A year ago, Club holiday, a subscription-based service set to reshape the food delivery industry, emerged from stealth with $3.5 million in seed funding and backing from high-profile investors including General Catalyst and Pika Capital. Co-founders Atalla Atalla, Ghazi Atalla and Chris Miao said that by working with hundreds of restaurants to create affordable meals, they can offer delivery for as little as $5.99 per dish plus $2 shipping (and $1 per dish). food orders).
Business seemed to be going well, even hiring travel bloggers for commercials on TikTok. But earlier this year, subscribers started seeing higher tabs and fees. Then, over the past few months, Club Feast has phased out its consumer offering entirely in favor of corporate catering, leaving its original customers food credits they say they can’t use.
“The advertised price didn’t last long, and by the time I stopped using the service, the prices were the same as Seamless and Uber Eats,” a former Club Feast user told TechCrunch via Twitter. “I would literally look into [mobile] app and price was different. Then they tried to say that it was because of the increase in the price of ingredients, etc., [but] the problem for me was the lack of transparency and accountability.”
Cheap food delivery
At launch, Club Feast offered patrons to sign up for a weekly meal plan and order lunch or dinner a few hours in advance. Subscribers received a set amount of food credits that could be topped up, suspended, or spent at any time. Club Feast partner restaurants offered a choice of four or five meals, which was between $8.50 and $9 including fees — or less for customers enrolled in a $7.99 per month Feast Pass plan who got rid of the fee for delivery.
The idea was to give restaurants a measure of how much they buy so they can plan ahead and cook economically, passing the savings on to diners. While operators were accepting lower margins on Club Feast meals, they did so in the expectation that higher order volumes would offset this. Club Feast’s cyclist drivers were also more predictable than with on-demand platforms, in that routes were chosen for “efficiency” and food was delivered on a regular schedule.
January 2021 interview with TechCrunch, Atalla Atalla said that while Club Feast may eventually introduce more expensive fine dining, the base price will remain the same. “We want to make sure this doesn’t affect the $5.99 concept,” he said.
There was reason to believe that Club Feast would keep its promise. Atalla Atalla is also the co-founder of a restaurant rewards company. Sitting, which claims to have generated tens of millions of dollars in revenue for its restaurant partners. And Club Feast has been in the process of expanding throughout the year, adding New York and the larger Bay Area to its delivery areas after launching pilot projects in San Francisco and San Mateo.
But the calculation at some point changed. By mid-2021 food prices increased up to $6.99. Club Feast then began introducing an 18% service charge and changed its shipping model: customers could opt for faster shipping in exchange for a variable fee (from $0.49 to $3).
Companies are constantly adjusting prices, especially in a difficult market where subscriber growth is key. There is nothing unusual about this. Just last month DoorDash increased minimum order quantity for free shipping. But according to customers who spoke to TechCrunch, Club Feast went wrong.
One customer said that the price of a main course rose to $8.50 in February; a product at another restaurant rose to $9.99 by early March. A second customer said that he was repeatedly charged higher shipping fees even when he opted for a wider delivery window.
Around this time, some Club Feast couriers complained on social networks that they are not paid in a timely manner for additional deliveries in addition to the planned routes. One said that Club Feast promised to send a log list, but never did. Others lamented no payment history, shift pay estimates, and tip visibility in the app.
Club Feast – perhaps in search of alternative lines of business – began to promote large-format group and family bookings. A few months later in 2022, customers found they couldn’t use their credits to place dinner or weekend orders. Soon they couldn’t place orders at all.
Business model change
Several customers told TechCrunch that the app and website mysteriously stopped working in June. Those who bought food credits could not use the credits. Some have received full or partial refunds, but others are still being charged for weekly subscriptions and have not been able to close their accounts.
“I tried to get through [to customer service]and was told that my subscription was canceled and the refund was processed… I didn’t get a refund,” one TechCrunch customer told via email. “I contacted again and was told again that my refund was being processed and I need to be patient… If the goal is to make it harder for people to get refunds, it succeeded.”
This reporter repeatedly tried – and failed – to sign up for a new Club Feast account. companies Frequently asked Questions reflects the old business model, but the Club Feast homepage has been rebranded to advertise new (as of July) corporate catering services: $60 per month per employee for one meal delivered every week, up to $300 per month per employee for five meals food per week.
Meanwhile, subscribers say the customer service chat feature on the Club Feast app has stopped working.
In a recent interview Ghazi Atalla told Food on Demand News that the plan was to scale Club Feast into new markets during 2022 and 2023.
Work wiring for Club Feast food delivery drivers remain open on various boards, and the LinkedIn company page lists more than 100 employees. Club Feast also recently raised capital, raising $10.25 million last May from General Catalyst, Grishin Robotics, Modern Venture Partners, Eric Feldman and Pika Capital in a “Seed Round II”, bringing the total raised to $13 .75 million dollars.
After being commented via LinkedIn, Atalla Atalla stated that Club Feast made an attempt to refund any customer who made a request and said that anyone who does not feel they have their money back can write to him personally.
“[Refunds] Stripe took a few days to process… delay [also] could be due to their banking processing, which created some confusion,” he said. “In terms of the rollout, we are focusing more on our corporate clients as we have seen the huge demand for food as an advantage that should be a perk to return to the office. Our pricing policy allows any company to offer great tasty meals to their team members while supporting local restaurants. In the past six months, we have increased business to business by over 600%.”
Club Feast’s messy change of direction comes at a turbulent period for the food delivery industry as a whole. This week Just Eat Takeaway was forced write off GrubHub’s worth of billions just a year after buying the group. A forward-looking food delivery concept focused on hospitality, The Butlerabruptly closed earlier this year. And in early July, ChowNow was fired. near 100 employees, which the CEO described as a response to deteriorating capital.
Credit: techcrunch.com /