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Meal delivery apps a ‘game changer’ for diners and industry, say restaurateurs

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Third-party software apps that allow you to order food from a restaurant and have it delivered to your home are gaining popularity: sales are now over $2 billion annually and growth is about 15 per cent each year, according to research group NPD.

They’re changing the face of the food and beverage industry and while the end-users — folks ordering food from the app — generally love it, many restaurateurs struggle with the idea. 

Jody Palubiski is managing partner at The Charcoal Group, based in Kitchener, Ont. It’s a successful company and industry leader — you can find them on Open Table, a reservation system — but they don’t participate in a mobile app program such as that offered by Skip the Dishes or UberEATS. 

Are we training people not to come out and connect with other people and have a hospitality experience?– Jody  Palubiski , The Charcoal Group

Palubiski says both the cost of the service fee per order, which is negotiable depending on the restaurant’s location (and is between 19 and 33 per cent), and the changing pattern of customer behaviour are problematic. He wonders if customers are being trained to stay at home.

“Are we changing the industry in which we survive?” Palubiski said. “Are we training people not to come out and connect with other people and have a hospitality experience?”

Exposure versus experience

It’s a good question, but there’s also a case to be made for saying that a delivery app can result in increased promotion and mean increased revenue for the restaurant. The delivery app can be a portal into discovery, according to Xavier Von Chau, communications lead with Uber Eats Canada.

“We’ve heard time and time again that traffic can increase in restaurants because diners have discovered a restaurant they like through delivery,” Von Chau said.

At delivery company Foodora, head of marketing Matt Rice adds they’ve seen a significant increase in mobile ordering apps in the past few years.  

“I think this has opened the door to a larger pool of potential customers for restaurants, customers that would have historically picked up the phone and ordered pizza or Chinese or cooked dinner at home,” Rice said. 

Steve Allen says the apps can boost his revenue and they represent a sea change. Allen owns and operates Little Louie’s Burger Joint and Soupery in Cambridge, Ont., and calls the apps a “necessary evil.”

“A few years ago customers could choose eating here, ordering and picking up, or having it delivered without eating my bottom line. Now, there’s a whole new market. The choice isn’t just to order from Little Louie’s. It’s to order if we’re on an app. If we’re not, they will order from somewhere else. If I bail on that, I’m bailing on a huge market share I once used to be part of before the change,” Allen said.

Skip the Dishes provides a streamlined way for people to order restaurant meals online. But are we training people not to go out for dinner, wonders one restauranteur. (Skip the Dishes)

Losing control 

There is a lot of business being done. With more than a million active customers placing millions of orders each month, Skip The Dishes says they help their restaurant partners “expand their reach, serve more customers, and earn customer loyalty. In a marketplace increasingly ruled by the expectation of greater convenience and choice, online delivery provides the options more customers want,” according to information provided by the company.

That can certainly be the case, but in the third-party delivery process, restaurateurs don’t like losing control of the food and the relationship with the customer once the packaged meal leaves the restaurant, as Nick Benninger of Waterloo Ont.’s Fat Sparrow Group explains.

“We struggle with the service aspect, both the service we get from them and the service they provide our customers on the other end. I really hate losing control of that customer piece,” Benninger said.

What we find frustrating is that we can’t engage with the customer directly.– Jay Taylor, Morty’s Pub in Waterloo, Ont.

Jay Taylor of Morty’s Pub in Waterloo expresses a similar concern, though he recognizes their value. 

“We do see the potential in the app to generate more revenue,” Taylor said. “What we find frustrating is that we can’t engage with the customer directly.” 

It is not always the case that a restaurant is easily able to communicate directly with a diner who has had a problem with a delivery. Restaurateurs universally don’t like that.

Customer complaints? 

Uber Eats has partnered with more than 150,000 restaurants around the world and about 10,000 in Canada. Van Chau says customer contact depends on the circumstances of the incident, whether it’s a missing part of the order or dissatisfaction with the food.

“That’s typically managed directly through Uber,” Van Chau said. “We manage the refund or re-dispatch, depending on the consumer’s preference.”

