How do you feel about online food delivery services? 🚗

[ElisabethB]

Hi folks! Do any of you utilize third-party courier and delivery platforms like DoorDash or UberEats? Have services like that helped your business or just made things more complicated? Share your thoughts and experiences with us below!

[ElisabethB]

Oh gosh, I don't know if I would want DoorDash (or similar services) to handle my packages - I mean, that requires a big leap of trust that I don't have for them based on my experiences as a consumer. But I am someone who does not drive, so I admit I do make use of these services as a convenience. This thread has been really educational for me, and I bet the average buyer isn't aware of most of these issues, either.

[Donnie-M]

These services are generally terrible for small business.  I think of them more like a parasite than a synergistic relationship.

1. High fees and commissions: These delivery services charge high fees and commissions, typically 25-30% of the total order value, which can eat into the already tight profit margins of small restaurants.  

2. Competition from larger chains: These services often prioritize larger, more popular restaurants over smaller, independent ones, making it difficult for small businesses to compete.

3. Lack of control over customer experience: When customers order through these services, the restaurant has limited control over the customer experience, including delivery times and the quality of the food upon arrival.

4. Inconsistent quality: As these delivery services rely on a network of drivers, the quality and consistency of the delivery experience can vary widely, which can negatively impact the restaurant's reputation.

5. Loss of direct customer interaction: By relying solely on these third-party delivery platforms, small businesses lose out on the opportunity to directly interact with and build relationships with their customers.

6. Potential for negative reviews: If a customer has a negative experience with the delivery service, they may leave a negative review for the restaurant, even if the issue was not caused by the restaurant.

7. Dependency on the platform: If a restaurant becomes too reliant on these delivery services, it can be difficult to break away and establish their own delivery infrastructure or attract customers to order directly.

8. Limited menu options: Delivery services may not allow restaurants to offer their full menu, limiting their ability to showcase their full range of offerings.

9. No control over pricing: Delivery services may set their own prices for menu items, which can lead to confusion and frustration for customers who see different prices on the delivery platform versus the restaurant's own website.

10. Last and most important reason:  The customers are customers of doordash and ubereats and even if they are your customer, they become their customer when they start using that service and your food will be listed right beside everyone else.

The only integration I like is the one square has where we can use them, but they are part of our ecosystem!

[Tamyra_Paunchy]

I agree. The first and last reasons you listed were primary drivers for me all but giving up those platforms. From time to time I use 3rd party to clear inventory or do a flash sale... otherwise they're a last choice. During the pandemic moving to those seemed like a great option but it became apparent really quickly that the fees were high and not in my best interest as a small business. The fact that you have zero interaction with and cannot retain the customer info was the other deal breaker for me. Once the driver, whose behavior and interaction with the customer you also have no control over, picks up from you, your product disappears into the abyss. You'll rarely get feedback or ratings from the customer, you don't have access to name, location, or any other demographic information for tracking or marketing purposes. Getting new customers is only part of small business success. KEEPING/retaining them is even more important. That's hard to do with no info. 

[newlinecheckout]

Great points about the importance of owning your customer data and keeping/retaining customers. This is more important than ever and is why everyone is switching to first party apps in the industry. You can even get a first party app connected with Square with Orda!

[Ballywhack]

Donnie M;  spot on!  Can I use your overiew?  Its great.

[jaycbdhen]

Our business has been using DoorDash since 2020.  Currently we average approximately 100 delivery orders per the five days we're open for delivery and are one of the highest requested restaurants in our area.  Which puts us high up on the list of restaurants.

The fees for the delivery service ranges depending on your contract.  You're able to increase your pricing by a percentage so the customer observes a majority of the delivery fee.

Due to the unknown timing of when a driver will show up, we actually will not prepare the order until a dasher is assigned.  We do that so it does not sit under our warmer for who knows how long.  If we don't get a dasher assigned after waiting a while we will mark it as "ready".  That will typically get a driver assigned.  The average delivery time for our DD orders are approximately 16 minutes.  They offer a report so you can see the delivery time for each order.

DD has been a great tool for additional sales.  Especially during the winter months when customers do not want to leave their house due to the cold and snow.  We package our food in foil and then in a to-go box.  We use Secure-It stickers on every box.  The stickers will rip if opened.  We also tie all to-go bags and seal them with the same sticker with the DD ticket.

A majority of our customers understand the risk that comes with ordering with a delivery service.  We're very open and transparent with our customers on it.  Which I do believe is helpful.

Our biggest complaint is how easy it is for a customer to mark something as "missing".  DD will automatically take their word and will deduct an error charge from the menu.  However, they do have the option to dispute each and every error charge.  Allowing you to get the money back.  You also get an error report and it's interesting to see what people mark as incorrect.  We had someone do a charge stating that our meat had no seasoning - unto which it definitely did.  We disputed it, of course, but it's just crazy what people can "ding" you for.

There for a while we did have issues with a couple of dashers stealing food.  We would report them to DD.  They would remove them as a driver and pay the order out twice since we had to make it twice.  Making sure we aren't loosing out on money.

If our business gets busy we have the ability to enter into either "busy" mode or to pause the tablet from accepting any orders.

