Michael Saunders has watched the restaurant industry's relationship with food delivery evolve for more than two decades.
In 1997 he founded Dotmenu, the parent company of online food ordering platform Campusfood.com and menu site Allmenus, which was acquired by Grubhub in 2011 for $47 million. He remained at Grubhub as an executive through some of the company's most transformative years as it merged with Seamless in 2013 and went public a year later.
After leaving Grubhub in 2015, Saunders is now back in the restaurant-tech business. But this time it's to help restaurants fight back against companies like Uber Eats, DoorDash and, yes, Grubhub, who are charging fees that many restaurant owners say are not sustainable.
Two years ago Saunders and a handful of former Grubhub workers launched Captain, a startup that's just now coming out of stealth to provide restaurants with online ordering, customer insights, marketing and other digital tools. Captain works with independent restaurants to take back control of their customer growth, and improve their web and mobile ordering, SEO, web development and personalized marketing, Saunders said.
Saunders was hearing from the same restaurant owners he worked with years ago that they were getting hit with massive fees from delivery companies like Grubhub and DoorDash, and were looking for help. Grubhub, for instance, has charged restaurants fees as high as 40%, according to the New York Times, which includes food delivery but also marketing programs that can increase a restaurant’s visibility.
With Captain, restaurants can offer customers the ability to order directly from the restaurant's website and use companies like Grubhub and DoorDash only to facilitate the delivery, which greatly reduces the fees they pay, Saunders said.
"So much of their profit was being pushed away that they needed path to regain it themselves—to regain control of their business," Saunders said. "A lot of these restaurant owners are very independent minded. They opened a restaurant because it wasn’t a corporate job. And all of a sudden, they felt like they were working for somebody else. And we gave them the tools and expertise to be independent again."
Captain has worked with restaurants across the country, Saunders said, including Irazú, Aloha Poke, Blockheads and Tandoor Char House. The startup's technology is built around helping restaurants better understand who their customers are, helping them find new customers, and providing an online ordering experience that doesn't rely on one of the large delivery players.
While getting its start pre-Covid, the startup has worked to scale up in recent months to support more restaurants who have struggled during the pandemic.
"It was such a shock with Covid," he said. "People were scrambling to find a solution ... and there was really no one on the side of restaurants."
Captain currently has 14 employees, more than half of which are former Grubhub employees, Saunders said. The startup, which has yet to raise outside funding, believes it can be a "counterweight" to an industry that's struggling to survive amid increasing fees from delivery companies, Saunders said.
"Restaurants need to figure out their digital presence and run their customer relationships themselves, and we provide that for them," he said. "The real relationship needs to be between the customer and the restaurant themselves. Not the customer and the delivery guy."
