The coronavirus pandemic has drastically changed how we live and work in the United States. Across the country, states issued stay-at-home orders that led to the closure of non-essential businesses. While restaurants remained open, dine-in services were generally prohibited — which left pick-up and delivery as the only options for most businesses. Even after re-opening dine-in options, many consumers still prefer to order delivery instead of dining in.
During this time, many restaurants have turned to online services to help them process and manage food orders. Even before the spread of COVID-19 required restaurants to adapt their business models, there were significant advantages to using an online platform for processing orders. Online ordering allows for greater accuracy, can boost a restaurant’s popularity, and even increase sales. Mobile ordering was anticipated to be a $38 billion industry in 2020, and will likely account for an even bigger share of industry profits due to coronavirus-related closures. Many Americans have grown accustomed to ordering food for delivery – or may still be cautious about eating out during surges of new variants.
For many restaurant owners, the question isn’t whether to offer online ordering — but which food delivery service is the best choice. Businesses typically spend a substantial amount of time making decisions like this, but the pandemic has pushed restaurants to quickly set up a way for their customers to order online. Below, we’ll outline how to partner with a delivery service and the factors to think about when selecting a service, as well as the best restaurant delivery services that you may want to partner with during this crisis and beyond.
Benefits of Partnering with a Third-Party Food Delivery Service
There are many benefits to partnering with a food delivery service provider. First and foremost, delivery services provide you with an opportunity to bring in new sales from customers who don’t like dining out or increase sales from existing customers who may not want to travel for food on particular days. Your menu will also be featured on the delivery service’s app, which gives your brand more exposure.
Working with a third-party delivery service holds benefits over hiring delivery employees as well. Adding employees means having to do more payroll work and potentially wasting money if demand for deliveries is down on certain nights. Working with a third-party service allows you to avoid the hassle of managing additional employees.
What to Consider When Choosing a Food Delivery Service Partner
Most restaurants do not have their own mobile ordering app or the budget to set up online ordering independently. Third-party services, such as DoorDash or UberEats, are often the best alternative. These companies provide a platform that your customers can use to order food — and their workers will pick up and deliver food for you.
Before you choose a third-party delivery service, you will want to make sure that what the other company offers helps your own business. At the end of the day, you want your customers to be satisfied, the orders to be processed smoothly, and to maintain profitability.
With that in mind, be sure to consider the following factors when selecting a food delivery service partner:
- What percentage does the delivery service charge? Commissions may be anywhere from 15 to 30% of each order. Do the math to determine if these and other costs will increase or decrease the order value per check.
- What is the company’s reputation for reliability and customer service? Ask for information on average delivery times, how the company handles complaints, and if its drivers are vetted before being hired. After all, you don’t want customers to have a negative opinion of your restaurant because of something that the delivery company did.
- What type of contract will you need to sign? When making a decision in a hurry to meet needs during a pandemic, you probably don’t want a long-term commitment. Carefully examine the terms of any contract, and be sure to follow up on the company’s performance.
- How many drivers does a company have in your area? In urban settings, there may be dozens of delivery companies that each have hundreds of workers. In rural and suburban locales, your options may be more limited — and there will likely be fewer drivers available.
In addition, think about whether your restaurant is well-suited for delivery orders. Do you have the technology to ensure that your cooks can get online orders easily and prepare them in a timely fashion? Is your food easily prepared and assembled for take-out? Do you have what you need (such as branded take-out bags) to package food for delivery?
If you decide to use a third-party delivery service after considering all of these factors, read on for our top choices for restaurant delivery partners.
DoorDash
This delivery service is a market leader across the United States. While DoorDash does not disclose its fee schedule, its order commission is estimated to be 20%, which is one of the lowest rates in the industry. Restaurants may be able to pay a higher fee to have their business appear higher in searches through the app or website.
DoorDash has an advantage of having drivers throughout the country. Its app reaches 80% of American consumers. According to its statistics, 91% of its deliveries are on-time or early. The average delivery time is 37 minutes from when an order is placed.
