Meal delivery is hot.
Companies that partner with restaurants to serve prepared meals directly to customers at their home, office or elsewhere are proliferating in the Longview area.
You might say the internet-powered trend is making eating in the new dining out.
“I would just personally like to use whatever (service) the local restaurants are using,” said Longview insurance agent William McWhorter, referring to the growing number of choices for delivery. He added that he enjoys the convenience of meals being delivered.
So does Jennifer Parsons, who said she enjoys a delivered meal once or twice a month.
“They’re friendly,” she said of the drivers. “And the food, when it gets here, is hot and fresh. And it’s convenient.”
They’re not alone.
In 2020, more than half of restaurant spending is projected to be “off premise” — not inside a restaurant. In other words, spending on deliveries, drive-throughs and carryout meals is overtaking dining inside restaurants. According to data from investment group Cowen and Co., off-premise spending will account for as much as 80 percent of the industry’s growth in the next five years.
That means no segment of the industry is growing faster than online delivery, which now accounts for 5% to 10% of total restaurant business, according to industry reports. It is outgrowing fast food chains like McDonald’s, fast casual chains like Chipotle, and others.
Grabbing a piece
That rapid-growth trend is being seen in Longview, where meal-delivery companies are rushing to enter the market.
Though delivery services existed before its arrival, the trend took off with the arrival of Waitr in May 2017.
Based in Lafayette and Lake Charles, Louisiana, the company made a big push into Longview and now provides deliveries from 100 restaurants in the area. It has hired 100 drivers to provide the service, spokesman Dean Turcol said.
“I think we are one of the first,” he said. “We try to do the best service.”
Rudy Kiapeta, owner of the Tuscan Pig Italian Kitchen with wife Miriam, recalled a Baylor graduate previously opened a delivery business that he then sold to MenuRunners before Waitr arrived.
Waitr soon faced more competition. Austin-based Favor began serving the Longview area in October 2018. Other companies now serving the market include Grubhub, Doordash and Uber Eats.
All have a similar internet-based business model. Customers may download apps on their smartphones or go to the delivery service’s website to place orders. Diners click on participating restaurants of their choice, place orders from the menus and pay online.
The drivers receive orders via electronic messaging, pick up the meals from the restaurants and deliver them to the customers. The service takes a cut of the menu price, and the drivers can receive additional tips when they hand off the grub.
Waitr has been the most visible among the city’s delivery businesses. Its logo appears at participating restaurants and drivers are frequently seen entering restaurants with large bags to carry orders to their home or office destinations.
“Waitr is the most established and has the largest pool of qualified drivers,” said Kiapeta, who opened Tuscan Pig on High Street in 2016 after previously operating it as a catering service.
The growth it’s brought has been good for the Tuscan Pig, he said.
The increase in volume generated by using Waitr, Favor, Grubhub and other services has enabled him and his wife to hire an additional employee to work on weekends.
However, some restaurant owners are upset over fee increases Waitr has proposed and are severing ties.
David Choy of the family owned Goung Zhou Asian Bistro on Judson Road took to Facebook to announce the restaurant would no longer work with Waitr.
He wrote Waitr notified him it would increase its delivery fee from 15% to 23.5%, plus a 3.1% credit card transaction fee and 30 cents per transaction. He said delivery services account for about 4.5% of his volume.
“Some restaurants raise the prices to cover 15, 20%,” Choy said.
His Facebook post said Uber Eats charges 30% while Grubhub charges 20%, adding he would not use them, either.
Chuck King, owner of two Chick-fil-A franchise in Longview, said he, too, is re-evaluating whether to continue doing business with Waitr.
“They have asked for significantly higher fees,” King said. “Obviously, it has a lot of restaurants concerned. I’m talking to several other restaurants.”
King said he also does business with Doordash and Favor, adding some competitors “are more reasonable about their fees.”
Turcol responded, “We are still charging the lowest fees nationally even with our new rate structure.” He said restaurants with the highest order volumes pay half of what national competitors charge restaurants.
The new rates are designed to be competitive and make sure Waitr and its restaurant partners continue to grow, he said.
Will Ruegg, owner with wife Puktra of the Lil Thai House downtown, has another issue with the services.
He said some are “filtering all my money,” and making him wait an extra day or so to put money into his account.
“We are already working hand to mouth,” he said of the small-but-popular restaurant.