It’s no secret that third-party online ordering fees have been the bane of many restaurant owners’ business operations for some time now. In a world where everything is about being online, fast, and convenient it seems like a necessary evil to have to use a third-party site to get your food out to the masses. Hiring your restaurant’s own in-house delivery fleet may sound too expensive, but it could actually save you thousands per month.
The Benefits of Hiring Your Restaurant’s Own Delivery Drivers
It Doesn’t Cost as Much as You Think
The folks at Onfleet crunched the numbers and found that hiring your own restaurant delivery fleet is 46% less expensive on average than using a third party. They came to their conclusion using public information from UberEats and Postmates on their rates per mile, and comparing that to a variety of factors including, the minimum wage of each city they examined plus 50% for fuel costs and software fees for native online ordering (more on that below).
Onfleet’s study determined that an in-house delivery fleet is 46% cheaper than UberRush and 50% cheaper than Postmates. Assuming a restaurant does a modest 2,000 deliveries per month, that’s a savings of up to nearly $8,000 on the higher end.
Avoid Third-party Fees
When you sign up for a third-party delivery service like GrubHub, DoorDash, or UberEats, the upside to this is that you’ll have almost instant access to the company’s network of delivery drivers and get your restaurant’s name in front of potential customers who browse these apps daily. However, the fees and other commission costs associated with these apps could end up costing you more than if you hired your own delivery drivers, especially if you are doing a high volume of delivery orders.
Have More Control Over Your Brand
When you hire your own delivery drivers, as opposed to using third party contractors, you can train them on your hospitality ethos. This ensures that the guests will get the same experience from the person dropping off their food as they do from the server in your restaurant. When the drivers work for you, you can also amp up the brand awareness with uniforms and branded car decals, lighted signs, or branded company cars.
Why Restaurants Should be Offering Delivery Services
Older Gen Zers (the generation classified as anyone born between 1995 and 2015) have some of the highest purchasing power right now, and 24% of them are ordering takeout or delivery 3-4 times a week. Millennials are not far behind with 21%, followed by Gen Xers (17%) and Baby Boomers (6%) who order at the same rate. As the younger generation enters college or and starts getting jobs, that number is only going to rise; to capture their business, delivery will be key.
Another reason restaurant delivery is crucial to your bottom line right now is the coronavirus pandemic. Even if your state is fully or partially reopened, there are going to be many customers who do not feel safe dining at a restaurant for the foreseeable future. Having a delivery or takeout option is going to be the only way for you to gain or retain their business.
For more info on delivery and takeout trends, download our complete guide to online ordering.
5 Ways to Get Your Restaurant Delivery Service Ready
If you don’t already offer takeout or delivery service, there are a few things you’ll need to do to prep your staff and your kitchen for the additional orders.
1. Get Your Staff Ready for Increased Volume
Before you switch on your new online ordering system, there are a number of steps to take to prepare your staff and kitchen for the influx of business.
Train your staff
Besides avoiding in-transit spills, making safe yet timely deliveries, and other procedural training items, an important concept to instill in your restaurant’s delivery staff (as well as anyone answering the phone) is that they are the only representation of your restaurant for that customer transaction. Return guests will expect the same level of hospitality and care they receive when dining in, and for new guests, a bad interaction could cost you any future business with them.
Create policies for your restaurant’s delivery drivers and orders
While you are updating your training procedures for these new positions, look at your staff policies and see if they need to be adjusted for this new role. For example, does the FOH pool tips or do servers keep the tips from their tables? Does FOH pay out the bartender, cooks, or bussers? Would you expect drivers to contribute their tips in the same way?
In addition to those questions, you’ll want to set a minimum order amount and delivery range that makes financial sense. For more densely populated areas your delivery range and order minimum can remain lower since you’ll have more potential customers in a smaller area and it will take less time for drivers to travel. However, if you’re somewhere more spread out, increase your delivery zone and order minimum in order to make the most out of your driver’s time.
How to hire delivery drivers
You have two options for hiring delivery drivers – you can bring them on as hourly employees or as contractors who you will provide a 1099 form for during tax season. There are pros and cons to both, so you ultimately will have to do what’s right for you or your restaurant, but below are a few questions you’ll want to ask yourself in the process.
- Do you expect delivery to become a big part of your business where you will need regular staff? Hiring an hourly worker may be a better bet when it comes to scheduling.
- Are you just testing the waters for building your own delivery fleet but not sure if you’re ready to commit? Start out with a few contractors and see how it goes.
- How do you want your brand to be received by delivery customers? If you prefer for your drivers to wear a certain uniform, drive a company car, or uphold certain brand standards, you can assert those rules with an hourly employee whereas it might be more difficult with a contractor.