Unlike other services, DoorDash’s workers — known as “Dashers” — only pick up and deliver food from restaurants. This may make it a better fit for your business than services whose drivers also pick up passengers or groceries.
Signing up for DoorDash is relatively simple. Owners can register through the website by submitting information about your restaurant, menu, order protocol preference and pictures of your food. DoorDash estimates that the entire process will take 10 to 15 minutes, and that deliveries will start within a week.
Pros of Using DoorDash
One of the biggest advantages of using DoorDash is that it is an incredibly popular platform that is available in markets throughout the United States. In fact, it has twice the market share of its top competitor, UberEats.
DoorDash also promotes restaurants on its website and app. When a customer logs in, they can search for local restaurants by name, type of cuisine, or specific food types. You can also pay for priority placement, a promoted listing, or to be listed as a featured offering. Because many customers are loyal to DoorDash, this can lead to a lot of new business without having to embark on an advertising campaign.
DoorDash also has a lower commission fee than many other meal delivery services. While its 20% fee will cut into your profits, this amount is lower than competitors like UberEats, which may charge as much as 30% per order.
Cons of Using DoorDash
One of the biggest drawbacks to using DoorDash is the cost. While its commission is lower than many other delivery services, that 20% charge per order can add up over time.
Another downside to DoorDash is that just as you can boost your marketing efforts on the app, so can your competitors. This can make it harder for your customers to find you – or more likely that they will choose another restaurant over yours. At the same time, when customers search for a particular cuisine or restaurant, Doordash will show multiple options. This can cause you to lose business, leading to less profit overall.
UberEats
Most of us are familiar with what Uber does: the corporation hires independent contractors to use their own vehicles as a taxi service. The ride-share company also allows customers to order food from restaurants, which their drivers will pick up and deliver. Restaurants can partner with UberEats to add their business to this service.
UberEats charges restaurants up to 30% commission on each order. This can significantly impact your bottom line. Unlike services like DoorDash, UberEats drivers are not specifically trained to handle food or orders, which may lead to an increase in customer unhappiness.
However, UberEats is available throughout the United States, wherever its drivers are located, which makes it a convenient option for many businesses. You can sign up for the service through its website, and in some cases, begin getting orders within a few days.
Pros of Using UberEats
One of the biggest upsides of UberEats is that – like DoorDash – it is widely available throughout the country. Many people are familiar with and trust the Uber name, so this may increase the number of people who use the UberEats app for food delivery.
With UberEats, you can also market your business by paying an extra fee for priority placement on the app. This can boost your reach in the area, opening up a whole new pool of customers for your restaurant.
In addition, if you already have your own delivery drivers, you can still use the UberEats platform to facilitate orders. Doing so will reduce the commission fee while allowing you to take advantage of the benefits of the app.
Cons of Using UberEats
The biggest downside of using UberEats is the cost. Like all food delivery services, UberEats makes money by taking a percentage of each sale. Unfortunately for restaurant owners, UberEats’ commissions are particularly high – starting at 15% if you use your own drivers, and up to 30% for its premium plan. There is also a $350 activation fee to get started.
UberEats has also had issues with delivery times and food quality. When you use this service – with drivers who may also be picking up passengers for rides – it may put your restaurant’s reputation at risk with customers who are unhappy with how their food arrived.
GrubHub
Another popular choice, GrubHub has 14.5 million users across 1,700 cities. It is particularly popular in larger cities such as Los Angeles, Boston, Philadelphia, New York, and Chicago.
GrubHub is different from other delivery services in that it allows restaurants to use their own delivery staff. This means that you can maintain control over how your food is delivered, while benefiting from the convenience of the app’s ordering system. The company also offers point of sale (POS) integration, which makes it easier for many restaurants to receive orders.
Depending on the level of service that you use, the commission percentage for GrubHub ranges from 15 to 30%. If these custom options appeal to you, signing up is relatively simple through GrubHub’s website.
