The emergence of ride share services like Uber and Lyft has been a game-changer for the hospitality industry. A study by Next Level Marketing conducted last year found that 40% of on-premise patrons use a ride share when going out to bars and restaurants. “When patrons use ride shares, they typically order another drink per occasion,” says Next Level founding partner Mike Ginley.
“We’ve found that with the security of a ride home, our guests will order a bottle of wine at dinner, or head to the bar after their meal,” says Antonio Cammarata, owner of Terra Nova restaurant and wine bar in Sewell, New Jersey, as well as the Landmark Americana Tap & Grill chain, which has locations in Pennsylvania and New Jersey. “Ride shares are having a positive impact on our sales. Instead of two drinks, a customer might now opt for three. The result has been higher check averages.” Ride shares also help alleviate stress on bar workers, as staff can be less concerned about patrons getting home safely.
“Alcohol sales are up, and part of that is due to people having a safer option for getting home,” says Paul Kermizian, CEO and co-founder of Barcade, the seven-unit chain of arcade bars with locations in Connecticut, New Jersey, New York, and Philadelphia. Kermizian says his bars get higher traffic later in the evening as “people who are using ride shares are typically staying out longer than before, and spending more on alcohol.”
Nick Adams, managing partner of Kung Fu Saloon—which has six locations throughout Tennessee and Texas, including one in Austin—says Uber and Lyft have had a profound impact on his sales. He points to Austin’s year-long absence of the major ride-hailing operators (which ended a year ago) over a squabble with city lawmakers about driver fingerprinting. “Bar sales in Austin, particularly at nighttime spots, took a big hit,” he says. “Ride shares open up accessibility and are particularly important on big nights out, such as New Year’s Eve and St. Patrick’s Day.”
At Barry’s Bar and Grill in Lincoln, Nebraska, marketing manager Allison Wetig says ride shares have been a big help to the business. “We were listed as the No.-1 Uber destination in Nebraska last year,” she says, adding that a “good percentage” of the bar’s clientele uses a ride share on a typical Friday or Saturday night. “There’s usually a line of Ubers out front.”
But the impact of ride share apps isn’t always so clear-cut. Jim Fris, COO of Westmont, New Jersey-based PJW Restaurant Group—which operates 14 venues in Pennsylvania and eight in the Garden State, including the P.J. Whelihan’s Pub chain—has certainly noticed an increase in patron use of ride shares. “But it hasn’t necessarily translated into an impact in sales, negative or positive,” he says. “It reflects a general attitude toward responsible drinking.”
The impact of the apps depends on the market and its access to mass transit and taxi services, says Kermizian. “In markets where public transportation isn’t 100% reliable or available, ride shares like Lyft and Uber have definitely had a positive impact on business,” he says. Barcade operates in markets served by extensive public transportation such as New York and Philadelphia, but also has locations in New Haven, Connecticut and Newark, New Jersey. Similarly, at New York-based LDV Hospitality, marketing director Ashley Noor says, “It’s hard to know how many of our customers use ride shares, and we haven’t been able to make any assumptions because in New York public transportation has always been readily available.” The boutique hospitality group also operates restaurants and cocktail bars in other major cities—including Las Vegas, Atlanta, and Miami—and Noor adds that an impact from ride shares hasn’t been noticed in those markets either.
But Kung Fu Saloon’s Adams says the lack of a mass-transit infrastructure in Austin has been a boon for ride-share operators servicing the city’s bar goers. He estimates that on a typical Friday or Saturday night, 75%-80% of his Austin guests hire a ride share. Adams and other on-premise operators note that ride shares are often a preferred option over taxis for guests and bar staff. “With taxis, sometimes they would show up to the bar and someone other than the customer who called would take it,” he recalls. Cammarata adds, “In the past it could be impossible to get a cab. I can remember waiting around with a customer for an hour for a cab to arrive.”
On-premise operators point to little downside with the ride-share apps, although gratuities for valet staff are noticeably down. Joel Furno, president of Citrin, a valet and hospitality management company in Columbus, Ohio, says his restaurant valet business has declined by more than 50% in the last four years, mostly due to the rise of Uber and Lyft. Indeed, some bar and restaurant operators have transformed space previously reserved for parked cars to ride-share lanes.
Not surprisingly, several beverage alcohol suppliers and brands have partnered with Uber and Lyft—where legal—to promote the use of ride shares among the consuming public. Anheuser-Busch InBev’s Budweiser partnered with Lyft during the fourth quarter last year on the “Give a Damn. Don’t Drive Drunk” campaign, which provided up to a $20 credit on 150,000 round-trip rides during weekends and holidays in nine states and Washington, D.C. Heineken USA, meanwhile, partnered with Uber and Evite, the digital invitation platform, over the holidays to encourage consumers to plan ahead and book ride shares when accepting party invitations with its “Drink or Drive” campaign. The program, which was piloted in 13 markets across the country, offered $5 off a ride.
And at least one distributor has worked ride shares into its social responsibility program. Missouri’s Major Brands has incorporated ride shares into its “Safe Home After Every Occasion” campaign in recent years, and last New Year’s Eve, the wholesaler partnered with Beam Suntory to offer up to $30 in credit on 1,000 rides via Lyft and other ride-share providers. A similar offering was made for St. Patrick’s Day and Cinco de Mayo this year, and according to Major Brands’ CEO Sue McCollum, another program is planned for Halloween. “It’s incredibly important for distributors to be involved in these efforts with retailers,” McCollum says. “It’s time to take the awareness campaign and put it into action.”
Major Brands supports the effort by sending employee members of its “Safe Home Squad” into bars and restaurants, encouraging patrons to commit to safely arriving home. “It has never been easier to ensure safe rides home for consumers,” says McCollum, adding that ride shares are a part of the solution. Moreover, the ride-hailing apps are helping bar operators feel “more at ease,” she says. “I don’t know anyone who doesn’t appreciate that.”