- What kind of insurance does your state require for drivers? The cost of driver liability insurance could determine which option is right for you.
Choose a delivery tracking service
One of the big draws for customers who want to use an app like GrubHub or Postmates, is being able to track their delivery in real-time. You can still offer this feature to your guests by using a tracking service like Onfleet, mentioned above, or one of these other options.
2. Get Your Restaurant Ready for Delivery Orders
If you have room in your kitchen and on your staff, designate a specific area and staff member(s) who are dedicated to prepping and packing takeout and delivery orders. Designating a space where delivery drivers and pre-paid takeout orders can be picked up without having to interrupt staff will speed up operations and free up your staff to prep incoming orders and assist other guests.
3. Upgrade Your POS
Since you won’t be relying on a third-party service for drivers, you’ll have to own your online ordering system. While you could go the old fashioned route and take phone orders only, you’re going to miss out on a huge chunk of that Millennial and Gen Z business we talked about above.
To make your customers’ ordering experience seamless, it’s important to use an online ordering system that integrates with your POS. The benefits of having an integrated system include:
- Free up your FOH staff. An integrated online ordering system will send orders from a guest’s computer or mobile device straight to the kitchen. This frees up your front of house staff who no longer have to take phone orders or punch in orders from a third party and fire them off to the kitchen manually.
- Gain valuable guest data. When you’re restaurant POS and online ordering are integrated, you can track guest preferences, order frequency, and more. Treat your VIPs to a free drink or dessert or directly promote a special you know they’ll love.
- One menu to rule them all. Menu management in Upserve POS means less hassle – 86’d Items, price changes, description changes, and more all happen in the restaurant POS and are reflected on your online ordering website.
4. Design Your Delivery Menu
Not all items on your in-house menu are going to travel well for delivery. Pare down your menu to the most popular items you have and ones that will survive a car trip in a steamy container. This past February, our data team found that while nachos are a popular Super Bowl snack to serve at a bar where the game is playing, it’s a no-go for delivery orders – no one wants a soggy nacho! If you are unsure about a menu item’s ability to travel, try packing it up as you would for a customer, bring it home with you, and see how the quality is affected.
It’s important to understand that guests won’t order items for delivery the same way they order when they are in-house. The folks at Bywater in Warren, RI found this out when they updated their online ordering menu to reflect the regularly rotating menus they offer in-house. “We keep underestimating how popular things will be,” owner Katie O’Donnell said. “Last week we took our fish and chips off the menu and we had a 40% drop in sales and non-stop calls about it. People want what they want! So we brought it back and sales were back up. If we were open for dine-in we’d never run a single menu item for this long.”
5. Invest in Branded Packaging
A nice-to-have item that helps you bring the in-house experience into your guests’ homes is some branded packaging with your logo, brand colors, and/or slogan. This helps create brand awareness and loyalty especially with guests who may be ordering from you for the first time and have never actually stepped foot into your restaurant.
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How to Own Your Delivery Customers: Tips from David “Rev” Ciancio
Restaurant marketing expert Rev Ciancio broke down the pros and cons of third-party vs. first-party online ordering, and how to get more customers to order directly from your website. Below are some key takeaways from his webinar.
Average restaurant checks are up
Despite the pandemic and dine-in restrictions, average restaurant checks are up, which means guests are spending more on average for to-go orders than they do in-house. Spending via third-party apps like GrubHub and Uber Eats is higher now than it was at the beginning of shutdowns, and has not tapered off despite the fact that direct orders (called in to the restaurant or placed via your website) are also on the rise. Overall, restaurant delivery has increased 119% since this same time last year.
Moving guests from third-party apps to your website
Cianco acknowledges that third-party apps are a necessary evil, but the key to keeping money in your pockets is to drive customers to your own online ordering wherever possible.
- Remove third-party links from your website, Google My Business, Yelp, and other social media. Drive as many people as possible to your native online ordering page on any platform you have control over. Make it easy for customers to find the link, like a large noticeable button on your website, so they don’t get confused and switch over to a third party app.
- Offer sign-up rewards. Give customers an incentive to use your online ordering system, like a discount on a future order, points towards a reward, or a free item with purchase.
- Advertise on third-party orders. Print out flyers promoting your online ordering site and staple them to the bags of third-party delivery orders. 70% of customers surveyed said they’d prefer to order directly from the restaurant so more of their money goes to the business and not a third-party, so this can help direct more orders to your native site.
- Advertise on Facebook. Creating targeted ads on Facebook will help get the word out about your restaurant’s online ordering to both current and potential customers. If you’re not sure where to start with Facebook advertising, check out this comprehensive guide.