Pros of Using GrubHub
GrubHub used to be one of the biggest delivery services in the market. While it has fallen behind its competitors, it still has a fairly large market and is available in over 4,000 cities.
One of the biggest advantages of using GrubHub is that you’ll pay less if a customer orders through your website instead of the app. In other words, if a customer knows that they want to order from your restaurant and goes to your website, then you won’t pay GrubHub’s commission.
Cons of Using GrubHub
GrubHub isn’t as popular as some of the other delivery apps, so if you’re outside of a major metropolitan area like New York City, it may not be available for you. It can also be expensive for both your business and customers.
GrubHub charges a 20% commission for all orders placed through the app, plus a 10% delivery fee if you use their delivery drivers. In addition, you have to rent hardware from GrubHub for a cost of up to $119/month. If you aren’t seeing an increase in business from using GrubHub, this can make it difficult to turn a profit using this service.
Postmates
Compared to DoorDash and GrubHub, Postmates still has a relatively high share of the total market for third-party delivery services. It is the top third party-delivery service for customer spending and retention, with customers averaging 3 transactions per month (the highest in the industry). This may be due to the fact that Postmates is more than a restaurant delivery service — its drivers will also run errands for customers, like picking up alcohol or groceries.
For restaurants, Postmates charges a commission of 30% per order. It is most popular in larger cities such as Los Angeles. It is available in more than 4,200 cities worldwide. Postmates allows restaurants to decide how they want to receive orders, including through their POS system.
While Postmates is more commonly used in bigger cities, its users tend to be dedicated to the app. As with the other sites, signing up for Postmates is a straightforward process that is done through its website.
Pros of Using Postmates
Postmates was recently acquired by Uber, so it has the advantage of a larger delivery area than it did before the merger. In addition, any restaurant that appears on Postmates will also appear on UberEats.
There is no credit card processing fee for Postmates, which can help to keep costs down. In addition, its platform can integrate with point of sale systems like Square to make it easy to add to your existing technology.
Cons of Using Postmates
Postmates is most popular in the Los Angeles area. Outside of LA, it may have relatively few users. Because Postmates drivers may pick up items from stores as well as restaurants, quality may also be an issue.
This service is also pricey, coming in at around 30% commission. Customers may be charged an additional 20% in service fees.
Caviar
Caviar is a niche food delivery app that is designed to connect customers to high-end restaurants in their area. It operates in the same way as other food delivery apps, with a focus on pricier or specialty foods.
In 2019, it was acquired by DoorDash. It operates in select cities, and offers additional restaurant selections that are often not available on the DoorDash app.
For fine dining restaurants, Caviar may be a great choice. The total commission will likely be in the 27 to 28% range.
Pros of Using Caviar
Because Caviar caters to people with higher end tastes, users may be less price conscious than those on other apps. As a result, it may be possible to sell a lot more food to these diners – and reap more profit.
The platform can integrate with Toast and other point of sale (POS) terminals so that special hardware is not needed. Total commissions range from 27 to 30%, which is about standard for the industry.
Cons of Using Caviar
Although Caviar is part of DoorDash, it has a very small market share. As a result, it is only available in a limited number of markets. This means that many restaurants around the country may not be able to take advantage of Caviar’s service.
Toast
As a restaurant owner, you may already be familiar with Toast for its software, including point of sale systems. During the pandemic, Toast introduced a new feature: Toast TakeOut. Through this platform, restaurants can set up online ordering – commission free.
The platform integrates with Toast’s existing software. When customers navigate to a restaurant website, they can order delivery or pickup using the Toast system. However, Toast does not provide drivers. Restaurant owners will either have to supply their own drivers, or Toast will utilize other delivery drivers in the area to pick up and deliver the food.
Pros of Using Toast
The biggest advantage of using Toast is that there is no commission. Instead, there is a flat monthly fee for the software, which is waived if you are already using Toast’s software at a certain level. If you choose to leverage Toast’s third party delivery drivers, the cost will be a flat fee instead of a percentage of each sale.
