Digital ordering startup Olo launching Uber for restaurants

Digital ordering startup Olo launches 'Dispatch'
Digital ordering startup Olo launches 'Dispatch'

The race to be the Uber of food delivery has drawn many entrants, including Uber itself, but that is not stopping one startup from throwing its hat in the ring.

Already a digital ordering heavyweight, privately held Olo is betting a new service it announced Thursday called Dispatch will speed up food delivery and help simplify the process for large restaurant chains. It will begin rolling out in the third quarter with select clients before a nationwide release late in the fourth quarter.

"No one likes paying too much and waiting a vague amount of time for food to be delivered. If you want food, it's because you're hungry and want it delivered as quickly as possible," said founder and CEO Noah Glass during a phone interview. (It's worth noting Glass is not the same Noah Glass who co-founder Twitter.)

Olo already provides digital ordering services to more than 150 restaurant brands across the country. Its clients includes Chipotle, Baskin-Robbins and Noodles & Company.

Source: Olo

To date, it's raised $23.5 million and counts Shake Shack founder Danny Meyer as an investor.

Read More This makes people tip more at meals

Venture capital in the food delivery space has skyrocketed this year and led to a jump in competition. About $2.17 billion has piled in so far in 2015, up dramatically from $686 million last year, according to data from PrivCo.

Once Dispatch deploys, it will work with participating restaurants' existing digital ordering websites or apps. During checkout, customers will be able to scan delivery times and price quote options from the delivery providers available. Depending on the area, this could include a range of delivery service providers like Postmates, Caviar or Groupon's OrderUp.

Meanwhile, delivery giant GrubHub provides delivery services to just a small percentage of the more than 30,000 restaurants on its platform. Earlier this year, it bought two delivery service providers, DiningIn and Restaurants on the Run, as it seeks to broaden its business.

By partnering directly with restaurants, Olo's Glass wants to make the delivery process more efficient. Couriers will no longer have to wait until they arrive at a restaurant to place an order. Instead, it will automatically be sent to the kitchen, thereby shaving minutes off the process.

Customers will be able to track their couriers in real time rather than be left starring at the clock wondering when their food will arrive.

Read More McDonald's is messing with your McMuffin

It also simplifies the process for restaurants with locations in several different pockets of the country. Instead of cobbling together partnerships with regional delivery partners, restaurants can access Dispatch's national network of providers under one umbrella.

Since customers will have multiple delivery options with different prices, this additional information coupled with more efficiency for couriers could produce an added benefit—lower prices.

"It will create some price pressure," Glass said. "That is our goal—to make delivery at scale more efficient and affordable for guests."