Delivery: Takeout goes high tech
The 1995 cyberthriller “The Net” wanted to establish that Sandra Bullock’s character, a loner hacker, had mastered the latest technology. So it had her do something wildly futuristic: order pizza over the Internet.
More than two decades later, most Americans live in a golden age of digitally delivered food. Dozens of new companies, backed by billions of dollars of venture funding, provide food on demand. People can tap their phones to order pizza — or sushi, pho, burritos, curry and innumerable other cuisines. Home cooks can order meal kits that suit their preferred diet, be it gluten-free or paleo. Shoppers can go online to order from grocery stores and farmers’ markets, stipulating the ripeness of an avocado or the treatment of the hens that laid their eggs.
Plenty of scope for innovation in food delivery remains. Robots and drones, trucks that cook en route and to-go commissary kitchens are being tested. Chefs and entrepreneurs alike pore over data that delivery services generate on their customers’ preferences, so they can adjust menus and business plans in response to feedback.
“Fast-forward 10 years; delivery will have an even bigger impact,” said Erik Thoresen, a principal at consulting firm Technomic. “Gen Z is growing up on online ordering and immediate delivery. They will be a huge share of spending.”
Morgan Stanley has projected that the U.S. food delivery market could hit $210 billion in the future, though it did not specify a time frame. That would be seven times the current $30 billion ($11 billion of which is now done online). Technology that makes deliveries easier and cheaper will be a major reason for that increase, it said, citing “unprecedented variety, speed and convenience” offered by a new generation of companies. McKinsey expects online food delivery to grow 25 percent annually in key markets from 2015 to 2018, then taper to about 15 percent a year.
People may not care whether their fish tacos are ferried by a person, a robot or a drone as long as they arrive quickly. On-demand food companies say that more of these options will fuel their growth but they’re unlikely to confine themselves to just one method. And few experts are willing to guess what delivery method will dominate in the future.
“Our fleets will become more diverse, rich and dynamic over time as our delivery needs become more complex,” said Stanley Tang, co-founder and chief product officer of San Francisco food delivery service DoorDash, listing cars, bikes, e-bikes, self-driving cars, sidewalk robots and drones as examples. “Each has strengths and weaknesses; each is best suited to a different environment.”
The Bay Area is a hub for some breakthroughs. On the Peninsula, Starship Technologies robots deliver meals for DoorDash and Postmates, while some robots from startup Marble deliver for Eat24 in San Francisco. In Mountain View and surrounding towns, a fleet of Zume Pizza trucks prowl streets loaded with pies that are baked en route.
Recently during lunchtime, a six-wheel robot rolled up the sidewalk to the commercial real estate office where Tyler Bell works. Inside a compartment, it carried a turkey sandwich and tuna salad that he’d ordered for lunch through DoorDash.
“There are only a few moments I remember being awestruck by innovation, when it almost felt like living in the future,” Bell said. “My first Macintosh; my first iPhone; sitting in a Tesla. This was one of those moments. It was surreal.”
Starship Technologies, an Estonian company started by two Skype co-founders, has hundreds of its cooler-size robots doing daily test runs in Europe, the Bay Area and the East Coast. More than a dozen are in Redwood City, San Carlos and Sunnyvale; about the same number are in Washington, D.C. Drone food delivery hasn’t yet hit the skies, but most experts think it’s coming soon.
Aren’t robots an expensive way to ferry around $20 food orders?
Not so, said Allan Martinson, Starship chief operating officer. “Any technology becomes cheaper and more powerful over time,” he said. For that matter, the robots aren’t that pricey, he said, closer to a Roomba vacuum than a selfdriving car. (Of course, Roombas are about $500, while self-driving cars might one day sell for $100,000, so that’s a wide range.)
Such robots won’t work for all circumstances. Trundling along at pedestrian speed, they’re best suited for shorthaul trips. Starship’s tests stay within a five-block radius. A typical round trip — garage to restaurant to customer to garage — might take 45 to 60 minutes.
But Martinson said all food delivery companies say they struggle with the expense and availability of couriers, something the robots could address.
Not everyone sees fleets of R2-D2s as the future.
“Robots may add a lot of friction to the process,” said Chetan Narain, senior product manager for the UberEats delivery service, which uses Uber drivers to deliver restaurant food.
Narain sees a big selling point for restaurants in data from delivery customers who fill out surveys on their experiences. Some restaurants now use UberEats and similar services to experiment with dishes, offering new menu items only for delivery at first so they can get feedback and tweak them until customers like them.
Zume Pizza has robots helping make its pizzas, but its biggest breakthrough comes with how they get to customers. Its brightly painted “food delivery vehicles,” the size of FedEx box trucks, can carry up to 280 refrigerated pies. Each pizza can be quickly heated in on-board ovens through a patented process.
“We cook on the way to the customer so we can get food fresh out of the oven to someone’s table,” said Julia Collins, Zume co-chief executive. It also provides big savings on real estate. With no storefront, Zume is housed in a lessexpensive industrial location.
Opened last autumn in Mountain View, Zume now has six trucks on the Peninsula and plans to have 16 vehicles by the end of the year, covering all of San Mateo and Santa Clara counties.
Its bake-en-route technology could apply to all sorts of food, Collins said, most likely through working with other companies. And it wants to spread nationwide and globally.
“We started with pizza because pizza is to Zume as books were to Amazon: a ubiquitous, high-margin product to build out our fooddelivery” service, she said.
Of course, on-demand food has seen notable failures. Berkeley’s SpoonRocket and San Francisco’s Sprig, which cooked and and delivered their own meals, shut down after burning through plenty of venture capital. San Francisco’s Good Eggs grocery delivery service scaled back. Back in the dot-com era, Foster City online grocer Webvan flamed out spectacularly.
“The business models weren’t a match for consumer demand today,” Thoresen said. “But they set the tone for what will be coming next.”
The industry is watching anxiously to see what stems from Amazon’s acquisition of Whole Foods. That merger “will force all the companies to up their game and get more aggressive — and that’s a good thing,” said Danielle Gould, CEO and founder of Food & Tech Connect, which examines technology’s impact on food and agriculture.