Caviar has discontinued its Fastbite service.

Avlok Kohli, founder, Fastbite, sent an email to participating companies in early May indicating that Caviar would discontinue Fastbite in San Francisco effective May 26. Orders on Caviar's main platform will not be impacted by the change.

A spokeswoman for Square, Caviar's parent company, also confirmed that Fastbite would end its run in New York City as well as in San Francisco and replaced with a new service that will provide delivery in under 30 minutes.

"We're currently rolling out a new Delivery Under 30 Minutes option to every Caviar market across the country," she said. "Given the continued progress we've made in decreasing our delivery times across the board, we are retiring Fastbite in NY and SF to offer even more ways for more diners to experience their favorite restaurants fast with the new Under 30 Minute option."

Square acquired Fastbite in 2015 in a bid to provide meals for around $15 in 15 minutes. The service focused on a limited menu with a handful of items that could be prepared by local restaurants in bulk and then quickly delivered to customers.

The food delivery space has become increasingly crowded over the last few years, with tech venture capitalists pumping billions of dollars into the market. But food is a low margin business and on-demand delivery has proven to be a logistical nightmare. As a result, several companies in the space have faltered, and it remains to be seen whether they can create a scalable business.

Last week, Sprig, the San Francisco startup with a mission of preparing and delivering healthy meals, announced that it was shutting down. This comes on the heels of Maple, the New York food delivery startup backed by acclaimed restaurateur David Chang, closure in early May. The San Francisco Bay Area startups, SpoonRocket and Bento, ended their runs in 2016.

Below is the memo sent out to San Francisco restaurants:

Hello [Restaurant],

Thank you for your continued partnership with Caviar. Effective May 26, 2017, Fastbite will be ending its services in San Francisco. We've learned invaluable lessons through Fastbite about how to deliver meals incredibly quickly and reliably -- and we're excited to apply our learnings to the core Caviar experience, across even more cities.

[Restaurant] will no longer receive Fastbite-specific orders after May 26th and will receive all payments for previous orders on June 1st. Orders from Caviar diners on our main platform will continue, unaffected.

In addition, I wanted to personally thank you for your business and support of Fastbite. Our team is thankful for your partnership, and we look forward to seeing your business grow with Caviar.

If you have any questions or concerns, please reach out to sfvendorsupport@trycaviar.com. And of course, I'm also available to you via email at [redacted].

Warm Regards,

Avlok Kohli

Founder, Fastbite

Published on: May 31, 2017