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Sprig pauses food delivery service in Chicago, lays off seven people

ICE Graveyard 28/07/2016 Megan Rose Dickey

Sprig is making some changes to its delivery model, and in order to do it as efficiently as possible, the company is pausing its operations in Chicago and laying off seven team members across its marketing and operations teams. In reviewing different aspects of the logistics behind Sprig’s delivery platform, the company realized that some customers are feeling frustrated with the lack of options available in their area.

“We set out to build an impactful service and as part of that, getting the model right is critical and I think we have a really good model right now, but there’s an opportunity to build a great model,” Sprig CEO Gagan Biyani told me.

Sprig’s delivery platform works by giving each of its drivers handful of dishes so that people can receive their meals in sometimes as little as five minutes. That’s the best case scenario, but what’s been happening lately is that customers are opening up the Sprig app and seeing that dishes are sold out because there are no drivers nearby with those dishes.

In the next few weeks, Sprig will start testing and implementing its new logistics model, which will include a group ordering feature. The most salient points, Biyani said, are that the new model will provide more variety to the customer as well as more availability.

“I think those are the two things that are the most important,” Biyani said. “We’ve built this logistics model that is fairly complex. It requires real-time prediction of geo-spatial and temporal demand. Out goal is to make it easier for us to predict that demand and also for us to deliver customers more reliability with the meals they want.”

Instead of testing out this new model in both the San Francisco Bay Area and Chicago, Sprig has decided to just focus on San Francisco, where it sees the most delivery volume. The food space isn’t an easy business, as proven by the demise of companies like SpoonRocket, Dinner Lab and Kitchit, as well as a key departure at Munchery. But it seems as if the company is making these changes proactively, as the company says it has “tens millions of dollars in the bank and years of runway,” and is approaching unit profitability in San Francisco.

“This is totally a logistical change,” Biyani said. “It’s about moving food around a city where you have high density of customers and people want your product at a given time frame. It’s very operationally intensive. The change is about becoming more efficient.”

It’s not clear when Sprig will resume operations in Chicago, nor would Biyani comment on when these changes will be implemented in San Francisco. That said, the changes will happen in stages and customers will start to notice more food options and experience fewer instances of food being sold out.

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