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What are food ordering aggregators, and how are they different from online ordering platforms like ChowNow?

Chris Webb

Co-founder & CEO at ChowNow

It’s a classic “no free lunch” situation. DoorDash isn't giving anything away for free. And the thing that's somewhat laughable about that is they've spent a boatload of money—tens of millions to maybe hundreds of millions of dollars—to fight any type of regulation that would make them provide healthcare to their drivers. That’s the last thing they want to do. So if they don’t provide healthcare benefits to their own workers, why would they want to provide healthcare to restaurant workers? 

To me, it’s a nice PR move, but in reality, they're talking the talk versus walking the walk. The devil's in the details and there's just not much substance behind the headlines that I've seen.

In terms of capital lending, it makes your product stickier and really makes the underlying restaurant dependent on you. 

Because of that, it makes sense why DoorDash wants to do it. Restaurants typically have a hard time accessing capital, there’s not a venture-type community for restaurants, so it makes sense why they would want to get a loan wherever they can as long as the terms are somewhat reasonable. 

In the conversations I've had with restaurant owners, they understand that if they become solely dependent on somebody that takes 30+% of every order, it is not a good place to be in the mid-to-long term. There’s a lot of asterisks’ and fine print riddled throughout those partnerships, too.

When it comes to operating a restaurant's menu, DoorDash only has one menu that's allowed on their system. When you talk to restaurant owners, one of the things they do in an attempt to recoup some of that 30% is they usually inflate their menu prices or raise their menu prices on DoorDash and others, which means the diner is then paying a higher menu price than they would typically if they ordered direct at the restaurant.

Because DoorDash, UberEats and others only allow you to have one menu, it's then hard to also use them for your in-store menu or your direct menu price because you don’t want to necessarily show those same higher menu prices to every single diner, even the ones that order directly from you. 

A lot of restaurants use the hook, "Order directly from me for the best menu prices," so they can avoid the 30% fee. Either way, restaurants are covering the 30% costs themselves or they're having their diners pay everything, but it's not like there's multiple menus that restaurants can leverage to offer different menu prices depending on where on DoorDash you order. And so that makes it difficult to be solely reliant on one of these platforms.

Find this answer in Chris Webb, CEO of ChowNow, on the new restaurant stack
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