Dive Brief:

• New research from Zion & Zion shows that Grubhub is the most popular multi-restaurant delivery service with 37.8% of respondents using the app, followed by Uber Eats at 36% and DoorDash at 19.9%.
• The most frequent delivery app/site users are between 18- and 29-years-old (63%), followed by 30- to 44-year-olds (51%). People with income under $10,000 ordered via online delivery the most at 51.6% compared to any other income bracket. 
• Nearly 50% of consumers who use delivery apps have only used them once or twice in the past 90 days, while 24% used the service three or four times, and 7% ordered 11 or more times in the past 90 days. 

Dive Insight:

The report illustrates how intense competition has become in the third-party delivery space as demand for the service grows. Indeed, the report cites UBS' forecast that online food ordering may rise to more than 20% each year to reach $365 billion by 2030. Further, analysts at Morgan Stanley believe that delivery could top 40% of restaurant sales.

While Grubhub remains the biggest food delivery company, Uber Eats is the fastest-growing company. Uber Eats is catching up to Grubhub in terms of new customer revenue, and people spend the most on Uber Eats orders compared to other delivery companies in nine out of the 22 most-populous cities, according to Recode. Uber Eats grew 230% last year and yearly customer spending is now $220 million, according to the Zion & Zion report.

The tale between the two companies comes down to rapid expansion throughout major metropolitan markets across the country and partnerships with major restaurant chains. Grubhub now exists in more than 1,700 U.S. cities, while Uber Eats now covers 70% of the U.S. population. Grubhub benefits from its partnership with Yum Brands, while Uber Eats benefits from its McDonald's agreement.

Both companies continue to jockey for major differentiators as well. Uber, for example, is testing food delivery via drone. Grubhub just partnered with Honda to be part of connected dashboards inside vehicles, and the company’s recent acquisition of LevelUp should provide a robust ordering infrastructure and access to a portfolio of over 200 restaurant brands. 

Grubhub is clearly feeling the pressure from Uber Eats' growth, noting during its most recent earnings call that it will increase its incremental marketing spend to between $10 million and $20 million. 

Of course, these two companies are hardly alone in the burgeoning space. DoorDash and Postmates both pack a big punch with heavyweight partnerships of their own — Starbucks, Chick-fil-A and Subway among them. These companies also are differentiating with emerging technologies. DoorDash plans to test driverless delivery in San Francisco while Postmates is testing a delivery robot in Los Angeles.

For restaurant operators leveraging the service, perhaps the biggest opportunity to emerge from Zion & Zion report is increasing heavier usage. Currently, 7% of consumers said they ordered delivery 11 or more times, while 12% of consumers ordered five or six times in the past 90 days. Promotions tied into delivery can help increase delivery occasions. McDonald's offered limited-time free delivery in September through its partner Uber Eats, while Chipotle provided free bowls through its DoorDash partnership during the college playoff season.

The good news for delivery companies and the restaurants that use them — and perhaps the biggest surprise from the report — is the income demographic data. The heaviest users are among the lowest income earnings indicating that consumers find enough value in the convenience that delivery offers to forgive the fees the service typically includes.