Say you live in Asheville, North Carolina (like I do), and you get a hankering for some of the city’s beloved BBQ. You might start with a Google search, which provides plenty of options. Clicking on a specific BBQ joint brings up a box with handy information such as a star rating, the address, business hours, and phone number.
These restaurant listings, which appear in search and Maps, also often include an item called “Order,” with links to big-name delivery services such as DoorDash and Grubhub. What you probably won’t see are local services like Delivery Now or Takeout Central—companies that were delivering meals a decade or more before the national giants were a twinkle in a founder’s eye.
Being left off these listings has been devastating, says Wes Garrison, CEO of Takeout Central, which began in 1996 in Chapel Hill and now delivers food in nine communities in North Carolina (including Asheville). He says he’s applied seven times to Google since 2017 for the ability to add Takeout Central to these “Place an order” link lists (as Google calls them) for the restaurants his company has long served. (Garrison said he’s had some communication with Google, but no progress on joining the program.)
It’s not just a challenge in North Carolina. Local delivery companies around the country report similar frustrations.
And their complaints go beyond the order links. They have also been frustrated trying to buy ads in Google restaurant listings, which feature link text like, “Order Now · grubhub.com.” The program has been in closed beta for years. Google declined to say which delivery companies participate, but Grubhub appears to dominate. Fast Company also found examples of Caviar, Seamless, and Uber Eats. (The restaurant owners can also buy ads on their own listings.)
“It’s just reserved exclusively for companies with big buckets of money from investors,” says Andrew Simmons, CEO of OrangeCrate, a San Diego-based company, founded in 2015, that delivers meals in 39 cities around the US.
Simmons is also president of the Restaurant Marketing and Delivery Association (RMDA), a trade group of over 500 US food delivery companies, founded in 1990. While individual members may be small compared to the likes of Postmates or Uber Eats, they add up. Simmons calls the association the equivalent of a $400 million company.
The organization has more than doubled its ranks in the past year as Simmons seeks out and recruits new members. “I estimate there are 800 to 1,000 [local delivery companies] out there,” he says.
On October 6, 2020, the RMDA and Takeout Central sent a letter to the US Department of Justice’s Antitrust Division. The letter, shared exclusively with Fast Company, requests an investigation of Google for anticompetitive activities in how it treats smaller food delivery services on “Place an order” links, ad sales, and other parts of its restaurant listings.
“Google has permitted only its partner companies an opportunity to participate, sidelining all other restaurant delivery services not associated with Google,” reads the letter. It goes on to warn that, “companies that are not associated with Google will be forced out of business.”
(Garrison says that he has not heard from the DOJ, beyond an acknowledgement that they received the letter. Google was not aware of the complaint, and the DOJ did not respond to an inquiry from Fast Company.)
Another complaint in the letter is that the small delivery companies have been left out of Google’s “deep integration,” which takes the form of big buttons on some restaurant listings that read “Order Delivery.” Launched in 2019, deep integration allows people to place their orders directly in the Google interface, without going off to another web site.
David and Goliath
A Google representative tells Fast Company that the company isn’t deliberately leaving out the smaller delivery services. Rather it’s overwhelmed by the hundreds of companies applying–especially with the boom in food delivery during the pandemic.
Adding companies to its Order with Google program, which includes both the “Place an order” links and the direct order buttons, requires a lot of manual labor, the representative says. It’s not a self-serve program where any applicant can just fill in some online forms. The deep integration for the “Order Delivery” button is especially involved, the company says in an email, requiring months of technical work.
“We’re onboarding new partners as quickly as possible, focusing on where we can provide the most value to both merchants and their customers, and working to make our tools more scalable and self-service,” Google said in a statement to Fast Company. The company says it’s prioritizing applicants based on factors like the fees they charge and their reach.
The issue of reach is a sore point for small delivery companies, because their national rivals exaggerated that reach–listing in their sites and apps restaurants that had never consented to do business with the likes of DoorDash or Grubhub.
Google requires a restaurant to give consent before a delivery company can add itself to the ordering links in a restaurant’s business listing. But Google’s program essentially runs on the honor system. A Google representative acknowledges that abuses were rampant in the past.
Meanwhile, small delivery companies that actually had relationships with the restaurants were left out. “How much traffic did [national companies] get by putting themselves on the Google business listings of restaurants that I’ve had agreements with for 10 or 15 years, 20 years, in some cases?” says Garrison.
DoorDash says that it stopped adding restaurants to its platform without permission as of November 1, 2020. That’s just two months before a California law, AB2149 outlawed the practice in its home state. (Colorado and Seattle passed similar legislation in June, and others are in the works around the country.)
Grubhub acknowledges that it is still adding restaurants to its own site and app wit
hout their permission–except in places such as California where it’s illegal. But Grubhub says it is not adding ordering links to Google restaurant listings for unpartnered restaurants. “Grubhub is committed to helping restaurants during this challenging time, and we place restaurants on our platform to generate more orders for restaurants and offer diners variety,” Grubhub said in a statement to Fast Company. The company says that it has no choice but to add these “unpartnered” restaurants to its app and site in order to remain competitive.
