New Bay Area food-delivery services keep launching. Can they compete with companies like DoorDash? – San Francisco Chronicle

Juanita L., delivery driver at Bentocart, leaves a box with meals next to the front door in San Francisco.
Bay Area diners have never had more options for ordering food from their favorite restaurant.
The pandemic sparked a wave of new delivery companies connecting San Francisco restaurants with diners stuck at home. Some of these outfits have already shut down amid the Bay Area’s reopening, yet new players also continue to enter the arena. The busy landscape offers a complicated portrait of the future of food delivery in the Bay Area.
These new businesses are different from on-demand delivery apps like DoorDash and Grubhub, which deliver hot food to customers a few miles from restaurants. They typically sell cold meals, which customers purchase a day or more in advance, and either bring them directly to homes or to pickup hubs in smaller cities with less diverse food scenes like Mill Valley and Lafayette.
Plus, restaurant owners say they like working with these newcomers because they tend to charge a lower commission than the prevailing third-party apps — usually around 10% to 15% — and the preorder model allows for logistical flexibility.
Huiming Zhang, warehouse packer at Bentocart, packs a box with meals at the Bentocart refrigerator in San Francisco.
“We make a profit, they make a commission,” said Dilip Thapa of Raavi North Indian, which uses a new service called Bentocart. “We’ll do it as long as they’re around.”
Even with dining rooms back open, delivery and takeout have become a permanent fixture in the restaurant industry. According to a new national report from consulting company Deloitte, “The Restaurant of the Future: A Vision Evolves,” almost two-thirds of customers don’t plan to return to pre-pandemic habits of dining at restaurants within the next six months. Similarly, 61% of customers order takeout or delivery at least once per week, which is up dramatically from 18% pre-pandemic.
Figuring out what works with these new models hasn’t always been smooth, though.
Joseph Lai launched a delivery service called Bento Club in 2019 focused on bringing hot meals from San Francisco’s best Asian restaurants to downtown office workers, and business disappeared with March 2020’s shelter-in-place orders. He tried serving people in SoMa condo buildings instead, but it wasn’t working very well. Bento Club couldn’t drive enough business to keep some restaurants from closing.
He got an idea for a major revamp when a customer bought $200 worth of food at once. The customer told Lai that they were tired of ordering food every day, and what they really wanted was a way to order from several restaurants at once so they could stock up their fridge for the week.
Joseph Lai, co-founder and CEO of Bentocart, works on his computer at his office in San Francisco.
Last month, Lai relaunched Bento Club as Bentocart, offering meal plans that feature ready-to-heat lunches from popular San Francisco restaurants such as R&G Lounge, Daeho Kalbijjim & Beef Soup and Italian Homemade Co. Equipped with a 20-foot fridge, the company works with about 50 restaurants on developing individual-size meals labeled with dietary information with the work-from-home population in mind. Already, Bentocart has about 1,000 regular customers, according to Lai, and delivers north to San Rafael, down south to San Jose and to much of the East Bay.
Ashley Phiwjan of Tycoon Thai said there’s no downside to working with Bentocart. With the preorders, she can prepare the meals during slow hours before chilling them and driving them to Bentocart’s warehouse — much like catering.
Similarly, Thapa of Raavi North Indian said he appreciates how much easier it is to keep food cold compared to hot. With third-party delivery, he inevitably gets at least one call per day from an angry customer wondering where their food is or why their order was wrong. That never happens with Bentocart, which now comprises about 6% of his business.
Before the relaunch, Lai said he learned two important things: Variety is vital for customers, so he needs to maintain a large roster of restaurants; and volume is crucial for the company’s sustainability.
“We need to bring you enough food at once to justify the costs of having a driver go to your home,” he said. “That’s what our meal plan is doing. You commit to a week of food; then we make it work.”
Even with a pickup model like SF2Bay, which started in fall 2020 by bringing Pizzeria Delfina to Marin County, owner Tracey Forster has also learned the importance of diverse options. Instead of having a restaurant come to a certain region every week, she now rotates them in once every four to six weeks. She’s seeing customers order every week, sometimes stocking up, and she just expanded with second location in Marin.
