3rd Party - Delivery Only

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In-house, third-party companies, lead generation

There are three main options for restaurant delivery: in-house delivery drivers (employees), third-party companies offering delivery only and lead generation companies with integrated delivery. See our insights about 3rd party companies that offer Delivery only.

Third-Party Delivery Only  

If you have determined that in-house drivers are not the best option for your business then this might be a mandatory option for your operation. Even though you might also choose to work with lead generation companies, do not solely rely on these type of services as you may lose a direct connection with your clientele. You can use a 3rd party company that offers delivery only to transport the orders of those consumers ordering directly from your website or calling the restaurant phone line.

Advantages:

  • Simple, Scalable, Cost-Effective – On-demand delivery services eliminate the need to build and manage an in-house delivery staff. The huge benefit is restaurants do not need to look for, hire, screen, train, and schedule a driver pool and also avoid the time and effort of payroll, insurance concerns, etc. 3rd party delivery companies handle this so there is no cumulative work for restaurant owners and their management teams. Good delivery companies should be able to understand the restaurant's volume and schedule the appropriate number of drivers for each shift. The best delivery companies will be also able to do add drivers in real-time to meet unexpected demands.

    Often these companies charge a flat fee per order, and the restaurant owner chooses how much to pass on to the diner. This flexibility allows the restaurant owner total control over their consumer pricing, and can help the restaurant to avoid paying for driver’s labor while they are sitting idle, as well as incurring bad delivery times as a result of under-staffing in an effort to cut costs.

  • Zero Liability for your restaurant – The right delivery partner will assume indemnification for driver management. Often the company contracts drivers directly under the status of Independent Contractors who accept the terms of work on their platform. Some delivery companies manage a team of drivers as employees, but often those services are only available for catering jobs. Be sure to check the company’s insurance coverage before utilizing their services. Often these services are local. Raise a red flag if you suspect the company is not compensating the drivers adequately.

  • Delivery Times and Mileage Coverage – Thriving delivery services optimize their resources by providing efficient and consistent routes to the drivers. You can take advantage of excellent delivery times from the companies working with a high concentration of other restaurants inside your restaurant’s geographical coverage. Often you can extend your mileage reach without compromising the orders for customers living closer to your establishment.

  • Dispatching and Customer Service – the delivery company is responsible for providing accurate dispatching and customer service related to the delivery times, driver behavior and food quality during transportation. Often estimated arrival times are available through the company’s technology or live restaurant support.

  • Price – The bottom line is that it is almost certain to be more cost-effective for your business to use a third-party service. Insurance costs, taxes, and mileage are reduced as well as the management time of your staff.

Disadvantages:

  • Unfamiliar Drivers – third-party companies often have a much higher turnover compared to your employees. This means that the drivers will not be as familiar with your company culture, and won’t be specifically trained by your staff. This can lead to miscommunication with smaller details like packing drinks, napkins, and utensils, etc.

    The quality of the driver will likely be very similar to employees, but make sure to ask your new delivery partner what are the terms of their driver vetting process and compensation before you trust them with your business.

  • Less Branding Exposure - though delivery only companies can help you protect your brand by not utilizing your data to convert diners to order through their app instead of your website, the restaurant still misses on the opportunity to take full advantage of offline brand exposure when comparing to in-house drivers.

    By employing drivers, the restaurateur can mandate uniforms, branded car toppers, have drivers distribute paper menus while dropping off the food, etc. Most third-party companies will not be able to offer those branding perks.

  • Communication - The restaurant and delivery company staff are subject to making mistakes. The most common are missing/wrong items which may require a re-delivery, food damaged before or after picked up by the driver, incorrect address or phone number. When these happen, it is crucial that your staff understands how to proceed to solve the problem. Choose delivery partners who can provide excellent quality of live customer service.

  • Limited Location Coverage - often delivery only companies are available locally, have a better knowledge of the market and more experienced drivers. The downside is that we haven’t come across companies operating nationwide. This might not be a scalable solution for chain restaurants operating in several markets, but it can help maintain a better quality of service and protect consumer data when compared to delivery provided by lead generation companies.

