Effects of the entry of food delivery apps in the restaurant industry: evidence from Brazil

Produced by: 
University of Sao Paulo
Available from: 
January 2023
Paper author(s): 
Carlos R. Azzoni
Rodrigo M. S. Moita
Mateus Rodrigues
Marina Merlo
Arthur Fisch
Microeconomics - Competition - Productivity

Food delivery apps have become popular in recent years, with additional strength during the COVID-19 pandemic. Do these apps benefit new and more suit to delivery restaurants at the cost of harming more traditional non-delivery ones? What is the net impact on the restaurant industry as a whole? This paper investigates these questions by analyzing the impact of the major meal delivery app in the Brazilian restaurant industry. We analyze the effects of the app’s introduction on the opening and closure of restaurants and employment in the restaurant business. The app positively affected opening new restaurants, but less so during the pandemic years. It also had a negative effect on the rate of closure of restaurants, implying a net positive impact on the industry as a whole. But, again, this effect is smaller during the COVID19 pandemic. Also, restaurants increased their employment when they joined the delivery platform. At the same time, restaurants that remained out of the platform decreased their employment during the same period. The net effect of the delivery app on employment in the restaurant industry is positive but not enough to offset the general negative trend of decreasing employment.


Research section: 
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