[ElisabethB]

Thanks for sharing your experience, @jaycbdhen - it's so interesting to hear both points of view, and I really appreciate your detailed reply! 😊

[StarlandCafe]

I do not like the inability for a customer to add gratuity when placing an order on the Square Platform. That makes it even more difficult for the delivery driver and the bookkeeper.

[Rpdpc]

I have mixed feeling with these services but use them.
We have been with Doordash and Ubereats for a few years. One part of their services that is often overlooked, the advertising and processing fees that is included in the cost. We do well with Doordash and have a large following. Yes, they take 30% of the pre-tax total. Yes, they are expensive.
Here is a positive example, if we get three orders, in three directions, more than one dasher delivers the items, decreasing wait time for that last incoming delivery.

One thing that should be done is elevated pricing to reduce your costs. We run a 20% price elevation on all third-party delivery services, reducing our costs of operating on these services. And not one customer has complained about the elevated prices. The understand the "pay for convenience" factor.
Unfortunately, this is the wave of today’s society. Businesses on these services understand the advertising and customer reach that comes with the price. The credit card processing fees that are included in the cost, and convenience of not worrying if your driver doesn't waste time, delaying other deliveries. Also, insurance and liability of having delivery drivers.

We also partner with Doordash on our online store, and mobile ordering app. On our own services, customers pay in-store pricing, they also pay a delivery fee that is sent to Doordash.
These services do have positives and place your business in the palm of hundreds of thousands of customers. Many that might have even visited, and never known your business was right down the street.
It is not all bad, it has helped many gaining increased exposure to the lazy person, and the out-of-town person working around the corner, along with the parent down the road who can't leave with a newborn.
There is a lot to gain from these services, they just come with an added cost, as all business services do.

[phillipsrw]

We made a conscious decision as a business not to use them. For our business model and product we could not make it work commercially and focussed our resources and energy in a different direction. I would urge any business considering using such services to do the calculations and make sure it works financially, no point being a busy fool for minuscule profits.

[Tamyra_Paunchy]

haha. I love the way you phrased that! I often feel that way. That's the perfect way to describe it too... being a busy fool. Working for miniscule profits. I might make a sign out of that and put it next to my desk as a reminder. Love it. lol. It's so true too.

[newlinecheckout]

Great question! Many Square sellers talk to us about this at Orda. The feedback we hear is that online food delivery services are an important channel for acquiring new customers. But, once a customer is loyal, businesses want to direct them to their own white label ordering system where they have a direct connection with their brand and where they own the customer data. Here is an article on third party delivery apps versus Orda mobile app builder for Square with some additional thoughts on this: https://www.getorda.com/blog/posts/third-party-delivery-apps-vs-orda

[teamtempest]

As someone in the delivery business, I've heard too many horror stories about working for DoorDash or UberEats to ever want to work for them myself. But when another company approached me and allowed me to set my own price, I decided to give them a try.

So far I'm only working with one chain. The way it works is that catering orders are placed a day or so in advance, so everyone knows what is supposed to be ready when. Even so, up to now I've waited for a restaurant far more often than they've waited for me. The reasons vary - "We got a late start", "We're short staffed today", "We have too many orders in too short a time", etc. Whatever. I get paid for waiting if it goes on long enough. I tend to worry more about if I'll be given a parking ticket for staying in one place longer than permitted.

These orders tend to be larger physically and financially. From the reports I get, it's not uncommon for the customer charge to be in the hundreds of dollars. Maybe I get these because the company that dispatches them to me needs to be able to pay me after their own charges.

But tips on large orders can be hefty. In some pay periods I've made more in tips than the base price I set myself.

Deliveries are verified by taking a photo of the delivered food. Seems reasonable, but the app they use is a bit flaky. It doesn't always respond to swipes of its virtual buttons, or it appears to but just sits and spins, or it moves on to a second order before the first is complete. Then I have to restart it and take a picture of the address instead (customers are eager to get into serving and eating and my chance has been lost).

I can see how small, on-demand orders can be very difficult to handle. Sometimes gig drivers won't accept an order if they think the price they'll be paid (including tip) is too low. The problem of "customers in the store" vs. "customers online" priority is difficult (I've walked out of places without buying what I came for if someone seemed too absorbed in a phone call to even acknowledge I was there).

I think third-party delivery services can work, but I'm skeptical that outfits like DoorDash and UberEats are the way to go. Their business models are just too predatory on drivers and restaurants alike.

And there's too little profit in small orders. Have the customer pick it up themselves, or charge the full delivery price. Let them decide what it's worth to them.

[OwensMarket]

we use a delivery app and use our drivers for this. we have been doing this for a month today. we like this platform better than the Square option because we can control what we are listing, utilize features like a heat map, see where our delivery orders are coming from, and set delivery zones. Customers can still pay with cash or a card and still apply a tip. We still use square to complete the transaction, so our drivers must have the square app on their phones and send them a card reader. But this helps keep operating expenses down. I would like to also add that non of the 3rd party delivery services operate in our area.So not only are we offering a service that is not available to our customers but a service that is much needed too 

[SmBuf]

We use Square On Demand Delivery through Square Online (Door Dash)   as well as 3rd party Delivery through UberEarts.

