Online ordering and restaurant delivery companies appear on the scene

DoorDash, Slice, GrubHub online ordering, restaurant delivery services

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Third Party Delivery Services for your restaurant

Pegasus Ventures Michigan brought the first small business online ordering to West Michigan 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:

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 Michigan 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.

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