If you have determined that 3rd Party Delivery Only is the best option for your business then Jolt Delivery might be able to help. Contact our sales team if you would like further clarification.

You can also check other Restaurant Delivery Options to see what fits your needs.

Follow our post Components of Restaurant Delivery to find out more about Ordering and Customer Service options for food delivery.

3rd Party - Lead Generation with Delivery Integrated

In-house, third-party companies, lead generation

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There are three main options for restaurant delivery: in-house delivery drivers (employees), third-party companies offering delivery only and lead generation companies with integrated delivery. See our insight about 3rd Party companies offering lead generation with delivery integrated:

Third-Party Lead Generation with Integrated Delivery  

I consider this the easiest and fastest way to start a delivery business. I wouldn’t say it is the best long-term and profitable solution. Nowadays restaurants owners are still learning how to leverage these services in a positive and symbiotic relationship. I have noticed love and hate relationships. Here is why?

Advantages:

  • One-Stop Shop – marketing, online ordering, customer service and delivery are all integrated. Just sign one contract, receive a tablet and start taking orders. You may get a significant volume of online orders without any marketing efforts depending on the commission percentage on your agreement. Some companies will even offer a free online ordering widget for your website, free of any commission. There is a catch. See the disadvantages.

  • Immediate Brand Exposure, No Up Front Cost - lead generation apps are designed to attract hungry delivery diners. With large marketing budgets backed by billions of dollars in venture capital. These services have a more significant advantage over the restaurant's brands when competing for exposure. Often your restaurant can get free service if you own a famous brand. In exchange, your brand attracts more diners to the lead generation domain. The less popular brands will most likely have to pay a hefty commission (15% to 30%) to gain some traction through the platform.

  • Worry-Free Customer Service - because the customers identify more with the lead generation brand and not your restaurant. You don’t have to worry as much about the customer service aspect of the delivery orders they have sold and brought to your restaurant. Those are their customers, and they will handle the customer service, refunds, and comps. Your responsibilities are to make sure the food is of excellent quality upon the driver pick-up and ready on time. They will take it from there. All the calls and complaints will be directed to their customer service team.

  • Easy to Use Technology, Scalability and Larger Coverage - lead generation companies are investing heavily in technology, some may provide POS integrations and nationwide coverage which can be attractive for large restaurant chains.

    Delivery can be available to hundreds of U.S. markets and international markets as well covering thousands of locations.


Disadvantages:

  • Data Hungry -  The lead generation companies want the data from your loyal customers so they can convert the diner to order through their app and promote the discovery of other restaurant brands. They offer discount coupons, marketing signs and free online ordering widget (orders free of commission) for your website. All in exchange for gaining and collecting the information/behavior of your loyal clientele (a new user for their platform).

  • Driver Behavior -  most companies sign up drivers online, with little to no onboarding training and insufficient driver support. The turnover is much higher than in-house drivers or local delivery only services. There is hardly an in-person orientation. Have you ever noticed those drivers at your restaurants who seem not to know what is going on? That’s the result. Though delivery can be a simple task, it still requires some level of knowledge from the delivery drivers. Navigation skills, proper food handling, customer service, professional appearance, and equipment (bags and cart) are mandatory. Insufficient compensation and unresponsive online driver support could also play a significant role in the quality and motivation of drivers.

  • Unpredictability - their potential to subsidize promotions and drive volume can quickly overload your kitchen without warning. Often it becomes a queuing issue, surprising your staff and slowing down the dine-in service.

    Since you are not in control of the consumer demand, a slight change in the commission percentage can determine a significant volume variation.

    In other words, if you don’t agree with a commission price increase, you will lose brand exposure and access to most of their users.

  • The True Cost of Delivery - there is not such a thing as free delivery. The cost of marketing, technology, driver labor, mileage (car depreciation and gas), insurance, workers compensation and legal services is the same for everyone.