Where there are issues, Skip the Dishes says it will “work with our restaurant partners to determine how the order was affected and follow up with the customer to ensure an overall positive experience.”

At Foodora, dissatisfied customers go through the company’s support channels, according to Rice.

“There are certain instances when a restaurant would be in touch with a customer,” he said.

Thompson Tran, owner of Wooden Boat Food Company in Kitchener, says he doesn’t want to take a risk with the quality he is trying to achieve with his food and the customer connection.

“I’m not willing to sacrifice high-quality service and food, especially when I’ve spent good money on excellent ingredients. That needs to be respected,” Tran said.

Like Palubiski at Charcoal Group, the Neighbourhood Group of Companies based in Guelph, Ont., hasn’t made the delivery-app leap yet. The Group, including Borealis Grille in Kitchener and Guelph, is concerned about frustrating potential customers, according to the group’s chief operating officer Neil Robinson.

“My biggest fear is that most orders are coming in when we are at our busiest, and that throws a huge wrench into the flow of the kitchen if you’re not used to it,” Robinson said.

On the other side of the equation, what’s interesting is that few diners likely realize the variables restaurateurs struggle with — including hefty 20 to 25 per cent fees the restaurant pays the delivery company; perhaps they don’t care: all they want is food and they want it quickly caring little about the $4 or $7 delivery fee. 

Order in versus eat out 

I asked some diners if they used a phone delivery app and what the experience was like. The vast majority of the few dozen respondents said they use one app or another, and their complaints were minor and mostly the same as if they were actually in the restaurant.

For example: the food was not hot enough, part of the order was missing, or they simply didn’t like the dish. French fries, whether delivery or you take-away yourself, really can’t survive a 15-minute drive.

The apps, it should be pointed out from the diner’s perspective, can address important accessibility and preference issues: a few people described to me that they had difficulty with mobility, didn’t have a car, or, in one case, was a pregnant mother with trouble getting around. These are all good reasons why a delivery app is useful.

As with all disruptive commercial technologies, a disconnect between merchant and consumer has been created where there wasn’t one before. It’s transforming the food industry, virtually all restaurateurs agree.  

“It’s game-changing, and we have to deal with it,” Taylor said. “Everything is a learning curve.”

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The ‘Maple Majestic’ wants to be Canada’s homegrown Tesla

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Look out Tesla, Canada has a homegrown electric sedan on the way. Well, that’s if AK International Motor Corporation can drum up enough investment to make its EV a reality. Dubbed the “Maple Majestic,” the vehicle is a battery-electric designed to “excel in extreme climate performance without adversely affecting the climate, as befits a vehicle from Canada,” according to its website.

What’s in a name? — The company says the maple leaf is a “symbol of Canada’s warmth and friendliness towards all cultures,” while “majestic” refers to the country’s “status as a Constitutional Monarchy.”

That patriotism carries over into Maple Majestic’s parent company’s lofty goals. AK Motor founder Arkadiusz Kaminski says he wants the company, which he founded in 2012, to become “Canada’s first multi-brand automotive OEM,” and that the “Maple Majestic is intended to be Canada’s flagship brand of automobiles on the world stage.”

Partnerships are key — “We acknowledge that the best chance for the Maple Majestic brand to succeed, lies in continuing to build the relationship with Canada’s parts suppliers and technological innovators, whether they be academic institutions, corporations, or individual inventors,” the company explains. “We are currently seeking partners in automotive engineering, parts manufacturing, automotive assembly, electric propulsion technology, battery technology, autonomous technology, and hybrid power generation technology.”

In other words, don’t expect to be able to buy a Maple Majestic any time soon… and don’t expect to pour over 0-60 mph times, power output, range, or other key stats, because those don’t currently exist. For now, all we have are pictures and a short video clip. But at least those are arresting.

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PE-backed Quorum Software to merge with Canadian energy tech firm

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Houston-based energy technology company Quorum Software will merge with a Canadian tech firm to bolster its presence in oil and gas services.

Quorum announced Feb. 15 it plans to merge with Calgary, Alberta-based Aucerna, a global provider of planning, execution and reserves software for the energy sector. The combined firm will operate under the Quorum Software brand.

