Welcome to text Off. I'm Kara Price here with Oz Valascian. Hey Oz, Hey Kara. So I want to tell you a story about young me.
Okay, I grew up in New York, and growing up, we lived in this small apartment and.
We had this little play kitchen for me.
Yeah, and of course like it had all the fixings, but I guess because it was a New York play kitchen, it had a telephone in it, so I was sort of playing at making dinner for my family, and my parents recall this story of me going into the kitchen and picking up the phone and calling for Chinese takeout, and.
That was you making dinner in the playhouse exactly exactly right. Are your parents embarrassed or they like, She's the apple does not fall far from the truth.
There are things that I said as a kid that they embarrassed them. That was not one of the things, because the truth is is that we mimic our parents behavior, and that's what my parents did. They ordered in So there's a reason that I've told you the story. I recently talked to Ellen Cushing, who's a staff writer at the Atlantic who primarily writes about food and food trends, and she shared with me this kind of pun intended het take.
I think that delivery and what delivery apps have done to restaurants is the single biggest change in food basically since I've been alive.
I actually have some more first hand observations about this because my stepfather owns a restaurant in London, and I watched first hand the delivery door Dash, Uber eats ification
of his restaurant. He was actually a pioneer of doing high quality restaurant food delivery for an Italian restaurant in London in the kind of mid two thousands, and then these tech platforms came along and it went from like quite a significant share of the business back down to a very small share because the margins they take are so much that it's basically not worth It's not really worth doing unless your business is totally optimized for it.
Yeah, I think it's something that if like you've ever been to a restaurant, you obviously think about. But I wanted to talk to Ellen because she demystified the sort of how and why delivery apps have overtaken the food industry and actually, like what really struck me about our conversation. Beyond the impact of delivery apps on restaurants was the impact these apps have had on.
The actual dishes that are being served to.
Us, Like delivery apps are actually influencing what we eat.
I'm very intrigued to hear what it is because I love these I love and I'm slightly horrified by these stories about how technology doesn't just meet our desires, that actually shapes them.
So I first asked Ellen for a brief overview of the history of delivery food and how we actually got to this particular moment where every restaurant on Earth seems to have a takeout option.
So let me take you back through the sands of time to the nineteen nineties when and before that the eighties and the seventies, when delivery existed. It was something that mostly existed for Chinese and pizza. When I grew up, I'm from California, but I grew up and we had like a small stack of paper menus in a drawer in our kitchen, and when we got takeout, you know, you pull them out and you're kind of like, okay,
kids who wants like Kung pao chicken? And so you would call the restaurant, they would dispatch someone who worked for the restaurant and they would bring you your food. What changed in kind of the early twenty tens was that it started being facilitated by this third party. So you had a bunch of companies pop up, all at the same time. They have since largely consolidated, but there were six or seven companies that were like, we can use phones, which everyone has now to facilitate delivery. We
will not be using employees of restaurants. We will be using contractors. This was the era when like uber was the future of everything, and so they were like, we can use this army of contractors to deliver people's food and it will theoretically be more efficient because you can pick up from a bunch of different restaurants that are on the platform and deliver to a bunch of different people, and you have this like wonderful economies of scale thing. So that is the big change.
It is very sad to me that kids will not.
Grow up with the file folder full of menus that I grew up with. That was such a You just brought me back so much just thinking about that thick stack of menus that you'd have to read That was like early reading comprehension for me totally.
And like it was such as a kid who loved food, it was such a source of fascination. Wow, there's all this food that I don't have. It's not food my parents are cooking. You know, it kind of rocked.
It's also very funny to think, like, you know how gen Z is bringing back a lot of cassettes and even like mail order stuff. Like the one thing that I don't think is coming back is like delivery menus.
Probably not. I mean I think as a society we're kind of post paper. Do what you think? Like, like I feel like we don't even get right right, You got a q comes from trees.
Yeah, the QR code is not I'll never get on board with the qure kid, but whatever.
That's taking us off track.
So in the piece, you start by talking about the moment that delivery apps were conceived by a college student named Colin Wallace. So can you talk a little bit about Colin and where his idea came from?
