The last half decade has seen the rise of meal delivery companies. Services you know and love such as Uber Eats, Doordash, and Grubhub have outdueled the kitchens of many households across North America. The rising popularity of these apps raises an important, yet simple question: are meal delivery companies a convenience or threat to traditional dining?

 

     Firstly, I think it's important to uncover why these apps have grown exponentially in popularity over the past half-decade. I remember people using these apps before 2020 to a certain extent, however, not to the same frequency as they have been post-pandemic.

 

    Coincidentally, the COVID-19 pandemic began in early 2020. As we all know, during the pandemic traditional dining was shut down and restaurants either had to close or focus on only takeout orders. People who could afford to spend extra for delivery services used the aforementioned meal delivery companies.

 

     From a convenience standpoint, using these services made sense at that time. The general population during the pandemic was facing a movement of boredom and laziness, an exact recipe for people to use meal delivery services even more than before. 

 

     It is also important to look at different demographics of people and how the pandemic impacted them in terms of meal delivery services. Two of the prime demographics for these companies during the pandemic were elderly people and college/university students. The majority of elderly people protected themselves from the virus by staying within their homes while a lot of college/university students were trapped in their dorms/apartments. Due to these restrictions, these groups of people played a major role in the success of these companies.

 

     Now that we have shed light on why these services have grown so vastly, let's answer the main question: are meal delivery companies a convenience or a threat to traditional dining? In short, the answer is yes and no. 

 

     Of course, traditional dining will never fully go away. The experience of eating at a restaurant will always outmatch the experience of eating the same meal at home. Although a person may not like that experience more, the ambiance and nature of eating a freshly cooked meal can outweigh the benefits of eating a meal from the comfort of your own home. 

 

     A positive impact meal delivery services have on traditional dining is the increase in distribution channels. Most restaurants have two distribution channels: takeout and dine-in. The addition of the third channel of distribution (delivery) allows customers to acquire menu items from a restaurant without the restaurant having the expense of hiring delivery drivers. 

 

     With all of this mentioned, the threat of meal delivery services to traditional dining is very tangible. This is mainly due to the commission that these companies take from restaurants in order to generate revenue. These commissions can reach up to 30% of any order from a restaurant. This means that for an order of $100 that a customer pays, the restaurant is only making $70 of the $100 they would have made if the customer had dined in. This causes profit margins for restaurants to significantly lower.

 

     Overall, the exponential rise of meal delivery companies is no coincidence when understanding the impact the COVID-19 pandemic had on the restaurant industry. Food service companies were forced to adapt during this time, using meal delivery apps as a middleman between themselves and consumers, a practice that may have hurt them in the long run. So, as meal delivery services continue to grow, will traditional dining find new ways to compete, or will it gradually fade into the past?