Gene Austin, CEO of Quorum Software, will continue in his capacity as chief executive of the combined firm. Austin, former CEO of Austin-based marketing tech firm Bazaarvoice Inc., became CEO of Quorum in December 2018.

Aucerna co-founder and CEO Wayne Sim will be appointed to the Quorum Software board of directors. Both companies are backed by San Francisco- and Chicago-based private equity firm Thoma Bravo.

“Over the last 20 years, Quorum has become the leading innovator of software deployed by North American energy companies,” said Austin. “Today, Quorum is expanding the scope of our technology and expertise to all energy-producing regions of the globe. Customers everywhere will have access to a cloud technology ecosystem that connects decision-ready data from operations to the boardroom.”

In addition to the merger announcement, Quorum Software announced it had entered into an agreement with Finnish IT firm TietoEvry to purchase TietoEvry’s entire oil and gas business. The agreement, which includes hydrocarbon management, personnel and material logistics software and related services, is valued at 155 million euros, or $188 million, according to a statement from TietoEvry.

“Our three organizations complement each other — from the software that our great people design to the energy markets where we operate,” said Sim. “Our new company will be able to deliver value to our stakeholders, while accelerating the growth of our combined business and the energy industry’s software transformation.”

The combined company will serve over 1,800 energy companies in 55 countries, according to the announcement. With its headquarters in Houston, Quorum will continue to have a significant presence in Calgary and in Norway, the headquarters for TietoEvry’s oil and gas software business. Quorum will have other offices throughout North America, Latin America, Europe, Asia and the Middle East.

As of Sept. 30, 2020, private equity firm Thoma Bravo had more than $73 billion in assets under management. In late December 2020, Thoma Bravo agreed to acquire Richardson, Texas-based tech firm RealPage in a roughly $10 billion acquisition.

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Piece of Kitchener technology lands on Mars on Perseverance rover

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KITCHENER — A piece of Kitchener technology has landed on Mars, thanks to NASA’s Perseverance rover.

The rover settled on the planet’s surface on Thursday afternoon. It’s been travelling through space since it was launched from Cape Canaveral, Fla. in July.

“The whole idea of being on a device that we’re sending to another plant with the express mission of looking for traces of past life, it’s pretty mind boggling actually,” said Rafal Pawluczyk, chief technical officer for FiberTech Optica.

The Kitchener-based company made fibre optic cables for the rover’s SuperCam that will examine samples with a camera, laser and spectrometers.

“The cables that we built take the light from that multiplexer and deliver it to each spectrograph,” Pawluczyk said.

The cables connect a device on the rover to the SuperCam, which will be used to examine rock and soil samples, to spectrometers. They’ll relay information from one device to another.

The project started four years ago with a connection to Los Alamos National Lab, where the instruments connected to the cables were developed.

“We could actually demonstrate we can design something that will meet their really hard engineering requirements,” Pawluczyk said.

The Jezero Crater is where the Perseverance rover, with FiberTech Optica’s technology onboard, landed Thursday. Scientists believe it was once flooded with water and is the best bet for finding any evidence of life. FiberTech’s cables will help that in that search.

Ioannis Haranas, an astrophysicist and professor at Wilfrid Laurier University, said the rover isn’t looking for “green men.”

“They’re looking for microbial, single-cell life, any type of fossils and stuff like that,” Haranas said. “That’s why they chose a special landing site. This could be very fertile land for that.”

“It’s very ambitious,” said Ralf Gellert, a physics professor at the University of Guelph.

Gellert helped with previous rover missions and said it’s the first time a Mars rover has landed without a piece of Guelph technology on it. While he’s not part of Perseverance’s mission, he said the possibilities are exciting.

“Every new landing site is a new piece of the puzzle that you can put together with the new results that we have from the other landing sites,” he said.

“It’s scientifically very interesting because, even though we don’t have an instrument on that rover, we can compare what the new rover Perseverance finds at this new landing site,” he said.

Now that Perseverance has landed on Mars, FiberTech is looking ahead to its next possible mission into space.

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