CHOICE membership

Which food delivery service is best for the restaurant?

When I try to Google this I just get what’s best for me. I want to know which benefits the restaurant (and driver, but that’s easier to find) more.

I would have thought restaurants would have inflated their prices to offset the cost of the app but this doesn’t seem to happen?

2 Likes

The only ones which ‘benefits’ the restaurant are those which are run by the restaurant themselves. That being they use their own cars/bikes and employees to deliver their own meals.

Alternatively, one goes and collects their ordered meals if they use a delivery service

Other third party deliver services charge significant commissions which substantially reduces the margins the restaurant/food outlet makes.

Why do businesses use them…the businesses which use them think it is a necessary evil. If they didn’t, their turn over and potential exposure to new customers would be reduced as many use these services for meal delivery for their convenience, without realising the impact in the business.

This hasn’t happened in the food industry like the accommodation industry which has increased prices to cover commissions. I understand that food outlets haven’t increased as there are many outlets which don’t deliver, thus causing those who deliver to match prices. Imagine the number of customers lost if prices increased by a third to those businesses who don’t deliver and increase their prices.

The accommodation industry is different and almost all use the booking services which charge commissions and there isn’t substantial competitors who don’t use the services. This is why when you go direct to an accommodation provider, they will most likely give a discount as booking commission doesn’t need to be paid. Getting discount from a food outlet because you don’t use the delivery service is near impossible as non-delivery meals are where the food outlets make money.

Some food outlets have also moved away from delivery services as they can significantly impact on a businesses profitability, especially when competing for customers with those businesses who don’t deliver.

Edit: would I use a delivery service, no. This is based in working in the hospitality industry, knowing the impact on the business. While it is ‘nice’ to have convenience, should such convenience be at the cost of the business or those who desire it. Currently it sits solely with the business.

2 Likes

Restaurants are forced into price competition and also into participating in the discount programs of the order/delivery services. Recently my inbox has been flooded with 5 to 10% discounts on orders to free delivery for a minimum spend. There are ‘opportunities’ to tip the drivers who otherwise seem to get paid/earn very little. :roll_eyes:

I only ever ordered for online purchase/delivery twice during lockdown, and both were OK experiences such as take-away delivery can be. In contrast I occasionally order from some favoured locals who ‘own and operate’ their own delivery.

Other than exposure and volume and being forced to join the marketplace as a matter of competition restaurant P/L has to be affected. Order/delivery is one of many ‘new industries’ providing ‘valuable services’ many of us did not know we needed, that allows them to skim more money from the pot. Some consider this good for the economy because it creates (gig) jobs and dividends and helps small businesses with advertising and volume. Others do not agree.

As to comparative benefits of which is best for the restaurant? I suspect most restaurants have the ‘standard’ contract, but it is probable those with high enough volume get more beneficial or even bespoke deals as is common with many contracts for various products and services.

3 Likes

I can relate the experience of a friend who owns a moderately sized restaurant. the introduction of Jobkeeper allowed him to afford to do an experiment: employ his own delivery drivers, and compare the cost to what he pays UberEats. He didn’t have a special deal with UberEats - it was the normal 30%. Turned out, it costs him exactly the same to keep a team of delivery drivers on as the commission he pays to UberEats. (The jobkeeper subsidy was not factored into the cost - he was talking about the cost on an ongoing basis). That’s probably not what what people would expect. The main benefit would be for his drivers, who were paid award rates, not the below minimum wage outcomes that we hear of from gig economy workers. A potential downside for the customers though is UberEats makes getting surge capacity easy, so if the restaurant is really busy the wait time for the meals won’t be as long.

1 Like

My local pub (preferred for home delivery, yummy food) started out by doing their own deliveries but switched to Menulog. The prices have gradually increased over the past 12 months. a year ago, their snittie, salad and chips was $10 in the pub, and $12 delivered. Now, its $17. I havent eaten in the pub for a year so I dont know what the current in house price is.

2 Likes