Paper Number
ICIS2025-1907
Paper Type
Short
Abstract
Food delivery platforms have transformed the restaurant industry and consumers’ food habits. In this work, we examine the impact of these platforms on the restaurant industry market structure, classified by operational and service styles, and consumer preferences. Using several empirical techniques, we find that the entry of platforms decreases the proportion of ‘non-full-service’ (NFS) restaurants compared to full-service (FS) restaurants. We analyze Google reviews to investigate potential mechanisms and find that FS restaurants gain more first-time customers, highlighting platforms’ role in reducing discovery costs. Further, post-platform-entry, review content shows an increase in the salience of ‘service & staff’ for FS restaurants, and ‘atmosphere’ for NFS restaurants. This suggests customers view restaurants as bundles of attributes, with different standards for each attribute, rather than as integrated experiences, emphasizing attributes less central to each restaurant type. This contributes to platform-induced modularity literature and informs restaurants on how to navigate the platform-mediated environment.
Recommended Citation
Srinivas, Sandeep; Mukherjee, Ujjal; and Pant, Gautam, "Dining Disrupted: The Impact of Food Delivery Platforms on the Restaurant Industry Market Structure" (2025). ICIS 2025 Proceedings. 9.
https://aisel.aisnet.org/icis2025/sharing_econ/sharing_econ/9
Dining Disrupted: The Impact of Food Delivery Platforms on the Restaurant Industry Market Structure
Food delivery platforms have transformed the restaurant industry and consumers’ food habits. In this work, we examine the impact of these platforms on the restaurant industry market structure, classified by operational and service styles, and consumer preferences. Using several empirical techniques, we find that the entry of platforms decreases the proportion of ‘non-full-service’ (NFS) restaurants compared to full-service (FS) restaurants. We analyze Google reviews to investigate potential mechanisms and find that FS restaurants gain more first-time customers, highlighting platforms’ role in reducing discovery costs. Further, post-platform-entry, review content shows an increase in the salience of ‘service & staff’ for FS restaurants, and ‘atmosphere’ for NFS restaurants. This suggests customers view restaurants as bundles of attributes, with different standards for each attribute, rather than as integrated experiences, emphasizing attributes less central to each restaurant type. This contributes to platform-induced modularity literature and informs restaurants on how to navigate the platform-mediated environment.
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19-SharingEconomy