Baltimore company builds on the science of food delivery

October 13, 2014|By Arthur Hirsch | The Baltimore Sun

In the age of smartphones and tablets, delivering restaurant food can be more than just taking calls, making the stuff, bagging it and sending a guy out in a rundown Toyota.

On the fourth floor of a refurbished broom factory in Canton, a room full of young men in T-shirts, polo shirts and Orioles caps work at a long table laden with computers on OrderUp, a food service with a technology twist.

They're busy with the further development of the technology that their company combined with logistical calculation to create a formula that's delivering in 36 markets from Maryland to California.

"A lot of restaurants say they do delivery, but they're not good at it," said Chris Jeffrey, co-founder and CEO who established the company about five years ago with his partner, Jason Kwicien. Son of a couple who once ran their own restaurant, Jeffrey, 33, is devoted to technology's ability to improve your meal's trip from point A to B.

OrderUp has been expanding steadily, now operates in 22 states, this year received its first big cash investment of $10 million and just gained new turf by adding 16 restaurants in Baltimore's Mount Vernon neighborhood for a total of 123 in the city. Jeffrey emphasized that the company is in the early stage of developing its business in Baltimore, but the Mount Vernon expansion gives it four strongholds, along with Canton, Fells Point and Highlandtown.

The company has 87 employees, 60 of them full time, and is looking to hire another 32, half of those in Baltimore. OrderUp charges a delivery fee to the diner of about $5, but it makes most of its money from the commissions it charges restaurants for the orders they get through its website.

Restaurateurs and diners who use the service vouch for it as a boost to business and a convenience for those who want to order in, even from restaurants that do not offer delivery.

As Jeffrey sees it, restaurateurs who don't already specialize in delivery are focused on preparing food and serving it in their restaurants — not on the fine points of logistics.

Jeffrey's company considers how long it takes each restaurant to prepare a meal, how restaurants are clustered, traffic patterns at different times of the day, availability of street parking for delivery drivers, how drivers can make several pickups and deliveries on a run.

"Our job is to make the delivery system much more efficient, picking the best driver for that transaction," Jeffrey said.

OrderUp works with dozens of drivers, each equipped with a smartphone loaded with an OrderUp app showing information for the next delivery. The drivers, who are not OrderUp employees, can accept or reject the assignment. If they reject it, the call goes out to the next best driver.

Tige Savage, managing partner of Revolution Ventures in Washington — which invested $7 million in OrderUp this year — said Jeffrey and his crew "cracked the code of how to do this in small markets."

Savage — who heard about OrderUp on a visit to Baltimore last winter — said the company fits the profile of the sort of business Revolution wants to support: enterprises using technology to shake up an existing business category. Co-founded by former America Online co-founder and CEO Steve Case, Revolution also backed the rental-car service ZipCar and Framebridge, a new Web-based business providing lower-priced picture framing.

Jeffrey "understands what consumers want and what restaurants want to make their business better," Savage said.

Customers seem to agree.

Michelle Cvach of Bel Air, who graduated last year from Pennsylvania State University, the alma mater of both OrderUp co-founders, said the service helped keep her fed through college on an array of orders for pizza, Chinese and Mexican food, often late at night.

"In college that's all I used to order," Cvach said. "It's particularly convenient for a college town. People who have been drinking don't want to go out" and risk driving drunk.

Besides, she said, ordering online and clicking on her choices make it more likely she'll get what she wants.

"I feel stuff can get messed up easily over the phone," said Cvach, who will be moving soon to OrderUp territory in Canton.

Stephen Wilhelm, who has used the service three or four times since moving recently to Canton, said it's tough enough to find a place to park when he gets home from work. If going out to eat means moving the car, he'd rather pay the food delivery charge.

"Not having to deal with the parking in Canton, the $4 [extra charge], I'll pay that," he said.

Tony Scotto, one of the owners of Towson Hot Bagels, said the restaurant's Canton location has been doing a bit less than $1,000 a week in sales through OrderUp. Much of that is small orders, as the restaurant had a $100 minimum for deliveries when it was providing its own delivery service.

"I like the idea," Scotto said. "I know my customers wanted something like that."

Ryan Herzing, general manager of Venti Tre, a casual-dining Italian chain restaurant in Canton, said customers often ask about delivery. The answer had been "no," but he's signed up with OrderUp and expects it'll be good for business.

"We just thought it was a no-brainer," said Herzing. "To be able to start a new revenue stream."

That stream only promises to expand. Food industry analysts say the takeout food market is a $77 billion-a-year business, expected to grow to $95 billion in the next five years, Jeffrey said.

"A lot of towns with a lot of mouths to feed," he said.

arthur.hirsch@baltsun.com

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