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COVID-19 Experience: Food Delivery Service Wars

Here we go again. No sooner does the Food Delivery Service Saga get over one controversy than it gets into another one. But this time, it seems that the news is potentially good – rather than bad for everybody in the loop except the greedy, multinational delivery service machines.

Brandon Grossutti - FromTo - © 2021 - Brandon Grossutti - © 2021 scoutmagazine.comBrandon Grossutti: Mastermind behind new FromTo at-cost resto food delivery service…

The weekend news wires bring word that at least one humanitarian genius in the troubled British Columbia market has come up with a new food delivery service that focuses on the ‘delivery’ side of the business rather than on profit-gouging. I could spew out column after column on how unfair, inhumane and downright mean and nasty it is that huge delivery service networks have now spread their spiders’-web empires to control not only delivery but ordering and payment control, and jacked up ‘fees’ and premiums to ridiculous, usurious, possibly ruinous heights.

Was a boon

What a boon to restaurant operators the option of using ride sharing services to deliver their wares to customers’ homes was – at first. No more worries that your flaky-kid in-house delivery guy with the embarrassingly-ugly vehicle would be late with orders or diddle around with the food. No payment issues or dealing with cash and change, or disputes over tips. It was like being sling-shotted into the 21st century!

Then, the service operators caught a bad dose of that insidious business virus the concert- and event-ticket services operators caught when they discovered they could use technology to buy up all the seats in almost any major venue for almost any event they wanted to monopolize and demand whatever premiums for their service they wanted to. Kind of like consumer credit companies charging interest rates that back-street loan sharks would be thrown into the clink for, or stadium operators charging such high rents for concession space that their operator-tenants have to charge $8 or more for plain old Hot Dogs or pathetic Nachos.

‘Resto operators vs. delivery monsters’ not the same

Sure. People have the option of not going to over-0priced events, or eating before or after the game at odd-site locations. Or not even going at all. Actually attending a big event became optional luxuries affordable by only the wealthiest patrons long before the gouging set in. And, in the case of many sporting and entertainment events, one can now usually watch from home on big screen, surround-sound media set-ups for free, or for pay-per-view fees or the ‘expense’ of having to watch ads that are really much smaller and less logistically aggravating than those involved with attending an event live.

But resto operators started out operating at paper-thin profit margins, even before the pressures of the pandemic were dropped on them. Initially, delivery services cost them less than hiring and fiddling around with the details of ‘running’ their own delivery schemes. Once hooked, and with their operating models and systems adjusted, the delivery monsters started hiking their fees as high as they could without killing their new Golden Goose. Now, to stay in business, Resto operators are back to paper-thin profit margins mad customers are getting fed u0p with the ridiculous ‘fees’ that the Resto ops have to pass on to them.

Recently, Resto ops and customers alike began complaining about ‘fees’ and ‘premiums’ from delivery services hitting 40 percent of the food tab prices or more. day-to-day food delivery is not in the same category as ticket gouging or credit card feeds. It’s part of the basic social fabric of just ‘getting along’. Everybody has to eat. More folks than ever before either can’t or don’t want to go out to get food themselves. It’s not a matter of convenience; it’s a matter of basic survival for some.

Governments have tried intervening

The provincial governments of Ontario and BC, as well as the State of California and others, have attempted to intervene in the service fee piracy game, threatening or, in some bases, actually enacting fee caps or roll-backs, hoping to force the services to back down. On the whole, it hasn’t worked. In BC, at least one service (to whom I will be nice and not name) actually promised not to keep escalating its fees if the government backed off, but reneged on its promise anyway, raising fees again.

Now, something from the other side

A group of BC business people has started a new phone/online app designed to help consumers find the cheapest food delivery service. No commissions or fees. Free to use.

FromTo is offering what it calls ‘Delivery from local restaurants at cost’: “Our friends and colleagues are small business owners and restaurateurs. Their staff and their suppliers, including Canadian farmers and fishers, have all been impacted, and we’ve lost a great many businesses already. […] We believe in a more sustainable way of doing business. Our goal is to connect our local communities with the businesses they want to support directly. During the pandemic, we’re doing delivery at cost for restaurants and our drivers are getting paid more.”

How it works…

According to the website:

“We charge zero fees to our restaurant and driver partners during the pandemic. Every order on our platform is done at cost. FromTo directly connects customers with local restaurants in their community by building a network of delivery drivers for restaurants to tap into. Our customers pay a flat fee of $6.50 on every order, which goes directly to the driver. No minimums, with a tip option to show drivers extra love. Restaurants keep 100% of the food order cost. There are no hidden fees for them and no inflated menu prices for customers.

Note: The opening line, tagged, ‘during the pandemic’ seems to indicate that there may be some kind of operating premium charged after the COVID-19 crisis passes. But everywhere else, the term ‘at cost’ reigns supreme.

My take…

This all seems perfectly viable and sensible to me. Back to the old 70s ‘co-op’ principle – and more power to it, and its members and supporters. Could be, this turns out to be the standard for future food delivery operations as resto operators adapt permanently to the sort of automation-heavy, controlled-contact, apps-based business models they are saying they want to perpetuate even after COVID-19 is, effectively, history.

One question: Are there any other areas of pandemic life to which we could apply the community/co-op principle to make life easier, cheaper and more sustainable than it currently is?

Another: Can this grassroots system be cookie-cuttered out to other communities? I don’t see any major reason why not.

Yet another: How will the big delivery conglomerates react to the proliferation of new community-based services such as FromTo?

~ Maggie J.