COVID-19 Crisis: Online Food Delivery Challenges and Their Potential Solutions

COVID-19 Crisis: Online Food Delivery Challenges and Their Potential Solutions

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The COVID-19 pandemic has caused massive disruption to our daily lives and routines. Consumer behavior has changed drastically these days, even a simple trip to a restaurant or going out to get a bite to eat has transformed. Faced with lockdown regimes and restaurant closures, many people are turning to online food delivery services to blunt the spread of the virus.

Like every sector, the online food industry is bearing the brunt of this epidemic. Food delivery companies are making significant changes to the delivery methods in order to continue trading in these difficult times. With the majority of food courts having closed off their traditional dining room areas for the public, it’s no surprise that there has been a surge in the number of food delivery app downloads.

This sudden growth has led to a plunge in orders and on-ground challenges for various food tech biggies.

Table of Contents

Online Food Industry Statistics: Assessing Coronavirus’s Impact on Online Food Delivery Market

Statistics Depicting the Rise of Online Food Industry During COVID-19  

  • Deliveroo and GrabFood witnessed a 20% increase in daily food deliveries in May. 
  • First-quarter revenue of Uber Eats soared more than 50% to $819 million from $536 million as compared to last year.  
  • An analysis by the New York Times of data from Earnest Research, which tracked credit card and debit card purchases of nearly six million people in the United States, shows that food delivery services have seen an increase of up to 50% from the last few months
  • Many consumers in the United Kingdom have started using takeaway delivery services during the COVID-19. According to the snap poll conducted on March 18, 2020, Just Eat was the most popular operator, with 52 % of respondents saying they currently use or plan to use their service.    
  • A UK based market analyst firm recently reported that 22.5m users opted for food delivery services during the COVID-19, which represents an increase of 9.8% in the same period in 2019.
  • On May 6, Grubhub announced its financial results for the first quarter ending March 31, 2020. The company reported revenues of $363 million — a 12% increase over the same time last year.
  • Approximately 6.7 million people in the San Francisco Bay Area ordered food online in April.
  • During a March 2020 survey of consumers in the United States, 41.7 % of respondents stated that if confined to their homes during the coronavirus, they were likely to purchase restaurant food delivery online.

Online-Food-Delivery-Challenges-Stats-USA

Statistics Depicting the Decline of Restaurant Industry During COVID-19

  • Coronavirus outbreak causes full-service restaurant traffic to drop up to 89% globally.
  • The restaurant industry in the U.S. is projected to lose $240 Billion in sales in 2020 due to Coronavirus as per the recent reports by The Daily Meal.
  • U.S. consumer interest for restaurants has fallen by 54%, and for nightlife businesses by 69%,” according to Yelp’s data science editor Carl Bialik.
  • According to Statista, the year-over-year decline of seated diners in restaurants in the U.S. was a staggering 81.16 % on June 3, 2020.

Challenges Faced by Market Leaders in the Online Food Industry Amid Coronavirus

Grubhub

Chicago-based food delivery giant Grubhub experienced a steeper slowdown in food delivery orders in the US due to the severity of COVID-19 impact. Grubhub CEO Matt Maloney recently said in an interview that the company is not performing well in New York because restaurants are closed and many residents have fled from the city since the COVID-19 kicks in. With many offices closing and employees shifting to work from home models, the company saw a decrease in orders across its corporate business sector. However, the demand for takeout appeared to be recovering in some parts of the US, but that’s again not up to the mark.

How Grubhub is Dealing With the Challenges Imposed by Coronavirus?

As the number of Coronavirus cases continues to climb and national leaders ask the public to practice social distancing, Grubhub has suspended the delivery fees to support this movement. The company is collaborating with Verizon Business to provide complimentary meals to frontline health care workers in New York City. The food delivery service is using  “Donate to Change” program to raise funds for local restaurants and delivery drivers affected by the restrictions surrounding virus concerns. Moreover, they are providing no-contact delivery and order pickup options to ensure their drivers’ and customers’ safety.

Uber Eats

In France, Spain, and the UK, Uber eats saw drops in the average daily users ranging from 2% to 23% in March, as compared with the averages for January and February. The number of active users on Uber Eats also declined to 1 million in March compared to 3 million monthly active users in the corresponding quarter in 2019. Uber Chief Dara Khosrowshahi clearly stated in an interview that the demand for Uber Eats app jumped 50 % across various countries in the first quarter. However, the company still lost $313 million on an adjusted EBITDA basis.

How Uber Eats is Dealing With the Challenges Imposed by Coronavirus?

According to an Uber Eats’ spokesperson, the company is waiving delivery fees for almost 100,000 independent restaurants in an effort to support those struggling in this difficult situation. The food delivery service is also working to deliver free meals to more than 3,00,000 healthcare workers in the U.S. and Canada. The company is taking precautions to reduce the spread of Coronavirus by enabling the contactless delivery option for the users and providing the drivers with sanitation materials like gloves, masks, sanitizers, etc. Uber Eats has also added ‘delivery notes’ feature to limit the in-person contact. Customers can notify delivery agents about their preferred delivery location using delivery notes.