Yeah, and I should say Colin did not think of delivery apps. He just developed a piece of technology that help delivery apps talk to point of sale systems. The details of that are like pretty technical, but basically, this was a guy who was in engineering school at Georgia Tech and he really wanted a sandwich. He had these long lectures. He also, you know, he was going to football games and he kept feeling like, what if I could just get the food that I wanted delivered to
my seat? Because you have to go, you have to stand in line, you're missing the game, et cetera. And so it was pretty obvious. You know, he's an engineering student. This is twenty eleven. Everyone has an iPhone basically, and so he was like, I feel like there's a better way to do this, and so he developed this system that basically replaced a lot of the delivery infrastructure was done by facts at this point, which is like a sort of crazy technology to be using in twenty eleven.
So he figured out how to make it work on the phone and the rest was history. And you know, the company he started got acquired by grub hub and he became head of innovation.
So I guess the question that I have is, like.
The popularity of these apps takes off in the twenty tens, like for those of us who kind of have always adapted to the way that phones have changed things, which is my generation. You know, all of a sudden, grub Hub, door Dash, Seamless, you know, all these apps sort of explode. I'm using them all the time to do just about anything. I remember one time I broke my ankle and I ordered a wee charger from GameStop on uber on uber each.
Oh, so, like there's no question.
Now we go from you know, like very specific foods being kind of the ubiquitous takeout food to literally anything you can possibly imagine being something that you can get delivered. I mean, other than you know, Colin's invention. What is responsible for this pivot to like everything being on demand?
The answer, Kera is money. That is that's what's important here. So this is again early twenty tens. This is a moment. I was living in San Francisco in the time. There was a lot of money, There was a lot of venture capital, and you know, VC is kind of winner takes all. I would say, it is a industry that
is very much ruled by fomo. And there was this idea at the time that like, whoever wins the delivery wars will get access to a market of everyone who eats food, Right, So all of these different companies wanted to win, and all of these people that were funding these companies were just pouring money into it. And you know, this was also the era of the millennial lifestyle subsidy zerp Like, you know, money was very cheap, and so Silicon Valley was just like pumping money into all of
these companies and basically subsidizing the cost of delivery. So what you have happening is you'd open Uber Eats or whatever, and you'd get these like ads basically that are like fifty percent off your first order, or like take twenty dollars off when you order three times in a month or something, and so they're like really incentivizing people to order delivery. They're basically you know, delivery costs money because you are adding labor and computer space and all kinds
of infrastructure to a relationship. Right, You're adding another party to the relationship between the party who eats exactly. And so what was happening was was like Sandhill Road was like eating the extra cost. And so you have this brief period in the early twenty tens. Delivery is ubiquitous, it's on your phone, and it's cheap. Like sometimes it's even cheaper than like cooking for yourself or eating in
a restaurant. And so they basically, in a very short amount of time, like invented a market that did not previously exist, and then it invented the expectation that it would be cheap. And that's very powerful. That's a very good way to get people kind of like addicted to something. Right, do you remember this era, like when delivery was so cheap. I was going to say it was the promo code era. It was crazy, like every time you ordered something you could get fifty percent off.
Right, they were like please, we're.
Begging you, well, basically pay you literally, and it was because they wanted you to be loyal to grub Hub or Postmates or whatever the app was, and they wanted to lock you in.
Yeah, we were basically eating for free at that point, I remember this, And we were.
Ubering for free, and we were getting access to all of these like apps for very little money. It kind of rocked.
After the break White restaurants were forever changed by the pandemic. Stay with us, So the pandemic happens and then all of a sudden, delivery is the only way that restaurants make money, right, and then the pandemic ends and people don't want to change their behavior. And so my question for you is, like, what is the difference between promo code era to like delivery feels expensive again, but also like restaurants are empty, So what happens?
Yeah, I mean, as you say said, like the pandemic was this inflection point in that like every restaurant that had been kind of holding out on delivery for various reasons now reach this point where they were like, oh, we have to do this or bebo clothes. I remember, you know, fancy restaurants, like nice restaurants were suddenly doing delivery.
Places that had been saying, you know, our food doesn't travel well, or we think the economics don't make sense, or we have enough customers already we don't need delivery. We're now like, oh, we need delivery. And this was also a moment when, like you know, ordering delivery sort of became virtuous. It became like a victory garden, like if you want to keep a restaurant in business, you should order delivery from them.
