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.