Silicon Valley startup Delivery Collective is betting that AI chatbots can crack a notoriously challenging problem in the food delivery world: cost. The company is aiming to offer a restaurant selection comparable to industry giants, but at a lower price point, by leveraging chatbots like ChatGPT to handle orders.
A New Recipe for Food Delivery?
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Delivery Collective hopes to disrupt the market with AI-powered ordering and a streamlined approach to restaurant partnerships.
- The food delivery market is dominated by DoorDash and Uber Eats, despite high costs for restaurants and consumers.
- Delivery Collective aims to undercut competitors by streamlining restaurant acquisition and utilizing AI chatbots for ordering.
- The startup is partnering with point-of-sale (POS) system providers like Toast and Square to quickly onboard restaurants.
- Bites, Delivery Collective’s app, is currently in the review process to join ChatGPT’s app store.
For years, consumers have complained about the rising costs of food delivery. restaurants frequently enough mark up prices on third-party apps to offset commissions-typically 20% to 30%-and customers then face delivery fees and tips on top of that. Despite the expense, the convenience of delivery has made it a mainstay for many.
Instead, the company is focusing on partnerships with POS suppliers like Toast, Square, NCR, and PAR, which already work with tens of thousands of restaurants.
A POS-Friendly Approach
Delivery Collective pitches a “decentralized” marketplace to POS providers, arguing it can definitely help them counter the growing influence of third-party delivery apps-and even DoorDash’s expansion into reservations and POS systems. Orders woudl flow through the POS system as usual, with the POS receiving its standard cut and the restaurant retaining customer data, a benefit not typically offered by traditional delivery apps. Delivery Collective would charge restaurants a flat $1 per transaction.
“We don’t want the POS companies to see us like a DoorDash or Uber Eats,” Subramaniam said. “We are an insider.”
Betting on AI Chatbots
Generating consumer demand is a major hurdle for any new delivery service. Delivery Collective is placing its bet on the emerging trend of AI-powered shopping. The idea is that consumers will increasingly use chatbots like ChatGPT and Claude to find and order goods, rather than relying on traditional search engines.
delivery Collective’s app, called Bites, will allow customers to browse restaurants, order, and pay directly within the ChatGPT chatbot interface. The app is currently undergoing review for inclusion in ChatGPT’s recently launched app store. Restaurants are automatically opted into the Bites marketplace through the partnership with POS suppliers, and orders will include the $1 transaction fee.
While DoorDash, Uber, and others are likely developing similar chatbot integrations, Bites aims to stand out by offering the best selection and lowest prices, with AI optimized to find the best deals for users. Currently available in the Bay Area, Bites has approximately 600 restaurants listed and recently reached $10 million in gross marketplace volume. The company initially acquired restaurants through direct outreach, but plans to scale through POS partnerships.
Bites currently relies primarily on drivers from other delivery apps, with a fleet of about 50 couriers of its own. Subramaniam indicated that addressing the driver issue is a future priority.
The delivery puzzle is complex, and it remains to be seen whether Delivery Collective can disrupt the dominance of existing players. The AI commerce landscape is still evolving, and success is far from guaranteed. However, the startup’s approach represents a creative and grounded attempt to improve a system many consumers find frustrating.
