LevelUp founder Seth Priebatsch, which Grubhub acquired, suggested two paths for restaurant operators, owning vs. renting customers, at the Food On Demand Conference in Chicago today.

photo by Joe Veen

Since Seth Priebatsch, founder of LevelUp, joined Grubhub after his company’s acquisition, he’s been bombarded by requests from restaurant operators to give a discount. What he’s heard most often: “Sharpen your pencil,” he said during the second day of the Food On Demand Conference, but he joked there’s a problem with that phrase. “I’m a millennial so I’ve never even used a pencil!”

Now the head of enterprise restaurants at Grubhub, he says Grubhub is trying to figure out how to “break the dysfunctional model”in the food delivery business today, in which the restaurant operators want to own the data that third-party delivery providers collect, but the third-party folks consider that their most valuable asset.

He described Grubhub’s recent partnership with Yum Brands as an exclusive deal, in which Yum restaurants like Taco Bell and KFC use only Grubhub’s ordering platform and in turn Grubhub shares customer data with Yum and “similarly we make the best of our technology and build that into their channels.”

“This is the core crux at Grubhub,”he said, that the company is trying to wrestle with and has not yet resolved. There are two paths restaurants can take. One is to work with all delivery players, renting all players’customers and playing each player off of the other for better prices. “The whole point of Path A is to maintain leverage with all of them,”he said.

Path B, on the other hand, “for us is partnering very, very deeply in a branded channel and open marketplace scenario and building that owned customer asset.”

The Food On Demand Conference at the Marriott in Chicago ends today.

 

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