We started with UberEats about 3 years ago when Covid hit.   We increase the item prices on UberEats to include the commission percentage they charge so it's no loss to us financially.  Customers understand  this and many chose to pay for the convenienceor free delivery services they have.    Disadvantages to 3rd Party is that you dont have direct access to the customer information.  So customer service  is out of your contriol.  People can request refunds through without question and without your knowledge. Unless you notice it on reports and call Ubereats to counter,  the money is still coming out of your pay.  Delivery drivers sometimes get food and then cancel order.   However, these are only about 1% for us.  99% of the time things work out well.  Customers understand the risks with UberEats.

Now, We absolutely LOVE having the on demand Delivery  through  Square.   These are our customers who we have direct access to. Its linked to Square rewards. They order from our website at the store prices which we have set as cheaper than UberEats.  We pay no commission.   We pass a flat rate Delivery fee on to the customer. Orders are tracked in one spot along with all our other square online and pickup orders,  Door Dash drivers have been great so far and any tips the customer pays goes straight to them.  We love this service.

We are working to encourage our 3rd party delivery  customers to order from our website to use the on demand Delivery services  However, in our area UberEats is a big platform and several customers have free Delivery  subscriptions  with them.  We have gained a big customer base on their platform over the past 3 years.  Some customers don't mind paying higher item fees because its convenient  and they get free delivery. Therefore we have not been able to cut the cord just yet and we just offer both services.

[MelaoCafe]

We have been open for 4 1/2 years and honestly without mobile, we would maybe not have been as successful especially surviving through the pandemic. I feel like it was of utmost importance to try to expand awareness of your product and offering a convenience that yes, some customers may have some reviews that hurt, but again they pay for that convenience and should understand it’s not going to be as good as having it fresh at the store front. 

I currently use the Chowly integration which streamlined all the 3rd party delivering apps into square. This was such a help because now you have all your sales in one report instead of having to visit each dashboard respectively. They also include google ordering, postmates, seamless, and more for additional cost.

Chowly also offers to increase your prices for you so it covers at least your 3rd party platform fees. 

Then you can 86 items through one platform. 

I did also convert to iPad KDS stations, one for food/icecream and one for the drinks. Which made everything more efficient and saving valuable seconds during rush times.

I am also not sure if everyone participates in all the available marketing tools per platform, they have a lot to offer.

I know everyone has a different business and product, so it might not make sense to do the above. For me I recommend it for efficiency, brand awareness, and convenience in the food industry 

[JTPets]

I feel like when used correctly, they are a advertising with built in ROI. However managing them can be difficult. I am in the process of considering if I want to continue with 2 of them as they are not integrated with my POS and managing the menu for my assortment is becoming a pain and resulting in lost revenue.

Ultimately if you are using 3rd party delivery you probably have a need for it and are not yet at scale where maybe you can do it in house. They fill a gap for both business and customers in most cases.

[JUYBoutique20]

I don't use these in my business but for personal use I do.  I love the convenience and I seem to look for restaurants that have this option available.  I wouldn't mind paying extra for orders if business owner have to raise their prices to accommodate for the extra fees they have to pay.

[QuokkaCoffee]

I think most people have covered what I was hoping to say!

Uber Eats

We have dedicated UE customers that have made the trek in-store to meet us, but still prefer the convenience of third-party delivery. The gossip is that some companies offer stipends and vouchers to minimize the time WFH/standard employees spend away from their desks. We certainly push Square pickup when we can!

The only really annoying thing with UE is that they call me every quarter to push ad sales. The conspiracy nut in me thinks they're able to mess with the algorithm to depress sales and push restaurant partners into buying-in. Around a quarter of our total sales come from UE, and we've increased pricing on the platform to cover the 30% commission fee.

I just tell the team doing their jobs and maintaining accuracy to help us rank in Top Eats is advertising enough.

DoorDash

Right now we're actually in the middle of onboarding DoorDash as a way to A/B test some lunch concepts, as though we've got a ghost kitchen running. I don't know if it's going to work but it sure as heck feels safer than launching an in-store menu when it might not be feasible. I'm hoping no one tells me off for doing this.

Square x Local Delivery

I'm curious to hear if anyone from Australia's had any luck integrating Square online ordering with in-house delivery. I wouldn't even know where to start--hiring, staffing hours, liabilities, food safety, etc.

[mksavage]

@QuokkaCoffee Wow, it's so interesting to hear that Uber Eats makes up that large of a percentage of your daily sales! That piques my interest, for sure. I had actually never considered increasing prices on the platform to cover the 30% fee (why did that never occur to me?!). That would definitely remove one of my biggest objections. Thanks for sharing your experience!

(And I hear you, the thought of introducing our own in-house delivery sounds very daunting. For me, I'd be mostly concerned about the hiring/staffing hours piece, since I imagine the amount of orders ebbs and flows during the day, similar to in-person traffic.)

[allwhowander]

@mksavage same here with staffing for delivery.. I have a feeling I would wind up doing most of the deliveries eventually 🙃