“Alexa, bring me a burger and fries from Shake Shack.”
It could happen sooner than you may think.
If you live in one of 20 American cities, including Seattle, New York, Atlanta, Tampa, Phoenix, Portland, San Francisco, and others, you’re already able to use Amazon Restaurants, which promises food delivery from local restaurants in under an hour. Hundreds of small, local restaurants have signed on, but not that many large chains, at least so far.
That’s about to change, though, with a newly announced partnership between Amazon and restaurant delivery service Olo. Olo has thousands of delivery customers and, more importantly, it has partnerships with several national restaurant chains, including not only Shake Shack, but also Chipotle, Denny’s, and Wingstop. Amazon has integrated into Olo’s application programming interface (API), which means these chains and others will be able to list their menus direction on Amazon and have orders route directly to their point of service systems. None of these large chains has done this yet, but with the Olo partnership in place they will likely be tempted.
Speaking of temptation, Amazon Restaurants is integrated with the Amazon Echo, which means that if you have one, you can shout out your order, or even the type of cuisine you want and your device will hook you up. It’s already been possible to order Pizza Hut or Domino’s pizza this way but with new restaurant chains coming on board through Olo, and new cities added to Amazon Restaurants over time, more people will be able to get even more yummy stuff in under an hour than can right now.
None of this has been yummy for GrubHub, which saw its shares drop about 7 percent on the news of the Olo deal, although they recovered to about a 2 percent loss. GrubHub and Seamless, which dominate the restaurant delivery app business so far, might not have that much to worry about–yet. As CNBC’s Eugene Kim noted, restaurant chains may have little incentive to sign on with Amazon Restaurants because Amazon reportedly takes a whopping 30 percent commission on orders placed through its system. Competitors such as GrubHub, Seamless, Postmates, and DoorDash charge between 12 and 24 percent.
Amazon built its business with a strategy of squeezing suppliers’ profit margins, giving customers exactly what they want, and growing too big to ignore. That approach may well help it dominate food delivery as well. It will be interesting to find out. In the meantime, I can’t wait to yell out for a peanut butter malted and have it arrive at my door.