In an exclusive interview with Food On Demand, Waitr CEO Adam Price dished it out on competing with billion-dollar players, whether the “big four” delivery brands will survive, and how a fast pivot to data-based decisions is attempting to transform the fifth-largest U.S. delivery brand from choppy waters to an industry leader—with an obsessive eye on the budget.
A New Yorker who got started in the space helping big-city restaurants replace in-house delivery, Price moved to Waitr’s home of Lafayette, Louisiana, last February when he joined the company as chief logistics officer. After a quick promotion and three-month stint as COO, he succeeded founder Chris Meaux as the chief executive in August. Being uprooted from his social network has been helpful, Price said, affording him the time and mental space to solve especially hard problems—and Waitr has several.
With a national footprint focused on second- and third-tier cities that’s attracted newfound competition, the company’s shares have fallen from highs in the mid-teens to just below 50-cents a share as investors have questioned Waitr’s economic model and the industry’s prospects as a whole. Price said those paying attention will be pleasantly surprised “and maybe even stunned” at the results of his turnaround that’s centered around militant budgeting and applying data science to make the company more efficient and stretch its limited financial resources.
“I’ve been at the company for eight months … and CEO for about five months, but even in that timeframe, there’s been a massive streamlining of the operation and reduction in our overhead and focus on these budgets and controls in a way that had never been done at the business before,” he added.
Asked if the company has the time and finances to make it out the other side, Price said Waitr has a “clear trajectory” to profitability, and added that being the underdog in the space has forced it to be sustainable over the long-term, which he pitched as a significant advantage compared to larger players like DoorDash that have massive amounts of investor cash sitting on their balance sheet.
“Money on our balance sheet is correlated with time to figure out problems, and Waitr has very little time to figure out its problems,” Price said. “If we are running at 95 percent and were just going to squeeze out just 5 percent more efficiency, then I would say ‘Oh no, this is not a lot of time.’”
As a wave of analysts has begun questioning the sustainability of national delivery players, Price said the appeal of paying for convenience compared to planning meals and then going to the grocery store is “not going anywhere,” especially for young parents who have been the focus of recent Waitr and Bite Squad TV spots.
After a year in which Grubhub fell from the top spot in market share, superseded by DoorDash at a breakneck pace, Waitr believes delivering a consistently positive customer experience will determine who ultimately wins in the delivery space. While that’s a noble mindset amid a blizzard of Waitr-specific challenges, Price stressed that consistency is still a distant prospect as major delivery platforms struggle with driver turnover and anecdotal stories about unprofessional drivers.
Referencing the amount of money larger delivery players are now spending on customer acquisition and retention, via coupons and free-delivery offers, Price said delivering reliably positive experiences is a more cost effective way to gain new diners.
“We’re much more focused on the back-end consistently of customer experience, because I think that’s a much more affordable way to win the long-term game of food delivery,” he said. “It’s not that Starbucks serves the best cup of coffee in town, it’s just every time you go into a Starbucks around the world you know what you’re going to get.”
To that end, Waitr has largely curtailed its geographic expansion. Waitr and Bite Squad’s previous strategies worked very well in non-competitive markets, Price said, but those tactics aren’t “necessarily the same strategies you would use in a highly competitive space” now that larger players have expanded beyond big cities. In the current landscape, Waitr is now looking to double down in cities where it has a dominant presence.
Within the headquarters, data scientists are helping the company bolster its predictive capabilities to ensure drivers are ready to go on Friday and Saturday nights—as well as big football days—and it’s also helping the company allocate its “spend” to keep drivers happy.
Asked if the company had a need or interest in raising capital, Price replied that was “an interesting question.” As Uber, DoorDash and Grubhub move into ghost kitchens and other next-wave restaurant formats, he said additional funds could be used for similar initiatives and “automations” that he said could materially change the economics of delivery.
Sizing up the competitive landscape, Price said he’s hesitant about Postmates’ future prospects, but said “without a doubt, DoorDash, Uber Eats and Grubhub, they’re not going anywhere, and nobody’s going to crack this nut in a year.”
“Whether DoorDash was spending [in similar markets] or not, we would still be doing most likely the same types of things in our business,” he said. “Until somebody gets the consistency down in the operation, I don’t think you’ll see a very clear winner in food delivery.”
With plenty of Waitr-specific challenges, Price has his own house to worry about—amid urgent budgetary concerns—and said he doesn’t see aggregators like FoodBoss disrupting the industry until all the players have mastered delivering consistently positive customer experiences.
“While on the surface it might look like a commoditized industry just like travel or hotels,” he said. “If everybody was very consistent in service, then I think there would be a very big threat from aggregators.”