Can Delivery Work for Value Menus?
MA gig workers win, Rohlik raises $170M, top bike cities, $7 Taco Bell
Wow, we just realized we’ve been doing this newsletter for over a year! One year, one months and two days to be specific; we kicked things off on 6/26/23 with a look at delivery bot profitability, Amazon workers on strike, ghost kitchen funding and delivery hubs… oh how things change. Thanks for sticking with us as we’ve grown this community to nearly 10,000 strong!
Today:
Taco Bell Launches $7 (Sometimes) Meal Deal
Massachusetts Gig Workers Score Big Win
Chart Time | Where Bike Delivery Should Thrive
Rohlik Raises $170M for Grocery Delivery
MENUS | Can Taco Bell Deliver On Its $7 Meal Promise?
QSRs have been on a race to the bottom as of late, each trying to out-cheapen the competition with $5 and $3 value menus, hoping to reclaim some market share with penny pinching consumers. While T-Bell has offered $3 craveables and a $5 discovery box for some time, it’s now cooked up a new idea: a relatively up-market $7 Luxe Cravings Box. The promo includes a Chalupa Supreme, Beefy 5-Layer Burrito, Double Stacked Taco, chips and nacho cheese sauce, and a medium drink, for 55% less than the regular price of those items. Fully loaded you’re looking at 1680 calories, so if you throw in a dessert you’ve basically chowed down a full day’s caloric needs for less than a Hamilton.
The Big Picture: Taco Bell may be marketing this as the $7 Luxe Cravings Box, but fire up any of the 3PDs and you’ll encounter a different, far less round price: $8.54. Add in fees, more fees, tax and tip and all of a sudden this box o’ beans will set you back about fifteen dollars. This isn’t unique to T-Bell, all its competitors’ value promos suffer similar fates when you opt for delivery: McD’s $5 Meal Deal, BK’s $5 Your Way Meal, Wendy’s $3 Breakfast Meal Deal, Jack in the Box’s $4 Munchies Menu, Starbucks Pairings, KFC’s $4.99 Meal for One, we could go on… Obviously delivery costs real money, but for some of these higher priced combos, it feels like there’s a real missed opportunity to work with the 3PDs as they roll out their Summer of DashPass and Gold Days of Grubhub+ type promos, which are also oriented around value. And while some of these $3 deals are obviously too extreme a discount to deliver, restaurants could at least require customers to order them in-app, securing that valuable direct communication channel in return for some cheap meat.
POLICY | Gig Workers Get Big Pay & Benefit Gains in MA
Massachusetts reached a settlement with Uber and Lyft, requiring a minimum pay standard of $32.50 per active hour, plus $175M in fines and back pay. The settlement also includes new benefits, including one hour of sick pay for every 30 worked, occupational accident insurance and a new pooled health insurance benefit: drivers who work 15+ hours per week, for either or both companies, will be able to earn half of a health insurance stipend to pay for a plan on the state’s health exchange, while those working 25+ hours get a full stipend.
The Big Picture: The MA AG and the TNCs announced the settlement hours after the state’s courts ruled that two initiatives could appear on the ballot, one that would permanently deem drivers as independent contractors, and another one that would allow them to organize in a union. The Attorney General’s offices adds this “puts a stop to the threat of the companies’ attempting to rewrite state employment law via a 2024 ballot initiative.” But now the question remains, what does this mean for delivery workers in the Bay State? DoorDash and Instacart are also supporters of the IC initiative, which can still go forward. It’ll be interesting to see how things play out now that the “Flexibility and Benefits for Massachusetts Drivers 2024” campaign is no longer relevant to some of its biggest, more rideshare-oriented backers.
CHART TIME | Bike Friendliest Cities
People for Bikes released the 2024 edition of its best places to bike list, and the nation’s top large cities for two-wheelin’ are Minneapolis, Seattle, SF, St. Paul, Portland, Philly, NYC, DC, Denver and Milwaukee. At first glance these may sound like good places to commute by bike or tear up a trail for some exercise, but in reality these are all places where it would be oh so easy to move deliveries — food, packages, you name it — by bicycle, quadcycle or EAV. While some of these burgs have made progress in that direction, it’d be great to see other cities on the list, like Minneapolis or Philadelphia, also start enacting policies to encourage that shift.
FINANCE | Rohlik Rolls Up $170M for European Groceries
Prague-based Rohlik just raised $170 million in Series E financing, giving a shot in the arm to the grocery delivery sector. The round was lead by the European Bank for Reconstruction and Development, with participation from Sofina, Index Ventures, Quadrille, and TCF Capital as well as some debt from the European Investment Bank. Rohlik, which offers 1-2 hour delivery in Austria, Bulgaria, Czechia, Germany, Hungary and Romania, stocks 17k SKUs and hit 800k customers last year. The company claims profitability in select markets and expects to end 2024 with €1B in revenue and positive cash flow.
The Big Picture: Rohlik hasn’t released its post-money valuation, but does say it’s higher than its last round, where it was worth $1.3B, but less than $2B. It’s also worth noting that its previous round in 2022 saw it pack in $231M in new capital, $61M more than this go about. Still, this is an impressive feat when you consider that Getir just got chopped up for parts and Ocado is hurting. If there’s a lesson to be learned, it’s that SKUs trump speed, and tight operational discipline beats expensive robo-warehouses.
A Few Good Links
Well this is the actual most important news of the day — the conservative Supreme Court overturned the four decade-old Chevron decision, gutting the ability of the government to make consistent regulations / predictable environmental protections. Speaking of, here’s the dirt on how another SC decision made the ongoing CDK outage so impactful. Delivery Hero announces interim CFO. TikTok plans Prime Day competitor. EU investigates Shein, Temu for DSA compliance. Shipt scores partnership with The Save Mart Companies. Gopuff launches The Boys promo gummies. Kathmandu, average income ~$7,337.06, demands taxi drivers buy EVs. CloudKitchens’ Picnic tweaks office food court model. London builds 1-megawatt hub for sustainable delivery. Trick Dog’s GM talks hospitality. How to optimize labor costs. Yelp top sushi list shows you’ll get better sashimi in a SoCal strip mall than some highfalutin East Coast eatery. Instacart Caper Carts head to more ShopRites. Uber paying 175 people to give up driving. Interview with Grubhub’s VP of Care. Hawaii’s Bad Ass Coffee gears up for growth. Artur Express reserves 100 Kodiak AV trucks. Alibaba simplifies sourcing for SMBs. Giant Eagle updates apps with Instacart, Upside. Kroger ups dividend. BNPL-er Sezzle expands Payment Streaks. Hope for wireless EV charging? Domino’s China opens 900th store. Shipt talks retail media with Criteo. Geek+ builds tote-to-person bots for Italian pharma chain. Uber Advantage Mode offers higher earnings to safer drivers, powered by CMT data. The forgotten history of SpaghettiOs. Yelp uses AI to add alt text for images. Delivery Collective raises $3.8M. How American pizza got so good. Walgreens closing stores. Serve Robotics expands to Ktown. The State of Drone Delivery in 2024. ICYMI: our interview with ChowNow’s Chris Webb.
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