In another clear sign that APIs are being used as the secret weapon to help businesses expand in highly competitive markets, Yelp and Just Eat are both focusing on APIs in order to carve out market share in the global home food delivery market.
Yelp, the popular business and location-based search directory and database with 138 million monthly users worldwide, has recently taken some steps to increase developer onboarding by adding to its developer resources. This includes introducing sample code snippets, revamping its developer Web pages and increasing API call rate limits.
Now, Yelp is seeking to become more of an API platform model, starting with the way it uses APIs to enable a new generation of home delivery services.
Two Types of Platforms at Yelp
Sheera Gendzel, from international business development at Yelp, told ProgrammableWeb:
It's worth clarifying that we look at Yelp as a platform in two different but complementary senses:
Yelp content as a platform for developers to build great local experiences powered by our API and database of over 61 million reviews, photos, business attributes and more.
The Yelp Transaction Platform provides a new way for consumers to transact directly from a Yelp business listing, allowing business owners an easier way to close the loop with their customers. Today, consumers can order food directly from the Yelp page of a number of supported restaurants. Eventually, we’ll launch similar offerings in a number of other verticals and other markets.
Offline Data Becomes Digitized Assets to Build a Platform
Michael Skok, a business analyst and VC partner at North Bridge, and Sangeet Paul Choudary, founder of Platform Thinking, both believe Yelp is signifying a more concrete move toward building out its platform approach.
Skok, who publishes an annual survey of cloud computing, now in its fourth year, believes an era of transformation is emerging, thanks to the power of the cloud. And APIs are the key tool that is making this transformation possible. He believes that if a business like Yelp can leverage its API to enable other Web services to integrate with its business data, it can become the de facto standard, signaling the potential to become a successful platform.
Choudary adds to this, explaining that there are two versions of a “data-centric, distribution-centric” platform model. The first is where a business turns offline objects into online (data) identities, Choudary says. Yelp does this by turning local businesses into a collection of data points.
Gendzel believes this is already happening with the "Yelp content as a platform" approach. She points to the thousands of companies that use Yelp’s APIs to integrate hyperlocal information on businesses into their products and services. Already a plethora of applications for the Web, mobile and, increasingly, on wearables weave Yelp’s business data into their product offerings. The new rate limits and free access to the API aim to enhance this ecosystem.
Now, Yelp is creating its Transaction Platform, which will enable transactions to occur on its platform. Choudary believes this will create a second set of data points based on how the Yelp user interacts with the business data (that is, to make bookings and pay for services, in addition to searching for content or writing reviews).
A Data-Centric, Distribution-Centric Platform Model
Choudary believes this is a second aspect to the data-centric, distribution-centric platform model. Not only is the platform used to turn offline data into digitized assets, but now it is possible to graph the relationships between user identities and how they interact with these objects.
Yelp has chosen food delivery services as the front runner for its platform move and plans on expanding this by enabling payments and bookings for dentists, spa and well-being services, and other local businesses.
Local media is a great fit for our local content. We also are increasingly seeing Yelp content in real estate and travel, using our business data to add context to a neighborhood or an area.
Restaurants, food, nightlife, shopping and local services (plumbers, movers, contractors) are also great fits.
Access to the Yelp API is free, and we're happy to consider partnering with any organization who can offer a benefit to Yelp users through integration on the Yelp Transaction Platform. The business model works well for both parties: added convenience for Yelp users who don't have to leave the site to transact, and fantastic exposure and additional business for companies who can now reach Yelp's 138 million average unique monthly visitors.
Food Delivery: A Competitive Global, Hyperlocal Market
Starting with food delivery makes sense: It is an ideal testing ground for an API platform move, as it brings together a wealth of interplaying, hyperlocal data that just wasn’t possible to leverage before the cloud.
“Maps, transit information, weather, health scores and other useful data points already feed into the Yelp experience on the app. As a part of the developers site relaunch, we also added a new section, Yelp Open Source, so developers can power their site with some of the same code Yelp uses every day,” says Gendzel.
This is what Skok means by the “transformative” cloud front: Something as seemingly ordinary as food delivery becomes a fascinating test environment to see how a customer’s demographics and personal preferences mesh with the time of day, weather and location to enable a mobile transaction for a business service. Skok says the ability to mix data on user identity, location and personal preferences, and then enable mobile payment transactions all at once just wasn’t a possibility before cloud infrastructure.
Yelp’s API platform looks to use APIs as its secret weapon in building market share in the lucrative, hyperlocal industry of home food delivery. For example, The New York Times reported last week that the profit generated by U.K. food delivery company Just Eat (which operates in 13 countries) tripled in the first half of 2014.
Just Eat: Accelerating Mobile Dev Through APIs
As a result, Just Eat is accelerating its mobile strategy, as chief executive David Buttress said that already more than 56% of orders are made through an app or mobile device.
The company uses internal and partner APIs, noting on its website that APIs “are at the center of our world, servicing the rest of the platform, our customer-facing products and several external consumers.”
“We've been focused on building an API that is optimized for use by our iOS, Android and Windows Phone apps, to ensure that the experience of using those apps is as fast and smooth as possible,” Daniel Richardson, director of engineering at Just Eat, told ProgrammableWeb. He added:
Our APIs aren't currently widely available for use by third parties, although we do provide access to some business partners, and we're always open to new ideas and opportunities.
We often receive requests to open up our API more widely, and it's something the engineering and product teams at Just Eat are keen to do.
We run regular internal hackathons where our teams make use of our APIs in interesting new ways, and we plan to start opening up our API more widely as part of hackathons we'll run in Bristol and London in the autumn. We'll invite third-party developers to participate, and we're interested to see how developers make use of our APIs. We'll use their feedback and experience to decide how and when to make our APIs more generally available.
The growth of Just Eat’s delivery services means that it is now one of the biggest Amazon Web Services customers in the U.K., and “on an average day” it expects “to handle at least 17 million API requests.”
Just Eat is recruiting to add four more API developers to its team, potentially building its internal capacity to eventually offer an open API that may help it compete against Yelp’s platform move. Richardson explains:
We're continuing to expand our engineering teams in both Bristol and London. We invest a lot of time and effort in building a great user experience across devices in our iOS, Android and Windows Phone apps, so we're hiring more engineers to work on those native platforms. All our apps rely heavily on our APIs, so we also continue to expand the number of people working on our APIs too. Increased numbers of app and API developers mean we can build even faster on the success our apps have had as we add new features and functionality to them.
Home Delivery: A Microcosm of the Hyperlocal Industry
The home food delivery market is an ideal microcosm of the hyperlocal opportunities that are emerging thanks to the cloud and APIs. Weather, time of day, user demographics, available products and location are all coming together to create never-before-realized services. Watching how Yelp and Just Eat mobilize these opportunities via APIs is an ideal observational ground for any business developing a hyperlocal and API business strategy.