Steve Cuozzo, the Post's lovable crank, didn't love his first experiences with lunch start-up MealPass, but early word to Eater from both restaurants and diners has been overwhelmingly positive. The program, launched by the founder of ClassPass, allows people to prepay for all weekday lunches for a starting rate of $99-per-month. In turn, restaurants offer one dish per day. While companies like Postmates and DoorDash have experienced backlash from restaurateurs, early reviews of MealPass have been glowing — from the cost and ease of production to the marketing upside. "It’s brilliant," says Michelle Gauthier, owner of Mulberry and Vine. "It’s so easy for the restaurants."
One of the biggest wins for restaurants is the fact that MealPass users actually have to go pick up their food. It brings people into the physical space, giving the business a chance to interact with customers and showcase the whole restaurant, several owners tell Eater. "We have a brand new customer, hearing the music, seeing the decorations, seeing what other people are ordering," says Bombay Sandwich Co. owner Shiv Puri. "It's a great way to bring more awareness." Delivery start-ups like UberEats work well, but the orders feel anonymous and transactional, he adds. "It's just food," he says. "It's not an experience."
Delivery start-ups are 'just food. It's not an experience.'
Plus, MealPass users have been buying other items or bringing other people into the restaurant with them, owners say. Puri has seen people pick up up a drink or snack that's not included in the prepaid MealPass, while Gauthier has heard friends who accompany MealPass users remarking that they'd stop by on a later day. "It's definitely generating other sources of revenue that I didn't even think about," she says. In just the couple weeks since MealPass launched, the owner of La Pecora Bianca has even seen MealPass users come back for a regular meal. "You're interacting directly with the consumer of the item," owner Mark Barak says. "It's something other apps don't have."
The restaurants were also happy with the amount of money they end up handing over to MealPass. The company sends the restaurant cash for each MealPass order, which could be as low as $5 per meal. (Some restaurants declined to say the rate, while another quoted an $8-per-meal fee.) All the restaurants that Eater spoke with say the pay covered the cost of the meal, and while some noted it was less than what they normally charge, others said they do not offer a discount at all. The "marketing and exposure" line that start-ups often feed to restaurants for discounts didn't apply as much here, they say. So far, they're making money in addition attracting new people, they say. "It’s a platform that is actually generating demand for us," Barak says.
'It's a platform that is actually generating demand for us.'
Finally, logistics are easy for the restaurant, they say. Unlike many other start-ups in the industry, MealPass presets the timing and volume of the demand, meaning the restaurant is not scrambling to create more dishes or dealing with congestion at the lunch rush. Restaurants create a cap on the number of meals that MealPass users can order, and every morning at 9:30 a.m., the cooks receive an email with exactly how many meals to make and what time the customers will be coming to pick them up. "We know how many orders we have," says Hemant Mathur, owner of Haldi. "It's no stress." When it comes to adding a new revenue stream, MealPass has been one of the most seamless ways to do it, several owners say.
For the consumer, that means they will only get cold food from some restaurants, or dishes that are faster to make. Bombay Sandwich Co. has only been offering its bowls, since sandwiches take longer. Mulberry and Vine must prepare its dishes before the lunch rush starts, limiting them to cold offerings like kale salad or charred avocado. La Pecora Bianca offers its two best-selling restaurant salads because they travel well, but MealPass users won't be able to try the restaurant's pasta through the program.
Still, the selection hasn't bothered all the users. Several early adopters of MealPass tell Eater that they feel like it's been a great deal so far, with a lot of options that end up being tasty and healthy. "I'm not really sure what Cuozzo is griping about," says Ben Huang, who travels from his Midtown office to use MealPass. He's ordered lunches ranging from a Cobb salad from Dos Caminos to pulled pork sliders from The Hog Pit, and some days, he struggles to pick between interesting choices, he says. Eater reader Alex Hardy says that through MealPass, he's even been able to try several restaurants that he'd never been to before, including Mulberry and Vine.
MealPass user Dan Krenitsyn, who works in the start-up's current range near Union Square, admits that picking lunch requires a certain amount of research. "A lot of the generic names are random delis that you wouldn’t really know," he says. "Sometimes you have to search on Yelp to see where you’re actually ordering from." But he's also been able to eat a sandwich from Danny Meyer's Blue Smoke for lunch and try food from Caribbean restaurant Steel Pan, which Krenitsyn found was "surprisingly good." "Overall, it’s been honestly fantastic," he says. "If you do actually use it every day, you get the value."
If many restaurants receive the full value for their meals, it's less clear how MealPass itself makes a profit. A tipster who interviewed with the company says founder Mary Biggins told him in January that MealPass only makes money when users don't order food. "That may explain part of the reason why ordering is so difficult," he says. Biggins declined to talk about specifics of the business model. (ClassPass has been similarly elusive regarding its profits, although the company was last valued at $400 million with a more than $60 million revenue projection for 2015.) "We are building a marketplace that helps restaurants be more profitable through aggregated demand," Biggins says.
She also responded in a statement that nightly reminder emails and helping people order even after the 9:30 a.m. cutoff prove that MealPass wants people to order lunch — and aren't trying to discourage more usage. "We know that the average consumer won't get lunch every single day on MealPass because of vacation days, team meetings, etc.," she says. "However, we know that as long as a consumer gets ~12 lunches or more per month (just three per week!), they are probably saving money using MealPass."
Of course, it's still very early in MealPass's life in New York. It's only available in a limited area of the city as of now, and early adopters still pay a discounted rate of $99-per-month, which will eventually go up to $119. Issues that have popped up with ClassPass — like not enough people converting into fully paying customers — haven't hit MealPass yet. There's still time for things to look less rosy. Barak from La Pecora Bianca loves the program now, but if MealPass starts asking for more discounts, he wouldn't hesitate to drop it. "We wouldn't do it just for marketing," he says. "It’s gotta make financial sense."