Food 2.0: Takeout Hits the Web

By  |  Wednesday, June 3, 2009 at 5:30 pm

Turkey SandwichThe Web provides an excellent way to order food online, but it has been costly for a local eatery to process orders from the Web. Restaurants were luddites during the genesis of e-commerce; now, with the advent of new services, mom and pop are online.

Services including, GrubHub, and SeamlessWeb have made it possible for restaurants to do business without incurring the cost of doing alone. Their business models may differ slightly, but restaurants are buying in, and tens of millions of dollars worth of meals are being processed through those sites.

“Everything online has come of age, but the concept of what delivery means to life as convenience and benefit is what people now truly understand,” said Melanie Gordon-Feisman, vice president of communications for is now located in 75 cities, connecting users to the restaurants that delivery in their area.

The company has recently begun to venture into different areas such as beer and wine, drug store items, flowers, and groceries, she added. There are no restaurants listed in some cities.

To broaden its listings, has a program for users to sign up restaurants and receive a portion of the commission. It also manages a rewards system for frequent users.

GrubHub is now located in six metropolitan markets in the United States, and grossed over $20 million in sales last year, said CEO Matt Maloney. “Restaurants are good at making food, but they are not that great at doing Web sites…we help out with that immediate pain point, and bring additional benefits by leveraging our position between the user and the restaurant.”

Historically, it has been difficult for users to find a restaurant that takes online orders, he explained. “Now the user goes to one place that the restaurants are pushing information to. Users are coming to us so [that] they don’t have to research each individual restaurant, and they get more variety.”

Restaurants receive the benefit of gaining added exposure beyond flyer distribution and the Yellow Pages. GrubHub list restaurants regardless of whether they are its affiliates or not, and users can also look up restaurants from anywhere via its iPhone application.

SeamlessWeb serves 14 cities in the U.S. and United Kingdom. It offers both corporate and personal accounts. Corporate clients can set thresholds for employees, and the service produces CFO friendly reports.

The company has recently begun to leverage its negotiated relationships with restaurants to offer custom transactional services as an incentive, said sales executive Matt Oley. SeamlessWeb hosts Web sites for restaurants using its back end to process orders. Restaurants can drive people to their Web site without exposing them to competitors, he noted.

“The majority of restaurants are mom and pop single locations or have just a few locations. Many don’t have budget or time or expertise to build a web site. It can be costly,” he said. Chop’t Creative Salad Company is already participating.

Restaurants are noticing a few players that they can trust to accurately bring across orders and represent their brand, Maloney said. “They are no longer paying money each money for a static Web site that they don’t care about.” He noted that GrubHub gets indexed at the top of Google, and individual Web sites usually aren’t.

SeamlessWeb’s next step will be to integrate its system with point of sale terminals. “Our terminals use up real estate, and many times, orders have to be reentered for the kitchen, he acknowledged. “It’s been a sticking point.” The company is also exploring kiosks for apartment buildings and bars that do not serve food

The company offers a BlackBerry application, and may develop an application for the iPhone, he said.

“They key to success is to make the user happy,” said GrubHub’s Maloney. “People are hungry—they want to see a menu, and place and order. They don’t want fluff, ads, or difficult navigation,” he concluded.

Maloney may be onto something. A few years ago, it was nearly impossible to find restaurants that to orders online, and if I did find one, I stuck with that one. Then oftentimes, the restaurant would stop taking orders online.

I use SeamlessWeb several days every week to order my lunch, and have discovered great local Manhattan restaurants from its listing. My palate has expanded beyond my favorite soup and wrap at the corner deli.


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2 Comments For This Post

  1. Sophia Caraballo Says:

    We are ordering in our office every day. We use the reason that we stick with this website is because of the service. Each website you mentioned has the “same thing” but with any of them it was also “different day”. We take a great deal of the customer service (probably also because we are handling a PR services :). gives us worries free, finding restaurants that opens 24/7 that is great for those who worked crazy hours, we can also check the status of the order anytime we wish and doing so without calling anyone 🙂

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