Grubhub has officially rolled out delivery at Taco Bell locations across the country.
But can a Cheesy Gordita Crunch travel well?
Taco Bell, like other fast-food restaurants, has invested in its packaging to make sure its food arrives to the customer at its highest possible quality, said Grubhub CEO Matt Maloney. Chicago-based Grubhub is also doing its part to reduce the amount of time food sits around.
"We don't even submit the order at the Taco Bell until the driver's actually there," he said. "We want to reduce the time your food is waiting. Your food is constantly either being produced or in transit to you."
Grubhub's reach has been expanding through the partnership with Louisville, Ky.-based Yum Brands, announced a year ago. The company last year roughly tripled the number of markets it delivers in, reaching many cities and towns long overlooked by the on-demand economy.
Consumers increasingly expect to be able to order the food they want wherever and whenever. The partnership lets Yum Brands, also the parent company of Pizza Hut and KFC, tap into that demand.
"We were founded in metro areas and we've been building out since then, and Yum is in more of the rural, suburban, broader markets," Maloney said. "It's very helpful for our scaling and also for theirs. They want to grow into more metro (areas) and we want to grow more broadly."
Grubhub has more than 105,000 restaurants on its platform, up from 80,000 at the end of 2017. At the end of 2018, daily orders were up 31 percent from 2017, and diners who have placed at least one order in the last year were up 22 percent.
Annual revenue was $1 billion, up 47 percent year-over-year, according to earnings released Thursday.
That growth is "staggering," Maloney said. Consumers are migrating to online ordering platforms en mass as people become more dependent on delivery and on-demand services. Grubhub's challenge is maintaining and accelerating its lead, Maloney said.
"That's going to require a lot of money in marketing, advertising and delivery logistics because we want to always provide the best service to as many diners as possible," he said. "The fundamentals are there. ... We're able to spend more effectively."
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Taco Bell is using Grubhub's technology for ordering and checkout. Customers can place orders through either Grubhub or Taco Bell's websites or apps.
There are about 6,500 Taco Bell and KFC locations live on Grubhub's platform, and the company plans to add more. It also plans to launch its online ordering and delivery at hundreds of Pizza Huts in the next few months, and is building an app for KFC.
Grubhub controls about 40 to 45 percent of the food-delivery market, though that can vary drastically by city, said Jeremy Scott, a research analyst who covers Grubhub at investment bank Mizuho Securities.
"In order to stay where they are, I think they're doing the right thing," he said.
Instead of partnering just on delivery, Grubhub is pitching its whole platform to restaurants, plus the consumer data that comes with that. Chains are worried about their data and margins, and an all-encompassing platform like Grubhub's can help restaurants build customer loyalty, for example.
But competition has been tight, as other delivery services such as Uber Eats and DoorDash grow fast. Reports also emerged Thursday that San Francisco-based Postmates, which delivers food, groceries and alcohol, has filed for an initial public offering.
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