Lyft is getting into the restaurant delivery business through a new partnership with Olo, following in the tire tracks of its rival Uber, which saw its Eats business overtake ride sharing during the pandemic.
As the operator of one of the largest transport networks in North America, Lyft’s entrance into the meal delivery space via Olo’s Dispatch product will allow restaurants to accommodate delivery for orders generated through their own websites and apps. The solution selects service providers, including in-house couriers, based on optimal price, timing, availability, and other criteria.
Dispatch enables brands to rapidly deploy delivery at a national scale with a service fully integrated into their POS platform and kitchen production systems, while strengthening direct guest relationships through their own channels.
“Direct digital orders continue to make gains in the restaurant industry as brands recognize the need to protect direct relationships with guests, and effective management of these orders is a critical component to success,” said Shalin Sheth, VP and GM of Dispatch for Olo. “With Dispatch, we help our customers enable delivery on their owned channels, using trusted partners like Lyft for local delivery. The addition of Lyft to the Dispatch network not only expands delivery coverage for our brands, but drives competitive pricing at the benefit of guests and brands alike.”
“We’re excited to enable local delivery for merchants with Olo Dispatch,” said Justin Paris, head of Lyft Delivery. “As a transportation-focused company, we aren’t interested in building consumer-facing marketplaces for groceries or food, but we can add real value in delivery both for drivers and partners via Dispatch’s frictionless process and the scaled national network of drivers on Lyft’s platform.”
In an interview with Insider, Olo CEO Noah Glass stressed Lyft isn’t “creating a clone of Uber Eats” through this partnership, as Lyft won’t have a consumer-facing marketplace and won’t be trying to sell directly to consumers like the largest third-party delivery providers.
Investors appeared to cheer the news, with Lyft shares rising from approximately $37.50/share to nearly $42/share in the days following the announcement.
“We’re excited to see Lyft partner with Olo to expand the impact of Original ChopShop’s and Bellagreen’s delivery programs running through Olo Dispatch,” said Adam Griffith, VP of information technology at Original ChopShop. “Each delivery order on our own sites is one more direct guest relationship we can keep, and the availability of drivers and competitive pricing from Lyft we experienced during its Dispatch pilot ensured our guests got their food quickly and at a competitive delivery price. We look forward to continuing this partnership with Olo and Lyft to grow both the Original ChopShop and Bellagreen delivery programs.”