clock menu more-arrow no yes

Filed under:

Food Delivery Apps Have Taken Over San Francisco. Here's Why.

How Postmates, Munchery, Caviar, and more are changing food delivery.

Tyler Olson/Shutterstock

California has weather and New York has delivery. Less than a decade ago, the few restaurant delivery options that existed in San Francisco were rarely anything you'd want to eat given the choice, and the idea of ordering in without having to go out and pick it up was more of a novelty than a regular occurrence.

But just as the San Francisco-based Uber transformed transportation in a city notorious for its residents' inability to flag a taxi, so too do a relatively new crop of companies — notably Postmates, Sprig, SpoonRocket, Caviar, and Munchery — aim to change delivery options, both in Bay Area and beyond. All five companies were founded and are still headquartered in San Francisco or Berkeley, even as they expand into cities across the United States. In 2014, the five services brought in a combined total of $78 million in funding. (Just last month, Postmates alone secured an additional $35 million.) But what, exactly, are these companies delivering? Is their proliferation a sign of changing food culture in the Bay Area and beyond? And why are they popping up now, after all these years of accepting SF's terrible delivery options fate?

Are apps' proliferation a sign of changing food culture in the Bay Area and beyond?

Mention instant delivery and San Francisco, and it's hard not to immediately think of Kozmo.com, the legendary service that launched in 1998 at the height of dot-com bubble. Whether you tried Kozmo or simply heard of it as a cautionary tale, the idea of getting people whatever they wanted, wherever they were in San Francisco ultimately failed spectacularly. But in retrospect, Kozmo.com was ahead of its time in tapping into a rich vein of the human condition: We want food, we sometimes want it in very specific ways, and we want it brought to us as quickly as possible.

Exactly a decade since Kozmo.com shuttered its doors, and long before its rumored rebirth, a new brand of delivery service has emerged in San Francisco. What makes these companies new isn't the underlying philosophy: Instead, recent technological advances and the expectations of a certain new breed of user have altered the delivery landscape substantially. In 1998 there was no iPhone or Android. There were almost no smartphones, period — the first BlackBerry was yet to be introduced, and even that was a two-way pager. Without those phones and the GPS tracking they enable, delivery logistics were markedly different for users and especially for services. And these technological upgrades have changed our expectations substantially when it comes to how we get goods and how quickly. Bastian Lehmann, CEO of Postmates, points out that "whenever something was possible faster, we rarely ever went back and said we'd like something slower. Google trained us for 15 years that a faster search is a better search. Amazon did their best to reduce their Amazon Prime deliveries from five days to two-to-three days.... having fast access to goods is super-appealing to customers."

Lehmann, along with Sam Street and Sean Plaice, co-founded Postmates in 2011. Originally, Postmates was an on-demand delivery service for things you already owned, like if you needed to get your keys from a friend or have someone bring you the bag you left at home. The only problem was that nobody used it as intended. Instead, users often requested the Postmates courier go buy them something, usually food. Postmates ignored those requests until 2012, when it equipped couriers with $100 gift cards and sent a newsletter out to its user base of around 2,000 to 3,000 customers. The result? About $10,000 worth of goods bought and delivered — mostly prepared food. Since then, its fleet has grown from 25 to nearly 8,000 couriers in 24 cities, with a total of 1.5 million deliveries.

While longtime delivery services Seamless and GrubHub have a long list of restaurants you may or may not recognize — including many you might not have tried had it not been for the convenience of delivery — Postmates has an inventory of more than 36,000 restaurants across all its markets, and new restaurants are added as users request them. In early 2015, Postmates launched its "Merchant Program," in which restaurants partner with the service: A customer who orders from a merchant partner pays a delivery fee of $4.99, whereas delivery charges from a non-merchant restaurant will vary, depending on factors like location and how busy the couriers are. That $4.99 delivery charge is offset by the restaurants, who pay Postmates about 10 to 15 percent of the total food order. Postmates sits on the higher end of the food delivery spectrum: Couriers will get you food from any restaurant you request, in the way you request it (bun on the side, sauce in a separate container, and so on).

Caviar also delivers food from a range of restaurants. Founded in 2012 and acquired by Square in 2014, Caviar delivers across the Bay Area — San Francisco, the East Bay, and the South Bay — and in 10 additional cities. Instead of starting with customer requests, Caviar goes straight for partnerships with restaurants in each market. These restaurants tend toward the upscale, the local favorites, and the popular, such as those where San Franciscans engage in their beloved hobby of standing in line. But while the restaurants are wildly appealing, they're also the spots that — like many Bay Area restaurants — have never offered delivery. Because Seamless is a platform for restaurants that already deliver, that automatically limits its selection in a city like San Francisco. Both Caviar and Postmates employ their own fleet of couriers/contractors (the emergence of the on-demand economy, fueled by Uber's massive success, allows companies to rely on contractors and 1099s rather than full-time employees).

