Restaurant Megatrends 2018: Logistics Complicate Ambitious Delivery Algorithms

We’ve just released our first annual restaurant industry trends forecast, Skift Megatrends 2018. You can read about each of the trends on Skift Table as well as download a copy of our magazine here.

Silicon Valley’s ethos of disruption continues to creep into every facet of our lives but they slow down a bit when challenged by real-life logistics. All the algorithms in the world can’t make water boil faster in the kitchen and they won’t clear traffic during rush hour, either.

On-demand restaurant delivery has become an industry all its own, with companies feverishly developing technology that optimizes every part of the operation — every part they can control, that is.

“This is a complicated equation,” said DoorDash chief operating officer, Chris Payne, of the logistics required to efficiently deliver a made-to-order meal in an appropriate time frame while dealing with all of the complexities of getting from point A to B in the real world.

Balancing Expectations and Reality

All of the delivery services use real-time mapping technology to determine delivery times, and as those applications improve, so will a service’s ability to quite literally deliver. Our expectations around food delivery are based on three main factors: speed, efficiency, and transparency. Often, two of the three will do: if it’s not going to be fast, delivery service, you better tell me why. Or, perhaps spare me the details of delivery as long as you get it to my door quickly.

Domino’s has used this model for years. Its pizza tracker provides information to customers about the people responsible for cooking and then delivering their pizza. But as the company found out a few months ago, when customers learn that the tracker isn’t telling them the truth — say, a different person delivers the order than is reported in the app — they feel betrayed. Of course, this really becomes an issue if the order is late, more proof of the speed-efficiency-transparency triangle.

“We focus  maniacally on trying to be fast but on time,” said Payne. “There’s definitely a tradeoff. If you can get it there in 20 mins that’s great, 30 is great. A 45 minute range is starting to become too long, and people don’t like late.” Though at higher traffic times, he said, DoorDash’s promise goes up to account for a realistic time estimate.

Break It Down

One way to combat the messy unknowns of real life: manage every facet of the process as best you can. Grubhub COO Stan Chia explained how his company thinks about the process. “We decompose the lifecycle of every one of our orders. We know when you placed it, we know how long it took a restaurant to confirm it, and then we break down all the components. How long does [the driver] spend looking for parking? How long do they spend waiting at the restaurant? How long do they spend waiting at the delivery location?” They also pay attention to location-specific nuances, since deliveries in cities to businesses or large apartment buildings have their own unique challenges. “How long does [the driver] spend going to a concierge? How long do they spend going up? We have all of that completely broken out into data.”

With all of that information, Chia explained, Grubhub can fine-tune any expectation they set with a customer “such that you win as a diner, the restaurant feels really good about that, and then the delivery service providers also get a good win out of it.”

Last summer, Uber Eats unveiled an updated restaurant-facing product that included several updates aimed to help restaurateurs alleviate pain points in the process, including more efficient communication with customers and better association between specific orders and the couriers who arrive to pick them up.

Traffic! [Shakes Fist]

Unfortunately for delivery drivers and the hungry masses whom they serve, traffic is getting worse. In San Francisco, ride-sharing companies like Uber account for 20 percent of weekday traffic. (The study didn’t break out food delivery, but given the overlap here, we’ll assume some level of correlation.) In New York City, the average driving speed dropped to 8.1 miles per hour, and Governor Andrew Cuomo has recently introduced the idea of tolls for entering busy areas of Manhattan during prime weekday hours in an effort to reduce gridlock. And it’s not just cars that have a rough go; New York has a ban on riding electric bikes in the city for safety reasons, as their speed can quickly and quietly reach 20 mph with little warning to unsuspecting pedestrians who might step off the curb into the path of a fast-moving bicycle.

Even the robots have it rough. In San Francisco, where several companies have piloted autonomous delivery, regulators have slapped restrictions on the new technology. Instead of actually delivering food in high-traffic areas, the sidewalk robots are only able to operate in certain, often industrial, areas, and solely for research purposes. San Francisco leadership cites concerns about pedestrian safety as the reason for the crackdown.

At CES earlier this month, Pizza Hut unveiled its plan to create self-driving oven-cars, that will cook and deliver pizza to your door. While this technology is still several years (and likely a whole bunch of regulatory concerns) away from actually showing up on the roads, these vehicles actually solve for a serious pain point in delivery today: delivering hot food hot, at just the right temperature for maximum enjoyment.

In the absence of a completely new class of vehicle that cooks your dinner on its way to your house, delivery companies will do well to continue chipping away at solving each small part of the complicated equation, moving toward the perfect combination of speed, efficiency, transparency, and customer satisfaction.

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This year’s Megatrends are sponsored by our partners at AccorHotels, Allianz Worldwide Partners, Hilton Garden Inn, Intrepid Travel, onefinestay, and Upside.