Would You Use an App to Pre-Order Food in the Airport?

Fly and Dine writes about new service Airgrub, an app that lets you order food, pay, and arrange pick-up from airport vendors.

They’re only in San Francisco so far and only work with “Perry’s (Terminal 1), Napa Farms Market (Terminal 2), or Yankee Pier (Terminal 3)” but plan to expand to more food outlets and more airports.

The idea is to save time on short connections while still getting your meal. Sort of like using the Tortas Frontera app for sandwiches at O’Hare.

I’m less interested in Airgrub than the analysis of whether it makes sense for a restaurant to partner with this sort of app.

  • Let’s assume that in order to get consumer adoption, the app can’t charge consumers a service fee or at least the revenue model can’t rely exclusively on consumers. Partnering with the app means a restaurant paying a fee for each order.

  • For the restaurant, whether it’s worth paying the fee depends on how many incremental orders they’ll get versus how many orders they’d otherwise receive that will now come through the app (and thus will not have to pay for, but that they’d have gotten anyway).

  • A restaurant might wish the app didn’t exist, thinking they’d only wind up paying for orders they’d get anyway. But once it exists they still feel they have to sign up…

  • …because customers with the app will order from restaurants signed on to participate, and they’ll lose those customers that would have ordered from them if no app existed.

So as long as the cost to participate is low enough that there’s still a reasonable margin on each meal (and remember, airports are generally taking a percentage of each sale in addition to rent), the dominant decision has to be to participate — or to find a reasonable narrative with which to petition the airport to keep Airgrub out.

As almost any new entrant finds, often the toughest thing about doing business inside an airport is working with the airport itself — and all of the incumbent businesses there trying to keep you out.

I certainly applaud these folks for trying. I bet though they’ll get a lot of orders from folks on planes, waiting for a gate, watching their connection time dwindle… who don’t even wind up with enough time to pick up their meals. That could be costly, especially if they wind up ‘eating’ the charges.

Personally I think this would work better for consumers (but be far more costly and labor-intensive) if they’d deliver to your connecting gate just like Taco Bell will now deliver to your home in several cities.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. My biggest problem with most airport restaurants/food outlets is non sense price they charge you for mediocre food. They basically know you have not many options and will end up paying whatever they charge. I was just flying coach between JFK and MXP and struggled between eating at the airport vs eating on the plane. I thought anything would be better than what Delta serves you on coach class international. Well, I ended up paying $12 for an individual cheese pizza that tasted like rubber with spiced tomato sauce and $4.50 for a bottle of water. That is the biggest rip off you can get. Then people complain that passengers are bringing stinky food from home on planes. Well, there is a reason for that.

  2. God yes…too much time is spent waiting in the crush of people who don’t know what they want to eat.

    Now if someone comes out with an app to reserve seating at airport bar, I would be so happy.

  3. I personally love the idea and can say that I am an incremental customer to Frontera at Ohare. As anyone that has ever had their food can agree, they are the best fast casual restaurant in Ohare. Their only downfall (to the guy waiting in line, not the business) is that everyone else knows it too. Now, I can sit in the lounge and productively wait for my order to be ready, walk up and grab my grub. Although the restaurant had to pay a fee, they got my business by me not having to wait in line. This of course only works if you have the extra time to wait, but if you are a real Bayless fan, you might even order before taking off or on the flight to ensure you’re not stuck eating stale deep dish! (guilty)

  4. @Santa: yeah, but the rent those vendors pay is insane, too. They can’t charge reasonable prices and make a profit, b/c the airports (and municipalities) are the ones really over-charging all of us. (And, as I understand it, getting supplies and employees into the airport is a real pain for the managers/owners of the businesses.)

  5. The app Tapingo does this for college campuses, basically. Seems to work pretty well in those environments in part because of the closed ecosystem of on-campus vendors. Airports actually seem similar. Curious to see how this goes.

  6. @MBH- yes, the high prices are the result of airport charges, but even more reason not to serve mediocre food, then. Cost of product for food at a regular restaurant runs 25%; for an airport outlet, it’s gotta be 15% or less. So the incremental cost to serve something better to get repeat customers is a worthwhile investment.

    @Yates- sorry, but you are not an incremental customer for this Airgrub analysis. That’s because you are not “food elastic”- you wouldn’t order from another outlet because they are on the app, you want your Frontera sandwich. The better pricing model for customers like you would be to charge a small fee for placing through the app, potentially with delivery to the gate.

    In any case, the Frontera app is powered by ChowNow, so there’s no fee per customer- only a $99/month fee per month per outlet (plus a higher credit card settlement rate)…

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