Yes, I remember that was right, because I mean, delivery workers were essential workers at the time, and it was. It was totally. It was like a mark of supporting the economy.
Yes, exactly. It was like we're all going to get through this together. Like order a burrito, your party has change you wish to see in the world.
Yeah, exactly, exactly exactly.
But in answer to your question about like how it seems like delivery has gotten more expensive, it has. Part of that is that some municipalities have added taxes onto delivery to account for the fact that drivers need pay and delivery is kind of like one big externality that affects cities a lot, and so various places have added surcharges. But the real difference is that Silicon Valley stopped subsidizing it because these companies had to make money at some point,
and so they pulled back the subsidies slowly. And so now when you buy delivery, you're paying the true cost. You are paying the cost of the food, the cost of the labor, the cost of the overhead, the cost for grub hub or whatever to make its cut. There's a lot of people who need to get paid now, and so you, the customer are paying that.
So can you talk a little bit more about the economics of these apps like, how how does it work?
Yeah, if you are a restaurant and you sign up for a delivery service, they are basically only three Now three companies control something like ninety eight percent of the delivery market in the US. It's basically DoorDash, Uber and grub Hub is much smaller than the other two. But you sign up for one of these companies, there's different tiers, but basically you are paying them for listing you on their app. You're paying them for facilitating the delivery, You're
paying them for you know, placement within the app. If you open a delivery app, now you'll notice maybe that there's a lot of kind of like sponsored listings, or some random place will show up as like the best Indian food in all of New York City and you're like, this place has like two stars, Like how did this happen? And that's because they have paid extra. The rest of it us paid exactly, you know, And this is not
unique to delivery apps at all. Like this is true on Yea and Google Maps, and it's true kind of everywhere on the internet. But that costs money. So restaurants are basically just turning a cut over to fees that are paid to the delivery apps.
And you spoke to delivery drivers in this piece like this is not a lucrative job.
It can be, you know, you will talk to drivers who say, someone tipped me one hundred dollars on a ten dollars order of wings. It's like any service job where it can be kind of random. But no, they are not paid by the hour. They're paid by the delivery. That of course incentivizes delivery drivers to move quickly, not safely, which can be a problem in cities. They are often
driving really long distances. You know, I talked to a delivery driver who told me that he delivered like a cup of ice cream, like you know, like a single, not even like that.
I mean, some of the things that I've ordered, I can't.
I ordered a sleep like I ordered like two crispy cream doughnuts the other way.
I mean, it's just salthy, And how should you pay for them? I don't want to. And that's when you close your eyes.
That's between you and your God.
That's right, yes, and the God of my understanding for sure exactly.
You know, he drove like something like thirty miles to deliver this. He lives in a really rural area in South Carolina, and he's making like three dollars for forty minutes of work before gas and you know, maintenance and stuff, and the person who's paying like fifteen dollars. So no, it's not really a lucrative job. I think delivery companies would say these people are independent contractors. They choose how
much they work, they set their own hours. It's a great job for college students or people who need to make a little bit of money on the side, but nobody is acting like this is the first step on a career ladder that will support you and your family for the rest of your life.
Right, and yet it's very accessible and something that people, I mean, especially in cities like New York, it feels like everybody I see on a bicycle, everybody that I see in a car is somebody who's picking up something
from a restaurant to take to somebody's house. Yes, and the lines outside of restaurants are and that's that was one of the things that really stuck out to me about your article is like, is this idea of like not so much how delivery has transformed the way we get food, but it's also transformed what idea of a
restaurant is and like why does the restaurant exist? So from your point of view, like in twenty twenty five, like what is the purpose of a restaurant and has that changed on account of the explosion of delivery apps.
That's the core of this and part of the reason I wrote this story to begin with. I just kept having this experience after Lockdown ended of going into restaurants in New York City and they would be like two thirds empty on a Friday night and there would be like fifteen delivery guys in the front of the store picking up food, and it would it didn't seem that good for them or for the people working at the restaurant, and it was sort of a bad experience for me
as the diner. So yeah, I mean, I think that it often feels to me like a lot of restaurants are kind of like glorified vending machines.