Deliveroo

Deliveroo, UK based food delivery startup, has confirmed that it’s axing more than 350 employees, almost 15% of its global headcount, to battle the falling demand and revenue during the COVID-19 crisis. In an interview, IWGB Couriers and Logistics Branch Chair Alex Marshall stated that the food delivery couriers working for Deliveroo, who were already facing poverty wages before the pandemic, are now being driven to destitution, as demand has completely dried up across the U.K

How Deliveroo is Dealing With the Challenges Imposed by Coronavirus?

In a recent interview, Deliveroo founder Will Shu told that the food delivery company is taking a lot of steps to keep their customers, riders, and restaurants safe amid COVID-19 pandemic. The company is adding a “no-contact drop off” option in its food ordering app to promote social distancing. He further added that the company is ordering hand sanitizer for riders and setting up a dedicated support team to answer any queries of riders and customers regarding COVID-19. Moreover, Deliveroo has also provided additional packaging guidelines to the restaurants to defend food from the coronavirus.

DoorDash

According to Earnest Research, a company that looks at credit and debit card purchasing data for millions of consumers in America revealed that DoorDash deliveries and sales have declined in growth since February as people are spending more of their dollars on purchasing groceries. Doordash deliveries declined from 26% to 16% between the first and third weeks of March due to lockdown restrictions.

How DoorDash is Dealing With the Challenges Imposed by Coronavirus?

DoorDash set aside $20 million for marketing efforts to help shore up the restaurant sales. The company is strictly following the safety measures to ensure greater safety for their merchants, employees and customers. To protect people, DoorDash deliveries have gone contact-free and the company is distributing 1 million sets of hand sanitizers and gloves to the delivery boys. For deeper insights into what DoorDash is doing to tackle the food delivery challenges amid pandemic, watch out the DoorDash’s CEO interview with CNBC television:

Essential Features to Include in Your Food Delivery App to Tackle COVID-19 Challenges

Below listed are some prominent features that can be included in a food ordering app to tackle COVID-19 challenges:

Delivery-Safe Menu Items: Eating fresh and nutritious food is necessary to keep yourself protected from any disease. Consider adding a delivery menu in your app that only features dishes that can be refrigerated and reheated without compromising the food quality.

Multiple Delivery Options: Expand the ways customers can get their food by offering multiple delivery options like contactless deliveries and curbside pick-up in your app. Providing various delivery options to your customers would play a significant role in reducing the spread of the virus and promoting social distancing in these crucial times.

Awareness Notifications: As the fear of Coronavirus is looming all over the world, it’s necessary to aware customers about the precautionary measures being taken by your restaurant to gain their trust and loyalty. From cooking and packaging to your delivery methods, show your customers, how your restaurant is taking sanitation seriously.

Cashless Payment Methods: Add online payment methods in your app that supports cashless transactions. At the moment, cash exchange could become the primary reason for Coronavirus transmission. Allow your customers to transact easily by providing them with multiple payment options like credit or debit cards, e-wallets, net banking, etc.

Restaurant Management Tips for Restaurateurs to Overcome COVID-19 Challenges

Following are some restaurant management tips for restaurateurs to overcome COVID-19 challenges:

  1. Guide your restaurant’s staff about the precautionary measures needed to be followed to keep the virus at bay.
  2. Implement the following workplace controls to reduce transmission among employees:
    • Social distancing
    • Temperature tracking
    • Face masks compulsion
    • Regular Cleaning & Disinfecting
  3. Keep raw food separated from cooked food to avoid cross-contamination.
  4. Use hot water to sanitize and wash utensils.
  5. Help customers maintain proper infection control by:
    • Discontinuing operations like salad bars, buffets, and beverage service as all of them require customers to use common utensils or dispensers.
    • Finding ways to encourage proper spacing while eating.
    • Discouraging customers from bringing pets in the restaurant.

Wrap Up

To conclude, the COVID-19 pandemic has opened up many gates of opportunities for entrepreneurs to thrive in the online food industry. During the lockdown, food is a basic necessity for every individual around the globe. Despite several challenges, online food delivery apps have come up as a blessing in disguise for foodies in this crucial time. The direct physical contact between customers and delivery agents has emerged as the biggest challenge. Still, delivery companies have found ways to deal with such problems by introducing several features in their delivery apps.

Coronavirus will not last forever, but food ordering apps are definitely here to stay and for a long period. If you own a restaurant, then it is the best time to lift your business by creating a food delivery app or website. YoYumm, an online food ordering marketplace solution allows users to build food ordering web portals and mobile apps for buyers, merchants, and delivery staff at reasonable prices.

Looking to Build an Online Food Delivery App Amid COVID-19 pandemic?

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