For Boulder foodies, it was the press release heard around the world: After 14 months and $164,000 in support from the city, the restaurant-owned meal delivery subsidy Nosh Boulder announced on Feb. 13 it would cease operations immediately. What seemed on the surface to be a competitive co-op alternative to giants like DoorDash and Uber Eats was gone overnight.
Perhaps no one was as surprised as Nick Graham, director of operations at Nosh. He became aware of the decision from company founder Gleidson Gouveia just a couple days before the news went public. For the 29-year-old Longmont resident who cut his teeth in commercial kitchens across the Midwest and northern Colorado, the closure was a disappointing conclusion to a radical experiment in Boulder.
But Graham is holding out hope that the suspension of operations won’t spell the ultimate end for cooperative food delivery in the city. Nosh NoCo continues to serve northern Colorado, an operation Graham hopes to “bulletproof” as the company recalibrates in the wake of the recent closure. In a Feb. 24 interview with the Boulder Reporting Lab, he talked about what went wrong here, what he would do differently and what the chances are for a future homegrown challenge to third-party food delivery companies.
The following conversation has been edited for brevity and clarity.
Like a lot of people, our newsroom was shocked when we saw the press release announcing the end of Nosh Boulder. The city had recently announced it was extending its financial support for the service. We had just written a glowing profile of Nosh’s promise for the community, and its work in the wake of the Marshall Fire. When did you know things were over?
There was writing on the wall — sales weren’t as high as [ownership] wanted them to be. But I’ll be candid: It was pretty surprising for me as well. Winter is the money-making season for food delivery. We had been pushing very hard for 14 months, and had a couple of really great months where things looked promising.
When we came around to this winter, we were trying to create that padding to make it through the spring in the summer. But the owners basically looked at the numbers and saw it wasn’t what they needed to push through the rest of the year, and they decided we had to close up shop immediately just to be safe and make sure we could take care of everybody by conserving the company.
What went wrong in your view?
The competition in Boulder is crazy. There’s probably eight to 10 delivery companies: DoorDash, Grubhub, Uber Eats, Postmates, Fetch and other convenience delivery services. The amount of money those companies dropped into Boulder around the time of the pandemic was astronomical. We put up a pretty good fight, but the fact of the matter is DoorDash, Uber Eats and Grubhub have not profited one year since they’ve been founded. They lose money every year.
They are massive capital investment companies, for lack of a better term. So they bring in more investors year after year to make their numbers look good. And their goal at the end of the day is just like Uber and Lyft: They want to be the last company standing, and they can recollect their losses for the rest of their lives. It’s market share for them. At the end of the day, we couldn’t operate at a loss for as long as these companies could.
We hope that one day we can recover, look at what we’ve learned and come back and do it again. Because this fight for restaurants against third-party food delivery isn’t a one- or two-year fight. This is a 10- or 20-year fight for restaurants to take agency over their delivery and the websites that sell their food. I’m hoping we planted a seed.
Nosh seems like such a better deal for local restaurants and the local economy. The national services charge an average 30% commission, which is double what you charged. You would think Nosh could compete on that alone. Plus the apps have no relationship with the local restaurants. The drivers have no connection to the apps. And they’re seemingly paid less. Is that a fair assessment — that this should have succeeded?
I think that’s all really fair to say. I mean, especially with the attitude and mindfulness people have about their city here in Boulder. I wish I could say ‘Yes, it should have worked,’ and have that be the end of it. But obviously, you know, [the competition] did end up holding out longer than we did. That’s part of the sad reality of what happened here.
The overhead on delivery isn’t necessarily that cheap. You’d think it’d be pretty cheap. You’re delivering food. You don’t need a restaurant. You don’t need to hire cooks and servers and such. But we made it a point of paying drivers more than the other services, and of course charging restaurants less. We just weren’t able to convert the consistent orders per day to make that float long enough to grow large enough to be sustainable against DoorDash, Grubhub, Uber and the like.
Those companies have regions by which they divide the country. There’s a northern Colorado region and a Denver region — as far as I’m aware, at least. The Denver region, to my understanding, is one of the more popular regions in the country for all these companies. And Boulder is included within that Denver region. So there was a lot more money and a lot more interest here from those companies. This is more speculation, but it’s what I could tell from being on the ground.
Did you have an “uh oh” moment, when you realized the writing was on the wall?
If I had to pick one moment, I think it would just be the realization of how steep the competition is, and how quickly life moves in Boulder. I mean that in the sense of trying to get a message out there to residents and students who come and go in a fast-moving environment. And social media has obviously sped up the way people take in those messages. You can pop open the DoorDash or Grubhub app straight from an ad. It grabs people’s engagement and attention. We didn’t have those kinds of corporate marketing dollars.
Do you think the less sophisticated functionality of the Nosh Boulder app, compared to the more seamless app experience you’re describing, had something to do with the closure?
I’m sure it did. That’s also one of the trademarks of the big companies: They simply have the dollars to put out, candidly, kickass technology. They’ve got fast apps. They’ve got quick websites. As a grassroots company, we didn’t have the $10 million budget for developers to create an app. Instead, companies like ours lease delivery technology. And because we lease it, we’re a bit underneath that polished edge of a DoorDash website or app.
Looking back on these past 14 months, what would you do differently?
I’ll start with the cliche: I don’t have regrets. Despite being sad this didn’t work, everything has been a lesson learned for us to continue helping people in the future. If there’s something I wish I could have found a way to create more time to do more of, it would be continuing to build relationships with restaurants, drivers and the community. We did a decent amount of that, and it was my favorite part of the job every single day. The food delivery is pretty important, but what got me out of bed each day was trying to build a co-op with different people who were working together to fight for a future for themselves and the city.
I think the more people you get behind any kind of project, the more collective energy you have — and the more potential success you have.
What’s next for you?
I’m not too sure. But I deeply believe in Nosh and what we’re doing. We have other successful markets where we can continue to improve and continue serving people. Personally, I’m going to take two weeks off starting next week. I’ve been working pretty hard for 14 months straight here. So I’m going to reset my head, and then I’ll work with my boss to look at new opportunities for Nosh, and continue working with Nosh NoCo to further bulletproof their operation up there.
Despite this not working in Boulder at this current time, I do believe it helped plant a seed. I think there’s going to be a lot more opportunity ahead for us in the future.