    Nowadays, data is more valuable than it has ever been. It is estimated that the cost to acquire a new delivery diner through a lead generation platform averages about $80 per person.

    When your restaurant receives a great deal on lead generation and delivery service, be conscious that your delivery partner is monetizing it somehow.

    Often passing the entire cost of delivery to the consumer by increasing the delivery fee, up marking menu items, adding extra service fees (sometimes hidden as taxes & fees), or by merely collecting customer information from your website.

    For those restaurants paying a higher commission, the cost of delivery for the consumer will be super low through the lead generation platform. That can motivate the diner to order through the led generation app instead of using your website.

If you would like chat more about your delivery options then contact our sales team. Though Jolt Delivery is not a lead generation company we can still advise and refer some of these services to you. Also, take the opportunity to check out the pros and cons of using In-House Drivers (Employees) and a 3rd Party Delivery Only company.

Follow our post Components of Restaurant Delivery to find out more about Customer Service and Ordering options for food delivery.

In-House Delivery Drivers (Employees)

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In-house, third-party companies, lead generation

There are three main options for restaurant delivery: in-house delivery drivers (employees), third-party companies offering delivery only and lead generation companies with integrated delivery. See our insights about In-House Delivery Drivers (Employees) below:

In-House Drivers (Employees)

Perhaps the most reliable option for the restaurant owner if well executed. It is a terrible idea if your staff lacks basic knowledge in the logistics of food delivery.

Advantages:

  • More control over drivers – the restaurant owner controls the hiring process and can determine the behavior expected from the drivers. It includes skill’s requirements, food knowledge, catering setup, customer service training and driver appearance (uniform).

  • Can be used where needed– often delivery drivers are given other tasks to complete when there isn’t enough volume of deliveries to maintain them busy. The most common responsibilities include cashier, assisting with ordering, packing orders, cleaning, and dish-washing.

  • Familiarity and Branding – your drivers, become part of your company culture. They will be more familiar with your menu, service, customers, and staff. When problems arise, they likely have a more direct line to management and other staff to find solutions.

  • Control Over Routing Parameters – you can determine how many orders your drivers can take at a time and which deliveries will be dropped-off first and last. Depending on the volume of delivery orders, you might want to promote an experienced driver to expedite food, dispatch and manage the driver pool.

Disadvantages:

  • Labor Intensive – managing in-house delivery drivers, requires hiring, screening (driving background checks, valid insurance), training, scheduling, payroll, and dispatching. All these represent an accumulative amount of extra work for you and your management team.

  • Liability – restaurants must ensure that drivers have personal insurance and up-to-date driver’s licenses. They must also purchase a non-owned auto insurance policy and workers compensation policy. These two can cost more compared to other staff positions in the restaurant. Mileage compensation is another common practice often overlooked in the industry. Paying mileage is mandatory in the case your employee is using a personal vehicle. Neglecting the factors above can become an expensive mistake.

  • Requires Accurate Dispatching Skills – a successful delivery operation requires proper dispatching which is often overlooked by inexperienced drivers. It is imperative to route the orders based on similar food preparation times, order size, distance, and direction. Accurate dispatching can have a tremendous positive impact on efficiency, and it creates a positive diner experience. It also helps the restaurant to optimize labor cost, delivery times and maintain the quality of the food.

  • Limited Mileage Range & Resources – the most successful restaurants operating with in-house drivers keep their delivery range under 3 miles driving distance and focus their marketing efforts within that contained area. Reaching further distances will increase your labor & mileage cost (more drivers on the schedule). It can also compromise your local delivery times and food quality. In contrast to 3rd-party delivery companies, in-house drivers must come back to base to take more orders. That means they will always come back with their car empty.

If you have determined that in-house delivery drivers is not the best option for your business then Jolt Delivery might be able to help. Contact our sales team if you would like further clarification.

You can also check other Restaurant Delivery Options to see what fits your needs.

Follow our post Components of Restaurant Delivery to find out more about Ordering and Customer Service options for food delivery.