Another pickup model success is Pastel, a pastry-focused option that debuted in the spring. Owner Amanda Nguyen was looking for a way to expand her bakery, Butter&, without the high overhead costs of a brick-and-mortar location. Hiring a driver just to bring her cakes to other parts of the Bay Area sounded too expensive, but she thought it could work if she combined forces with other bakeries. It’s been a hit, delivering buttery kouign-amann from B. Patisserie and flaky Parisian flan tarts from Arsicault all over the region, plus savory meal kits from popular pop-ups.
Some of these businesses also have stability that allows for higher pay for staffers. Pastel takes 10% commission from bakeries and adds 20% to the retail price for customers, meaning the company’s first driver can earn a salary of $75,000, according to Nguyen. Delivery service Locale, which started in early 2020 as a grassroots operation in Los Gatos and now sells meals and produce from about 80 restaurants and farms, has fixed driving routes with preorders. That allows drivers to earn $25 to $30 an hour; there’s now a wait list to get a role, according to co-founder Jonathan Friedland.
Customers, meanwhile, pay a lower cost to get the delivery. Locale, for example, charges a flat $5 delivery fee. Bentocart charges about 15%, but no tax. And Pastel bakes the fees into the listed price. Delivery apps, meanwhile, charge as much as $10 for a delivery fee plus a 15% service fee, tax and a tip for the driver.
Huiming Zhang, warehouse packer at Bentocart, scans a meal to mark it as packed at the Bentocart refrigerator in San Francisco.
“I think one thing we’ve seen is that real-time fulfillment is super, super expensive, and there’s not really a whole new way to pass on the costs,” Fiedland said. With third-party apps adding fees that can make ordering lunch easily cost $30, he said “people have realized they’re willing to wait and they’re willing to preorder.”
Despite some growth, these startups still represent a tiny slice of the food delivery market, focusing on the Bay Area and finding customers through word of mouth and social media. Locale delivers to about 600 customers per week, while Grubhub processes more than 745,000 orders per day at a national scale.
And not all of these companies are seeing growth. While meal-delivery company Feastin used to carry meal kits from the region’s most acclaimed restaurants like Atelier Crenn and Che Fico, the offerings have slimmed significantly over the past year. TuangoEats, which brought food to 13 pickup locations and had ambitious growth plans, abruptly shut down earlier this year. Neither company responded to a request for comment.
In the case of Benne, which brought meal kits from top restaurants like State Bird Provisions and Mister Jiu’s to pickup locations around San Francisco until this past summer, stopping was necessary because too many restaurant partners were facing staffing shortages.
Juanita L., a delivery driver at Bentocart, loads boxes with meals into her car at the Bentocart warehouse in San Francisco.
Still, Benne co-founder Michael Molesky said he hopes to bring it back next year because customer demand remained.
A Benne comeback would probably look somewhat different, though, Molesky said. He sees rising interest in private dining and thus opportunity in big celebratory meal kits. He also wants to explore reheatable meals that are too time-consuming for most home cooks to attempt, like a cassoulet that might require 16 hours to prepare various components.
“Restaurants are going to need an ongoing additional revenue stream that goes beyond what we thought of as the classic dining room experience pre-pandemic,” Molesky said. “In a very selfish way, I want all the great restaurants that make me excited to be a San Franciscan to still be around, so how are we going to help make sure that happens?”
Bentocart: Preorder chilled meals and meal plans from Bay Area restaurants for home delivery.
Locale: Preorder chilled meals, frozen food and baked goods from Bay Area restaurants plus grocery items from local producers for home delivery.
Pastel: Preorder treats from local bakeries plus some meal kits for pickup around the Bay Area.
SF2Bay: Preorder chilled meals from local restaurants for pickup in Marin County and Lafayette.
Assistant Food & Wine Editor Tanay Warerkar contributed reporting.
Janelle Bitker is a San Francisco Chronicle staff writer. Email: [email protected] Twitter: @janellebitker
Janelle Bitker joined The San Francisco Chronicle in 2019. As the food enterprise reporter, she covers restaurant news as well as Bay Area culture at large through a food lens. Previously, she served as a reporter for Eater SF, managing editor at the East Bay Express, and arts & culture editor at the Sacramento News & Review. Her writing has been recognized by the California Newspaper Publishers Association and Association of Alternative Newsmedia.