of July 2023. Besides food delivery, the platform also provides quick commerce services under the name Swiggy Instamart, and same-day package deliveries with Swiggy Genie.

References

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