When it comes to maximizing your profits, particularly in light of the COVID-19 pandemic, getting your restaurant on Uber Eats or GrubHub sounds like a no-brainer. But with third-party delivery apps like Doordash, Postmates, and Caviar, there's more to it than just signing up: it’s more about if your restaurant can afford the fees, if your kitchen can handle the extra orders, and if your food can handle being delivered.
The exploding growth of digitized delivery can give any restaurant owner FOMO (Fear Of Missing Out). A recent study by US Foods showed the average person has two food delivery apps and uses them three times per month. However, if you’re paying fees up to 30 percent, it’s possible that third-party delivery services should be the finishing salt on your filet, not the meat of your operation.
Delivery apps should be added to what restaurants do, explains Ray Camillo, CEO and founder of Blue Orbit Restaurant Consulting, “But it shouldn’t be their primary sales vehicle because their fees are big at 25 to 30 percent.”
There’s no denying delivery is going digital, but restaurant owners need to know how delivery apps, like GrubHub, work for restaurants before they join the platforms.
Research Before Joining
Each app operates differently. How GrubHub works for restaurants isn’t how Uber Eats or Postmates works. It’s up to owners to figure out if the fees are worth it, if the app works for their customer base, and if their food can handle the process.
When you’re considering getting your restaurant on Uber Eats or GrubHub, for example, consider what the ordering process is like for customers: How long are delivery times? Is the customer service stellar? And how are customers treated in the app? Research what’s out there, and ask other restaurant owners in your city about their experience.
“It’s important you vet the options,” explains AJ Cole, senior business development executive at Safe2Save, “Not all of them are equal, and in your area, it may be different; certain regions might have better experiences with GrubHub than maybe Uber Eats or vice versa…do some research on your market.”
Who Should Work With Third-Party Delivery Apps?
If the apps align with your business goals, they can be a wonderful way to get more eyeballs on your brand, Cole explains. Also, if your food can handle the bumps of a car ride, getting your restaurant on Uber Eats, GrubHub, Postmates, DoorDash, or Caviar may be a good business strategy.
Belong to a national franchise? Camillo says that can coincide well with how delivery apps work for restaurants. For example, he says McDonald’s negotiated down their fees to 15 percent by agreeing to give the third-party app access to all its locations.
“Unless you're the highest end of restaurants, you have to be in [the delivery app] game. People want better delivery options,” explains Rick Camac, Dean of Restaurant and Hospitality Management at the Institute of Culinary Education. If your check averages about $40, he recommends getting on a third-party delivery app.
“If you get into that game, your delivery could change from 25 percent of your business to over 50 percent. Some of the numbers that I'm seeing out there are just unbelievable,” Camac adds. However, even if how the apps work seem to align with how you run your restaurant, there are specific pitfalls to know ahead of getting on the platforms.
Drawbacks with Third-Party Delivery Apps
High Fees and Pricing
Experts say there’s no way around the fees, as the apps don’t allow you to increase your prices to cover fees. That means your food has to be priced right before getting your restaurant on GrubHub or UberEats, and you have to offer the right types of dishes.
Overloading the Kitchen
If you’re already running an exceptionally lean operation, where tickets are being pumped through the kitchen constantly even on a “quiet” night and the back-of-house staff is constantly busy, the extra load from delivery orders could be unsustainable and decrease the overall quality of the restaurant experience. Longer wait times, both for dine-in and delivery orders, will likely have a larger negative impact on your restaurant than the convenience of delivery likely provide.
No Control Over the Food, Dining Experience, or Drivers
If your kitchen can handle the extra orders, that does not mean that you can maintain the same quality of food as the dine-in experience. “You have no control over the food once it leaves the restaurant,” explains Camillo, “The food [can arrive] late and cold, you don't have control over the driver, and the [customer] is paying a premium because they're paying for delivery plus a tip.”
“Also because they tip before they receive the food, [customers] could get it an hour and a half later, but they've already tipped 15 percent and think that because they tipped, they get something in return and they don't; it just makes them mad,” he adds.
When you work with third-party apps, you’re also working with their drivers. And that can include dealing with them tampering with your food or failing to provide top customer service as shown by these revealing US Foods study stats:
- 28 percent of delivery drivers admitted to taking food from an order
- 34 percent of delivery drivers stayed in the car and passed the food to customers through the window
- 29 percent of delivery drivers refused to bring the order to the door
Complaints Come Your Way
Orders get canceled, lost in cyberspace, or dropped off at the wrong home, but your restaurant is who is perceived to be at fault. “Customer service really comes down to problem mitigation or problem resolution,” explains Camac, “[The app is] your interface for your client; this may be a client who has never been to your restaurant before.”
Is it Better to Start Your Own Delivery Service Instead?
When it comes to spinning up your own band of drivers, experts are split. Camillo says delivery is tough, even when you control the food, experience, and drivers. Plus it adds a lot of costs and logistics.
“[Starting your own delivery service] has its own issues,” Camac adds, “Is it less expensive? 100 percent less expensive, but what’s realistically going to happen is the third-party vendors are going to start coming down more in price and making it more palatable for people to use them.”
For Cole, getting your restaurant on GrubHub or Uber Eats is simply following along with the shift in society; “It's going to be a game changer to be on a delivery app and get to people across town that it would take them 30 minutes in public transportation [to get to your restaurant], whereas it's only 15 minutes for somebody to drop off that order.”
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