Picture this. You’re a teenager in Santa Cruz in the 90s, hanging out with your friends after a long day of school. You’re all pretty hungry, so you turn on your computer and order a pizza. Pretty normal, right? Wrong. In 1994, PizzaHut launched what is widely recognized as the first online delivery service in history — PizzaNet. In fact, PizzaNet’s first sale is sometimes credited as the first online purchase ever. The website was pretty simple, but it was groundbreaking for its time. In the past, customers would have to call a restaurant to order delivery, but now you could place a pizza order right to your door in minutes from your phone. No worry of getting put on hold or being rushed to remember your family’s complicated order. Something about the self-guided act of being able to manually craft your food order was desirable to customers, and the food delivery industry has only grown since then.
Today, food delivery is a $150 billion industry, a value that has tripled in the past four years. The prominence of delivery technology is undeniable, as having the Postmates app on your phone now seems as common as having a Netflix account. As the market and technology both expand, it has become the norm to place an order through a phone app, rather than through a phone call. Some restaurants have stuck to their own individual systems of ordering, but third-party applications are where the industry’s growth can truly be witnessed. The “big four” apps of food delivery (Doordash, Postmates, Grubhub and UberEats) have cornered the market, each of them dominating different regions of the nation. Many restaurants are available on multiple apps, sparking debates about differences in service fees and taxes. Regardless of which app you prefer, it’s remarkable to look back at that first PizzaNet website and recognize the plethora of online ordering options that are now at our fingertips.
Fifteen years after the initial rise of online food delivery, the COVID-19 pandemic reached the United States. Social distancing guidelines and quarantine orders devastated the restaurant industry, as nearly every establishment in the country was forced to temporarily close their doors. As supermarket stocks of canned goods dwindled and everyone grew more fearful of surface-contamination, people turned to food delivery apps with a new frequency. At a time when we were craving human interaction more than ever, we were forced to reduce ourselves to digital food ordering. If a restaurant hadn’t set up an online delivery service yet, the pandemic forced them to. According to the Wall Street Journal, American customers placed 28 percent more food orders in December of 2021 than they did the year before. Not only that, but their orders were 18 percent larger — suggesting that ordering in was becoming less of a last-minute appetite-quencher and more of a normalized meal plan.
It turns out that for food delivery corporations, the coronavirus pandemic might have been just what they needed. A recent report by researchers Elliot S. Oblander and Daniel McCarthy states that 69 percent of the industry’s recent growth in sales was due purely to COVID-19’s impact on eating practices. Previous to 2019, food delivery sales were actually on a downturn, and companies were already looking for ways to up their profits. As restaurants rapidly closed their doors, Americans transitioned to ordering in. But is this growth sustainable? Oblander and McCarthy say it’s not, and that the return of in-person dining might eradicate the industry’s boom as quickly as it appeared. This may explain why corporations are working so hard to stay on top.
Take Uber Technologies, which leaned heavily on UberEats sales as their ride services became essentially nonexistent in the first months of the pandemic. In February, Uber announced their billion-dollar purchase of the alcohol delivery company Drizly. This came just six months after the tech conglomerate acquired Postmates, formerly one of their largest competitors. Acquisitions like these in the gig economy are particularly significant right now, as the pandemic’s unemployment rate sent workers running to independent careers like food and grocery delivery. Regardless of what happens when in-person dining is at full capacity again, the ease of quick delivery and the flexibility of gig work suggest that delivery apps are here to stay.
Although increased demand in this industry provides more economic opportunities for gig workers, there are certainly critiques to be made about our reliance on delivery apps. An Uber Newsroom blog post from July of 2020 boasts, “82 percent of restaurant operators say UberEats has been crucial to business during COVID-19 … 75 percent of operators said that they would have had to close their business if not for UberEats … 81 percent would have had to lay off staff members if not for third-party delivery.” While food delivery apps have certainly helped restaurants remain afloat throughout the pandemic, they don’t come without a cost. The most prominent apps charge commission rates between 20 to 40 percent, which can come as a huge blow to business owners who are already struggling to keep their doors open. As the pandemic has turned delivery sales into the primary source of revenue for the majority of eateries, this net difference has become more devastating. Some cities passed relief bills to cap the commission rates that companies can charge, but the apps have fought back, saying these limits will indirectly cause a smaller order volume by customers. This legal battle shows how the coronavirus has exposed our market’s weaknesses — the most dominant players tend to rise to the top regardless of turmoil, while local, independent entrepreneurs have to fight harder than ever to stay in the game.
Beyond the impact that corporate delivery services have on small business owners, there is something to be pondered about this shift towards digital ordering. As Americans, we embrace ingenuity and efficiency, celebrating when technology and commerce find new ways to collide. However, as our purchases become faster and our requests become more frequent, we often forget to look around and notice what we’ve lost. The coronavirus pandemic took away our ability to linger in a restaurant after our plates are clean, to exchange banter with a friendly waiter or to witness the familiar smile of our neighborhood barista. Our dinners are more often dropped outside the front door than served to our tables, eradicating those small moments of interaction with a stranger that are so mindlessly essential. The food delivery industry has come so far since PizzaNet that it’s almost miraculous to think of having to use dial-up internet just to order a pepperoni pie. As the world opens back up and our days become busy again, it makes sense to continue to rely on delivery apps, as long as we at least open the front door and say “Thank you.”
Sadie Groberg is a sophomore in the College of Agriculture and Life Sciences. She can be reached at [email protected].