Now, like that's what it feels like.
Delivery has changed the way people who run restaurants run restaurants, and it means when you build a restaurant, you are probably having way fewer tables and way more space for delivery drivers to congregate. You're having shelving for the delivery orders. Some of them have separate entrances for delivery versus din in because you know, you're essentially kind of like cramming two experiences into one where you're like in a restaurant
and a delivery driver's like backpack. It's like hitting you on the head and you're like, it's just good. And then in terms of the food, you know, I talk to restaurant tours who are like, I'm putting more brazes on my venu, I'm doing fewer like deep fried things because they just don't travel well. This is kind of the reason that everything's like a bowl. Now, if you've noticed that bowls travel really well, they're kind of like saucy and gloppy, and they're not meant to be like crunchy.
You know, anything that's crunchy is not going to travel well.
The nineteen fifties was not a time for the US EBOL or the Ploi.
Certainly not no, no, no no. But twenty twenty five, Oh.
Baby, that's really interesting.
Like that's basically what's in is like the thing that is portable.
Maybe that's the best argument against delivery is that it makes the food taste bad.
It's crazy.
Yeah, yeah, yeah, But I guess my question is is, like, if we keep going down this path and restaurants become less and less of an in person experience, like what happens to the industry. And obviously you did a lot of reporting on this, it does seem a little bit dire for restaurants, and like, is there anything that looks like course correction post pandemic?
I mean, really, where I see this going is I think it'll be like movie theaters, where like, obviously people are not gonna stop eating, people are not gonna stop like consuming, right, but like you're gonna see restaurants close. You're kind of always gonna be worried that your favorite one is going to close. They'll become rarer and rarer. It'll be this special thing that you do sometimes if you are an enthusiast. And that really freaks me out because I love restaurants.
Yeah, that's such a good analogy. I didn't think about it that way. But the movie theater sort of as restaurant. It's the ease factor that's sort of cannibalizing the thing. And if you don't care about the experience to begin with, is it something that you're going to try to preserve.
You know. I got a lot of email after this story, and a fair amount of it was from people saying like, I don't like restaurants. I don't like having to tip, I don't like sharing space with other people. I don't like waiting for my food, like basically a good riddance. And I was kind of surprised by that, just because if I have not already like tipped my hand and en augh, like I love restaurants. I love going to restaurants. So yeah, I mean, I do think some people truly
don't care. I think with movie theaters it's going to be one of these things that we kind of like miss when it's gone. But yeah, I think some people just don't like restaurants. Don't care, don't care if they go away, don't care if they change so much as to be unrecognizable.
It is such a strange phenomenon because on one end, it is so miraculous that we live in an age where you can have everything on demand, and then it's also like pretty spectacular how that thing that facilitates such an ease of sort of on demand life is the thing that might cannibalize the thing we're actually benefiting from. Again, not to sound overly romantic about it or bleeding heart, but I think we forget the cost of the thing when we're getting what we want.
Yes, and look, there's a whole apparatus that is designed to make you forget about the cost of the thing. The thing about a frictionless service is that it's designed to alide all of the effort that goes in Tech companies are really good at this, Like their whole thing is eliminating friction. You know. Amazon is kind of the
same way, like next day delivery. If you actually think about all of the like arms and legs and cars and trucks and planes and paper and plastic and warehouses that were required to get your box of paper clips to your house within twelve hours, it's astonishing. But they don't want you to think about that.
Yeah, there's success sort of rides on how little you think about it in fact. Yeah, well, Ellen, thank you so much for joining me today to talk about the personal is portable.
Thank you. This was really fun.
That's it for this week for tech stuff.
I'm care Price and I'm oz Vlasan. This episode was produced by Eliza Dennis, and Melissa Slaughter. It was executive produced by me Kara Price, Julian Nutter, and Kate Osborne for Kaleidoscope and Katrian Norvel for iHeart Podcasts. Jack Insley mixed this episode and Kyle Murdoch wrote our theme song.
Join us on Friday for the Week in Tech, where we'll run through the headlines you need to follow.
And please rate and review the show, and reach out to us at tech Stuff podcast at gmail dot com.
We want to hear from you.