But food delivery in the Bay Area has expanded far beyond restaurants. Services like Munchery, Sprig, and SpoonRocket aim to meet customers at the nexus of healthy, convenient, and accessible, although the definition of "accessibility" varies. This reveals another key reason why food delivery is taking off in San Francisco and spreading to new markets: It's not simply food that's being delivered, it's Bay Area food culture. Organic food, farm-to-table eating, knowing and celebrating our chefs — these are intrinsic aspects of how many people eat in Northern California. Delivery services that focus on these aspects of the dining experience mean customers can seamlessly maintain that aspect of dining, in the comfort of their own homes.

It's not simply food that's being delivered, it's Bay Area food culture.

Founded in 2010, Munchery was at the forefront of this approach. Its target diner just got home from work, had a long day, and wanted to avoid cooking, but ordering takeout meant limited, if any, healthy options. Munchery turned to chefs rather than restaurants in order to create prepared food that could be ordered on demand or in advance. Meal options have grown to include portions for children (around $5-6) as well as adults (about $9-15 for full entrees, less for sides, not including a delivery fee of $2.95 and gratuity). Meals arrive chilled with instructions for heating. CEO Tri Tran explained in email what sets Munchery apart: "We differ than Caviar and Seamless/GrubHub in that we produce our own food by local chefs we employ," he says. "Our chilled format allows us to have significantly larger variety and higher food quality than Sprig or SpoonRocket." But, he followed up, "We have tons of respect for all these other companies."

SpoonRocket originally focused on delivering food to students at UC Berkeley, with the goal of provide hot, inexpensive, healthier meals to anyone stuck studying in the library or hungry in the dorms. It's since expanded beyond the student population, delivering in both the East Bay and San Francisco, but is launching in new markets by again starting at universities. SpoonRocket's CMO Mike Fox says SpoonRocket evolved to answer the question posed by co-founders Steven Hsiao and Anson Tsui: "Why can't you press a button and get food?" SpoonRocket's current target audience isn't students, but rather a larger, more scalable market: young professionals, especially those who want the convenience of a meal delivered at lunch or while working late.

SpoonRocket's menu is limited to four options every day — two hot meals, one hot vegetarian meal, one salad — plus a smoothie and maybe a dessert or a drink. Fox says SpoonRocket has always aimed at being "accessible" and not an "exclusive service." Price matters, he says, and from the start the company's goal was to build something that lures budget-conscious customers away from McDonald's and pizzerias: All SpoonRocket meals are $8 (up from the original $6). The price does not include fees and gratuity, which can bring a single-entree meal to around $12. When asked about the emergence of companies like SpoonRocket, Munchery, and Sprig, Fox remarked that "the tech press and the business press are always trying to lump us all together and say these are all companies that are competing with each other. But the way we look at SpoonRocket is — we actually are happy with all the other folks that are in the space because we're trying to change consumer behavior and have people understand this kind of option is available to them. And that's way bigger than any one of the three or four of us doing this."

Sprig, a more recent contender, was also borne of the same problem: Ordering-in isn't healthy and cooking is time-consuming and often pricey. "How do we make it simple to eat well?" asks CEO Gagan Biyani. "And how do we make it simple for everyone in the world?" Biyani says he wants Sprig's customers to find better quality and healthier options worth the cost/convenience tradeoff — worth it enough, he hopes, that people would want to order on a regular basis. Sprig brought on chef Nate Keller, Google's former executive chef, who worked with culinary scientists to reverse-engineer meals: What works in a restaurant doesn't necessarily work for delivery. What could Sprig make that echoed restaurant meals but would arrive looking like something you'd want to eat? How could they design meals that were healthy enough you could eat them every day?

As food delivery becomes ever more viable, options become ever more varied.

According to Biyani, Sprig is popular with a wide range of customers: not just younger tech workers, but also parents and chefs. Biyani figured that if the service was something Keller would use, other chefs would too, so before launch he asked other chefs what they ate when cooking for their families. Some of them — including Stuart Brioza (State Bird Provisions), Tim Archuleta (Ichi), and Cortney Burns and Nick Balla (Bar Tartine) — have made appearances as Sprig guest chefs, showcasing the family-friendly dishes they eat when not at work.

Changes in the organic food movement, both locally and nationally, have helped make a service like Sprig possible in 2015. Although farm-to-table eating has been around for a while, the larger-scale organic food movement is fairly new: Sprig's supply chain and the size of its market allows it to buy organic food at scale. And as food delivery becomes ever more viable, options become ever more varied: A new service called Bento delivers bento boxes that customers create from a list of Asian dishes. Whatever concerns there may be about the on-demand economy — how delivery fees might impact restaurants' already razor-thin margins, how accessible food delivery is in terms of price and coverage in neighborhoods across San Francisco and the East Bay — food delivery is not going away any time soon. With the push of a button, food is here, but there are a lot of companies vying for that button press.

Sign up for the Sign up for the Eater newsletter

The freshest news from the food world every day