Even if the national companies do rein in their listing of unpartnered restaurants, it’s too little, too late, says Paul Birrell, owner of Delivery Now, which has been serving Central New Jersey since 1992. “The damage that it did is irreversible damage,” he says, “And that’s a large part of what hurt us, and I’m sure hurt lots of other small restaurant delivery services.”
The local delivery crash
Whatever the cause, it’s clear that local delivery companies have seen a dramatic turn of fortune within about the past five years. “We were growing at a healthy rate, anywhere between five and 20% per year,” says Takeout Central’s Garrison. That growth stalled in 2018, as the national services expanded into Takeout Central’s markets. In the company’s hometown of Chapel Hill, the number of orders is down about 50%, says Garrison. In the Raleigh-Carey region, it’s down about 80%. And in 2019, Takeout Central had to shut down its operations in Knoxville, TN. (Asheville has fared better, he says, because residents tend to be more supportive of local businesses.)
“Over the course of the last four and a half years, we have lost approximately 70% of our total volume,” says Delivery Now’s Birrell. In 2019, the company was forced to shut down in two counties in New York state due to competition from DoorDash and Uber Eats, he adds.
The nationals’ aggressive strategy to list as many restaurants as possible has made them irresistibly convenient.
Of course the national providers benefit from more than search results. They also bring a lot of money. DoorDash, which also owns Caviar, won over half the U.S. market in June, according to Bloomberg Second Measure. It raised $3.37 billion in an initial public offering in December. Uber, which owns Uber Eats and Postmates, raised $8.1 billion in its 2019 IPO. Grubhub, which also owns Seamless, sold for $7.3 billion to Netherlands-based Just Eat Takeaway, the largest food-delivery conglomerate outside of China.
These companies can afford to lose vast sums in order to build the market share that they hope will someday lead to profitability. In Q1, for instance, DoorDash posted a $110 million loss, while Grubhub lost $75.5 million. With so much money to spend, the national players can do things like charge restaurants lower commissions, or even zero commission. They can offer more-generous discounts to customers. And they can spend a lot more on advertising to recruit drivers and attract customers.
The nationals’ aggressive strategy to list as many restaurants as possible has also made them irresistibly convenient. And this extends beyond Google restaurant listings to the provider’s own websites and the slick apps that have earned prominent positions on millions of smartphone screens.
The local providers also have sites and handy apps, but they may be limited to a few dozen or a few hundred restaurants–not even all the providers in their home towns. Download a heavily advertised app from Grubhub or Uber, however, and you get seemingly the whole country. You might also get some irresistible, IPO-funded discounts.
The ongoing battle over links
Big delivery companies continue to have a toehold in Google’s restaurant listings, which are part of a program called Google My Business. Google generates listings for all businesses in Google search and Google Maps. But business owners who “claim” their listings can take some control over them, such as posting photos, updating opening hours, offering discounts, and responding to customer reviews.
They can also add a link to the “Place an order” list. That might be their own web address, if the restaurant does its own deliveries. Or it might be a local provider they prefer to do business with. (Last year, they got the ability to add multiple links—up to 10.) Asheville’s Bonfire BBQ & Catering, for instance, does feature a link to Takeout Central.
But that’s not enough, says Garrison, because it requires persuading each restaurant partner to take the time to add Takeout Central (assuming they have even claimed control of their Google listing). Garrison says he sent instructions with screenshots to all his partner restaurants, and even offered to pay them if they would add Takeout Central. “And we have like three restaurants that were willing to do it,” he says, “Whereas Postmates and DoorDash and Grubhub and Uber are able to add that link through backdoor access to Google, without having to have the restaurant do anything.”
And while restaurants can add links, they can’t remove the ones that big delivery companies placed there–even ones that were added without their permission. Instead, They have to contact DoorDash, Postmates or whomever else and request a takedown.
A Google representative says that this is the right approach, because a takedown doesn’t just involve removing links from Google My Business. Restaurants should contact delivery companies directly, they say, to also have their menus removed from those delivery companies’ own websites and apps. But if a delivery company isn’t responsive, Google says that its support team will help get unwanted ordering links removed.
Google as gatekeeper
Google has made virtually any information accessible with a few keystrokes. It seems as if everything that exists is on Google. And thus if something isn’t on Google, it doesn’t exist. Small food delivery companies say they were banished into nonexistence by Google’s favoring of their deep-pocketed rivals on ordering links.
But Google does face a big task of trying to integrate hundreds of companies into its system. The search giant says it needs some way to prioritize. Google’s mention of plans to make “tools more scalable and self-service” hints at efforts to speed up the process of admitting companies.
Then there are the ads. Google has offered no indication if or when the ad spots in restaurant listings will open up to all competitors. “Can you imagine if this had ever gone on in traditional print advertising,” asks Paul Birrell, “that the back cover of Newsweek might be a Ford advertisement, but Tesla can’t buy that ad at any price?”
Powerful as it is, though, Google isn’t the only factor in the fortunes of local delivery companies. The national providers have virtually unlimited resources to spend on undercutting their rivals. Wes Garrison acknowledges the uneven playing field, but asserts that Google tips the balance further in its restaurant listings.
“I don’t think we would win or be the market leader. That’s not what we need to be,” says Garrison. “I just don’t want to be driven out of business because of unfair competition, because of somebody else having unfair access and an unfair advantage.”