If Domino’s Can’t Beat Delivery Apps, No One Can

In recent years, Domino’s has sometimes fancied itself as a tech company with a side hustle delivering pizza. It’s true. By tinkering with technology such as AI, GPS, autonomous vehicles, and augmented reality, the world’s largest pizza chain has turned the dark art of food delivery into a science. It all started with its fabled Pizza Tracker, which launched in 2008 and created an early standard for tracking food delivery. Domino’s now has something like 15 different ways to order a pizza, including voice assistants, Facebook Messenger, Slack, and a “zero click” app that automatically orders for you after 10 seconds.

All of this tech helped Domino’s increase sales and streamline its operations, allowing it to finally “outpizza the Hut” and become the facilitator of about a third of all pizza deliveries in the United States. Whereas other restaurants, pizza or otherwise, have become reliant on a constellation of third-party apps, Domino’s keeps everything in-house, which means it comes out ahead—and theoretically, so do you. No Postmates, no problem: For $9.99 or so—plus a small fee and a tip—a Domino’s pizza driven by a Domino’s driver might show up at your doorstep within 30 minutes.

But earlier this week, Domino’s announced that it, too, would partner with a delivery app. By the end of 2023, the hangry masses will be able to place orders for Domino’s pies and various sodium bombs through Uber Eats in most places (though Domino’s drivers will still deliver the food). By joining forces with Uber, the company is acknowledging how dominant delivery apps such as DoorDash, Uber Eats, and Grubhub have become—using them is approaching a necessary requirement for restaurants to stay afloat. If Domino’s can’t stay off the delivery apps, can anyone?

Fittingly enough, the American food-delivery craze actually began with Domino’s. The company is often credited with popularizing the concept of pizza delivery (it created the modern-day pizza box, and co-founder Tom Monaghan even met his wife while delivering a pizza). The delivery-centric Domino’s model managed remarkable longevity, even as pizza ordering went from landlines and cellphones to dial-up to mobile apps. In 2011, not long after then-CEO Patrick Doyle embarked on an unlikely national ad campaign conceding that his pizza kinda sucks, he issued a challenge to his technology team: He wanted ordering a pizza to be easy enough that someone could do it while waiting at a stoplight. Mobile ordering was the future, and in the future, pizza orders should take only 17 seconds.

In a sense, Domino’s has become a victim of its own success. The company’s technological savvy helped prime the public for more than just pizza delivery. These third-party apps appeared during the gig-economy boom of the 2010s and then exploded during the early pandemic. Food-delivery sales could have gone the way of Peloton as the pandemic slowed, but they haven’t. Roughly 14 percent of pizza sales took place through delivery apps in the past year, alongside an array of dishes and cuisines that would make a diner menu look meek. As of 2023, hundreds of thousands of restaurants are on delivery apps, offering dry-aged steaks from fine-dining spots and dry steak bagels from McDonald’s. Restaurant dining rooms may be full again, but the apps are now pulling in more revenue than ever before.

In other words, they’ve simply gotten too big to ignore. Even though Domino’s will continue to deliver its own pizzas, its CEO, Russell Weiner, has put the cost of missing out in plain terms when discussing the Uber Eats deal: “There’s $5 billion of pizza sales happening on the aggregator platforms … [that] we should have a third of.”

With millions of restaurant workers preparing orders and millions of gig workers delivering for them, an entire food-delivery ecosystem has coalesced, which has enormous implications for both restaurants and dining culture as a whole. These apps can charge restaurants fees that stretch up to 30 percent, imposing a burden that requires wild order volume to break even in a business that already has tight margins. They have so much power that they are now influencing the menus of restaurants, sometimes even if you dine in. The delivery workers making all of this function, meanwhile, are still paid low wages as independent contractors with no protections or bargaining power.

For diners, bringing tech even further into the restaurant industry has costs. According to a 2021 report, food-delivery apps stand alongside the social-media giants as the biggest collectors and peddlers of consumer personal data. By Domino’s own admission, Uber’s willingness to hand over customer data was a key factor in its decision to strike up a deal with the company. Even as it becomes easier and more convenient to order anything to your couch, delivery apps will continue to force restaurants to bend their operations to suit them. That matters whether you order delivery every night or have never used an app at all.

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