Groupon's food delivery service goes live in Chicago

The move comes only two weeks after the company bought food delivery marketplace OrderUp

Financial trends and news by Steven Loeb
July 30, 2015
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It was inevitable: once Groupon bought food delivery marketplace OrderUp, there could be no doubt that next move would be to launch its own food delivery service. It was going to come out at some point, the only question was, "When?"

The answer turned out to be quicker than perhaps many imagined. Only two weeks later, Groupon is already announcing the the launch of Groupon To Go in Chicago.

It turns out that food delivery has actually been on Groupon's mind for a while, as the program has been in pilot mode since March. It has already been tested with 500 restaurants, which have included some national chains, like Quiznos, Popeyes, Subway and Papa John’s, as well as Chicago-based restaurants, including Ditka’s Restaurant, Al's Beef, Adobo Grill, BIG & little’s, Freshii, Rosati’s Pizza, Star of Siam and Wishbone.

This being Groupon, whose entire mission is predicated on giving people discounts and deals, it doesn't just allow people to order food, but it also gives its customers at least a 10 percent discount in the form of instant cash back on every order.

Groupon is already laying out its future plans for the service, with plans to expand to new markets this year, including Austin and Boston later this fall. In the meantime, OrderUp, which has processed more than 10 million orders and is available in 26 states around the country, will continue to serve as Groupon’s delivery and takeout presence in other markets.

Eventually, OrderUp’s technology and operations platform will be integrated into Groupon To Go, with features like real-time order tracking, group ordering and the ability to schedule delivery and takeout for another date and time. 

Ehen Groupon bought OrderUp it allowed the company continue to operate as a standalone brand, and let it maintain its Baltimore headquarters. If OrderUp eventually morphs into Groupon To Go, that may mean that that brand is not long for this world.

VatorNews has reached out to Groupon to find out more about OrderUp's future, and we will update this story if we learn more. 

With this, Groupon joins other tech companies who have jumped into the growing food delivery space in recent years.

In April, Uber launched UberEATS in Barcelona, teaming up with Plateselector, a Barcelona-based food guide, and said was working with "the best local restaurants in Barcelona to create a changing selection of lunch and dinner meals that you can receive in under 10 minutes."

UberEATS was a slightly rebranded version of UberFresh, the food delivery pilot program for users in certain sections of Santa Monica, California that Uber launched in August of last year.

Square is also getting in on the action. In April it acquired Fastbit, and integrated it with Caviar, the food delivery company it bought in August of last year.  

Those companies are going head on against a slew of startups which have been popping up this space over the last few years. There are 25 in the United States alone, according to CB Insight, and these companies are raising huge amounts of money.

Sprig, an on-demand meal service, raised $45 million in Series B funding. Postmates, which started as a delivery service for restaurants that did not have their own services, raised $80 million last month. And Blue Apron, a grocery delivery service company that delivers a recipe and the required ingredients right to their customer's doorstep, raised $135 million in June. 

Obviously this is a crowded space, but given that Groupon is able to actually offer its customers a discount on their order, perhaps it will be able to go up against all of this competition. 

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