Third Party Delivery Services for your restaurant

Scranton based website designer Pegasus Ventures brought the first small business online ordering to West Michigan, where the company got its start, back in 2005 in a partnership with a small business in Connecticut. Orders came to pizzerias by fax, a primitive service by today’s standards.

Today, a number of national companies combine online ordering with delivery. These third party delivery services copy menus from a restaurant’s website with some even starting service with no relationship with the restaurant.

These companies include DoorDash, GrubHub, Seamless, UberEats and Slice, among others.

Ads appear in print on the restaurant’s Google My Business listing thanks to agreements with Google.

Cost Effective or Recipe for Bankruptcy

A recent article in Pizza Monthly Quarterly by Michael Androw argues owners often look at the roughly 30% of sale cost of third party delivery wrong;

Say you usually make about 50 large pizzas every Tuesday night. Then, for some reason, on one particular Tuesday, everyone in the neighborhood has a hankering for your delicious pies. You end up making 60 large pizzas that night. Ten more than usual, a 20 percent increase! Congratulations! Are you now huddled on the floor in a teary heap next to the oven, crying about how difficult it was to make 10 more pies?

Androw fails to address fallout from growing percentages as the third party delivery services become a larger part of overall sales.

Miserable experience from the online ordering delivery companies

As this blog posts take a look at some the ratings with the Better Business Bureau:

• GrubHub rates a C-. With 378 reviews on the BBB website the service averages 1 of a possible 5 stars. GrubHub makes efforts to respond to the complaints on the BBB website with no visible impact on the 1 star rating.
• Oddly, Seamless sports an A plus rating with the BBB with far fewer complaints than its owner Grubhub.  The company is less known and the number of reviews and complaints is minimal.
• At DoorDash the F rating with almost 1,000 complaints including over 200 relating to billing issues, the company fails to respond to most of the complaints according to the BBB.
• Slice, the only online ordering and delivery service accredited as a BBB member earns an A plus rating with only 7 complaints, 5 of which closed in the last 12 months at this writing in May 2019. Pegasus Ventures cautions the less known and used company likely impacts the lack of complaints.
• Picking up an F with the Better Business Bureau, UberEats adds delivery service to the better known ride share company even though many of the complaints reviewed appear related to the UberEats service. Of the 4027 complaints filed over the last 3 years Uber failed to respond to 3797. The BBB also notes the state of Washington has taken action against Uber for a data breach.

Reading through some complaints a theme appears. Bad delivery experience, mismanaged credit card charges and a lack of appropriate response when customers contact the companies all feature as repeated complaints.

Needless to say the complaints to the  Better Business Bureau represent the most vexed customers unable to get satisfaction from the restaurant or the third party delivery service.

Restaurants fielding complaints take the brunt of complaints and lose business even when they are not working with the third party delivery service.

Conclusion, watch this industry as it gets its act together

Pegasus Ventures believes these companies find their way, at some point. Today it’s a mess.

With the high cost of insurance, finding drivers, and all that comes with delivery, it’s worth watching this industry.

There’s no easy answer. To really work costs need to be driven down and service must be improved.

If you are looking for advice, it’s “think hard” before heading down the road with a third party delivery service and watch the industry for improvements the model.

For those choosing to jump in, it’s going to be a ride.