Volume 19 | Issue 25 | November 3 - 9, 2006

Online takeout site boosts Downtown restaurant business

By Skye H. McFarlane

Forget wireless. The latest hi-tech trend for Downtowners is seamless— that is.

The Web site, which began as a corporate food-ordering service, is now replacing the telephone as the favorite kitchen utensil of time-starved New Yorkers.

The brainchild of New York University Law School graduate Jason Finger, SeamlessWeb began courting corporate clients in Downtown and Midtown — mostly law firms and investment banks—back in early 2000. The site offered a way for employees to order delivery from their desktop computers and charge the food directly to a corporate account. Employees working late got fed, local restaurants got more business, and companies got to avoid the headache and expense of reimbursing their employees individually. SeamlessWeb got to charge a small fee to both the restaurants and the companies.

The concept was a hit and the service began to expand beyond the suits of Downtown, entering companies of all types and sizes. In 2004 Inc. magazine named SeamlessWeb the country’s No.1 online services company. For Finger, the next logical step was to bring Seamless ordering to the masses.

In the fall of 2005, Finger launched a consumer version of the site in Manhattan. Because the site already had ties to Downtown restaurants through its corporate service, Lower Manhattan instantly became one of SeamlessWeb’s best-served areas. To date, the site works with 400 Downtown restaurants and an internet sampling shows that the average Lower Manhattan address is serviced by 86 SeamlessWeb eateries.

Seth Berkowitz, an N.Y.U. law student who lives at Third St. and Broadway, began using SeamlessWeb after Finger came to the school as an alumni speaker.

“I thought, ‘Not only is this a good business idea, I’m going to use it,’” said Berkowitz, who hopes that the law firm he joins after graduation will have a Seamless corporate account. According to Berkowitz, the only way the site could get better would be if it allowed personal users to “split the check” like they can in a restaurant.

“I always end up paying for my roommate’s food and he never pays me back,” Berkowitz joked.

For consumers, the site is free. A user simply creates an account and saves his or her credit/debit card information. With a few clicks, users can pick a restaurant (establishments can be resorted by cost, food type or favorites), read menus and order—in less than the time it takes to figure out where their roommate put the sticky stack of takeout menus.

Because the meals (and a tip of the user’s choice) get charged, there is no scraping for cash. After all, having to run to the ATM defeats the purpose of delivery. SeamlessWeb does the money processing for every order, which keeps clients’ credit card numbers safer and allows cash-only restaurants to offer the SeamlessWeb service.

Unlike similar ordering services, which center mostly around college campuses, SeamlessWeb offers more than the typical take-out fare. While there is still a heavy selection of diners and Chinese restaurants, users can also order from upscale establishments, some of which only offer delivery through the SeamlessWeb site.

Whether they serve hash or haute cuisine, every restaurant on the SeamlessWeb system must meet stringent criteria regarding quality of food, customer service and delivery times. Restaurants must be invited to join the “web,” with invitations based on diner requests.

“We take requests seriously, but the restaurant must uphold certain standards,” said Finger, saying that the customer service of each restaurant reflects back on SeamlessWeb as a service. “If you have a bad experience ordering food, to a certain extent, you’re going to blame the whole experience. If the new variable is that you used to order over the phone, you might think it’s SeamlessWeb’s fault.”

To try and ensure that each customer gets his or her food in a timely manner, SeamlessWeb requires its restaurants to have a computer dedicated to the service. When an online order comes in, the computer produces a printout with a confirmation code. If the restaurant does not confirm the order within a minute, the system generates an automated phone call to the eatery. If another minute goes by, a SeamlessWeb employee will call the establishment to remind them that an order has come in. If the computer goes down, orders are automatically rerouted through the fax machine. Restaurants must also list their expected delivery times online.

This oversight sometimes leaves restaurants feeling more like employees than clients. Sandy Kraehling, the owner-chef of Pan Latin Café in Battery Park City, said that SeamlessWeb has been quick to criticize her restaurant if it exceeds its delivery times, but slow to respond to problems on Pan Latin’s end, including computer glitches and a snafu involving misprinted delivery bags. Nevertheless, Kraehling said, SeamlessWeb’s benefits to her restaurant have been worth both the service fee and the inconveniences, which she is confident the site will solve as it becomes a more mature company.

With a small space tucked away by the Hudson River, Pan Latin gets upwards of 25 percent of its business from delivery orders. Not only has SeamlessWeb brought in more business, it has also allowed the Pan Latin delivery staff to move more quickly through the heavy security at Financial District firms.

“Without it, you’d sometimes have half-hour delays at the checkpoints…It’s a validated, approved delivery service,” Kraehling said. “It’s for the times.”

Online ordering offers advantages that both customers and restaurants enjoy. Orders, including typed special requests, come in writing. For a restaurant, this eliminates the time that an employee must spend on the phone taking an order, as well as preventing the human error caused by noise, static or language barriers.

“I like having it in writing,” Kraehling said. “There’s less room for error. How many times on the phone do you hear things wrong? It can be the twist of a letter. They say apartment 10E and you hear 10G. I could tell you stories.”

For customers, the written order provides insurance in the event that something goes wrong.

“You have written proof of what you ordered so you can say, ‘See right here. I got General Tso’s chicken. Now take it back,’” Berkowitz said.

With the resurgence of dot.coms on Wall Street, SeamlessWeb ’s profitable business model quickly gained the attention of larger companies. On June 5, 2006, food services giant Aramark acquired the site for an undisclosed sum. Finger said the acquisition was ideal because Aramark has allowed SeamlessWeb to remain relatively autonomous while giving it the resources to expand into other markets.

The corporate service is already available in 14 cities and the consumer service has recently expanded to several New York suburbs, as well as Boston, Philadelphia and Washington D.C. Finger hopes to expand the scope of the service as well, allowing consumers to order flowers, gifts and necessities in addition to food (offerings that the corporate service already provides).

The one thing that SeamlessWeb doesn’t plan to expand is its marketing campaign. Finger is a firm believer in word-of-mouth advertising and the power of a good product.

“We have relied on the value of the service to spread the word,” Finger said. “It’s more cost effective. And you trust your friends more than you trust an ad.”

Media attention hasn’t hurt either. In addition to the Inc. listing, SeamlessWeb was tagged by Deloitte as the fastest-growing internet services company in 2005 and became one of Time’s “50 Coolest Websites” in 2006.

Still, many Downtowners, including some who use SeamlessWeb’s corporate site, are unaware of the company’s consumer service. Kelly Darling, who works at Lehman Brothers (a corporate client) and lives in the Financial District, said she had no idea that she could access SeamlessWeb from her home computer. Upon learning the news, however, she said that several of her coworkers would be very happy to hear it.

“I know from talking to summer analysts, the highlight of their day is to order from SeamlessWeb,” Darling said, later adding, “I know people who literally order food from home every night.”

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