Winners and losers: understanding a mutually beneficial third-party food delivery business model for restaurants and customers

Purpose The purpose of this study was to understand the factors that attract and deter restaurants and customers from entering into a relationship with third-party food delivery apps; another goal was to determine a framework for food delivery service that can benefit all stakeholders, including the end consumer. Design/methodology/approach Using a grounded theory approach, 16 semi-structured interviews were conducted with restaurant operators and customers in Canada to determine these factors. Findings Restaurants and customers are attracted to food delivery apps because of the convenient network they provide and the ability to either earn or save money. The food delivery app business model is threatened by the high costs to participate. Restaurants and consumers found the financial terms confusing and service quality low. Practical implications Food delivery app companies need to ensure that all stakeholders are benefiting from using food delivery apps to keep them committed long-term. Food delivery app companies are recommended to keep their rates transparent and fair and develop better packaging and technology to improve the food and service quality. Restaurant operators should collaborate to negotiate lower commission fees. Originality/value This is the first known qualitative study that combines the viewpoints of restaurant operators and customers as an insider perspective. As a result, it provides an understanding of the difficulties each stakeholder group faces in the food delivery app ecosystem and provides a suggested framework for food delivery app ecosystems to be viable long-term.