If COVID-19 Doesn’t Kill You, Uber Eats Will: Hospitality Entrepreneurs’ Views on Online Food Aggregators

Abstract

Even before COVID-19 changed the world, hospitality operators were struggling to understand how to cope with the short-term benefits but potentially long-term damage to their business model of collaborating with food aggregators. The ease of accessing a well-managed customer interface distribution network needed to be balanced with the overheads incurred in doing so, but also with the loss of direct contact with a customer base whose loyalty is increasingly with the food aggregators, not the hospitality operations providing the food. This qualitative case study consisted of in-depth interviews with senior management selected from an existing network of personal contacts, using purposive sampling to identify seven owners of restaurants in the Auckland region of New Zealand. Thematic analysis identified their reasons for considering food aggregators as a business partner, the benefits and costs of doing so, and the impact on COVID-19 on their businesses. The research found that their initial goals had been to fill spare capacity in the restaurant and build additional take-away trade. While there was an initial increase in business, the commission taken by the food aggregators and the shift of loyalty of the diners from the restaurant to the food aggregator had a major impact on the financial sustainability of the operations. It also caused a significant shift away from in-restaurant dining and towards take-away dining, thereby considerably lessening the opportunity for staff to build relationships, customer loyalty and upselling opportunities.