Technology

Waitr buys a locally developed app, prepares to launch delivery service in Roseville

Sonny Mayugba is a local entrepreneur who last year launched a company with an app, Requested, that features dynamic pricing on hotels, airlines, etc., offering discounts on meals at off-peak hours. Requested has just been acquired by a Louisiana startup, Waitr, a restaurant delivery service. All of the Requested employees will remain at the new company.
Sonny Mayugba is a local entrepreneur who last year launched a company with an app, Requested, that features dynamic pricing on hotels, airlines, etc., offering discounts on meals at off-peak hours. Requested has just been acquired by a Louisiana startup, Waitr, a restaurant delivery service. All of the Requested employees will remain at the new company. aseng@sacbee.com

This is the story of two restaurant-related apps, one thriving in Louisiana, the other brimming with potential but struggling to catch on here in Sacramento.

Waitr, an app-based restaurant delivery service with a $6.99 flat rate, is beloved by customers on its home turf in Louisiana. Requested, meanwhile, has a novel concept that embraces dynamic pricing – if a restaurant is slow, you can make deals on food and pay with your phone – but some users find it confusing or awkward to use.

The two founders of the apps eventually got together for a meeting, saw plenty in each other’s product to admire, and soon hammered out terms for Waitr to acquire Requested. The terms of the deal remain confidential.

The ability to book a table and dynamic pricing are the reasons we bought Requested.

Chris Meaux, Waitr’s founder and chief executive officer

On Monday, Waitr will launch in Roseville, its first foray into California. But as Requested’s co-founder Sonny Mayugba puts it, this is just the start of something big.

“I see it as a multibillion-dollar proposition,” said Mayugba, who is also co-owner of the popular Red Rabbit Kitchen and Bar in midtown.

Mayugba is referring to the vast untapped business in the food delivery sector. Waitr hopes to make a play for some of that huge market, which a recent report by Morgan Stanley says is potentially worth $200 billion or more nationwide.

When Waitr launches in Roseville, it will be up against similar services including GrubHub, Postmates, Caviar and Food To You.

The food delivery business “is in the early days of a significant shift in the access-to-delivery food as various mobile internet-enabled businesses begin to scale and offer variety, speed, and convenience to the consumer” the reported stated.

The report notes that the big three pizza chains – Domino’s, Papa John’s and Pizza Hut – have realized their own significant shift in recent years, with half of orders now coming from online. New delivery companies have the chance to go beyond pizza into a variety of restaurants, and startups are already racing to grab a piece of the pie.

When Waitr launches in Roseville, it will be up against GrubHub, which aggregates online orders and charges restaurants a 15 percent referral fee, and courier services like Postmates, Caviar and Food To You. GrubHub is also shifting to a direct food delivery model in some cities.

The Morgan Stanley analysis indicates that price is generally the top reason consumers don’t get food delivered, followed by availability. Some of the delivery services that don’t have contractual arrangements with restaurants simply charge higher prices for each menu item, a practice that has frustrated many restaurateurs.

Chris Meaux, Waitr’s founder and chief executive officer, says price and convenience are among the top feature of the app. Consumers can use the app to peruse a restaurant’s menu, order food and have it delivered for $6.99. In all cases, Waitr partners with the restaurant and displays its menu on the app.

Consumers can also use the app to order food for pickup and bypass the delivery fee. Further, they can order with the app while dining in and pay through the app so they don’t have to wait for the check. Want a second drink or a piece of pie at the end of the meal? Pull out your phone and simply add it to your order.

“The benefit to the restaurants is they sell more goods and they can turn more tables in a shorter period of time,” Meaux said.

The purchase of Requested will give Waitr more features, including the ability to reserve a table and, at off-peak times, make an offer for lower pricing on food. The restaurant’s incentive to make deals? Filling seats and selling food at times the dining room would usually be empty.

“The ability to book a table and dynamic pricing are the reasons we bought Requested,” Meaux said, noting that the two apps will eventually become one, with Requested being a feature within Waitr.

The nine-person Requested team in Sacramento will remain, and Waitr has already added five employees as it readies for the Roseville launch. Waitr is already in a dozen markets in Louisiana. Mayugba’s new title is chief marketing officer.

The growth potential for Waitr is huge, Meaux said. Many of the opportunities are in suburban markets where consumers are eager to order delivery from restaurants but often have limited options. That’s changing.

“In the next 12 months, we’ll move into 30 to 40 cities and another 40 to 60 cities in the 12 months after that,” he said.

Waitr uses contract drivers in some markets, but most of the drivers will be hired directly by the company. Meaux says drivers can make $12 to $18 an hour – probably more in California – and can make their own hours. Many of the drivers come from three categories – recent retirees who thought the job market had passed them buy, stay-at-home parents looking to make extra money, and college students in need of a part-time job.

Blair Anthony Robertson: 916-321-1099, @Blarob

Get the app

The free Waitr app is available for iPhone and Android. Information on job opportunities for delivery drivers is on the company’s website.

  Comments