A flat fee arrangement can be incredibly beneficial, especially if your online orders tend to be for higher amounts. For example, a $50 order on a platform with a 30% commission will mean a $15 fee. With Toast, you won’t pay any fees if you deliver the order yourself or the customer picks it up – and any delivery fee will be capped at under $8.
Because customers are ordering through your own website, you also won’t have to worry about losing business to competitors. This can lead to an increase in sales and more customer loyalty.
Cons of Using Toast
While there are some advantages to using Toast, one of the biggest drawbacks is that you won’t have your restaurant listed on various delivery apps. Many customers don’t navigate to individual restaurant websites when they want to order food. Instead, they open up a delivery app and choose from available options. With Toast, your restaurant won’t be on any apps, which can reduce the potential customer base (especially for people who might not have visited your establishment before).
Toast also does not provide delivery drivers. While it can arrange for drivers, these couriers don’t work directly for Toast. This may mean that it is harder to maintain control over timing and quality when a third company is involved in the process.
Black and Mobile
In the modern era, many people understand how important it is to support Black-owned businesses. Enter Black and Mobile – the first delivery platform that exclusively offers delivery from Black-owned restaurants.
Black and Mobile works like other service platforms: restaurants can join the platform and list their business. When customers order, a delivery driver will come to the restaurant to pick up the food and deliver it to customers. The commision fee ranges from 15 to 20%.
Pros of Using Black and Mobile
Black and Mobile offers some of the lowest commission rates around. For restaurants that exclusively use this platform, the commission is capped at 15%. Otherwise, the commission is 20% – a lot lower than the industry standard of 30%.
Black and Mobile also has the advantage of highlighting Black-owned businesses, which can be a huge boon in areas where people are conscious of how they spend their money. Its relatively niche market can be a real boon to Black entrepreneurs in this way.
Cons of Using Black and Mobile
Black & Mobile is currently only available in select markets: Atlanta, Baltimore, Los Angeles, New York, and Philadelphia. This limits the number of restaurants that can use the service. In addition, only Black-owned restaurants can be on the app. It is also not well-known at this time.
Chowbus
Like Black & Mobile, Chowbus caters to a niche market: it only offers food from Asian restaurants and markets. It is particularly focused on helping mom and pop Asian restaurants thrive, banning big chain restaurants from the app. It also does not allow any restaurants to pay additional fees to appear higher on the app.
Instead, all restaurants are charged a flat fee to participate in the app. The company does not disclose the fee, but states that it is less than the standard 30% charged by most delivery platforms.
Pros of Using Chowbus
The biggest advantage of using Chowbus is that it is designed for and caters to Asian restaurants. It also works to maintain a level playing field by forbidding chain restaurants, not allowing restaurants to promote themselves, and charging a flat fee.
The app also features menu items written in both Chinese and English, making it fully bilingual. In this way, it can appeal to people who don’t speak English as a first language as well as native English speakers.
Cons of Using Chowbus
Chowbus is only available in limited markets: Austin, Ann Arbor, Atlanta, Boston, Bay Area, Champaign, Chicago, Columbus, DC, Edison, Houston, Jersey City, Lansing, Los Angeles, Minneapolis, New York City, Philadelphia, San Francisco, Seattle, St. Louis and West Lafayette. If you run an Asian restaurant outside of these areas, you won’t be able to use this service.
One of the coolest features of Chowbus is the ability of customers to “bundle” foods. Because many Asian restaurants are clustered in certain neighborhoods of cities, customers can order their favorite dishes from multiple restaurants. This is a benefit for customers – but can hurt restaurants’ bottom line if their overall sales are lower because customers order certain food from elsewhere.
Seated
Seated started as a website that led new diners to upscale restaurants. With the pandemic, the platform adapted to offer delivery and pickup options as well. Restaurants pay a flat fee to be on the app.
When customers use the site – to book a table or to order delivery – they earn rewards that can be redeemed for gift cards. These rewards are dynamic, which means that restaurateurs can increase them to drive demand. For example, if your restaurant typically has slow times and you need to increase sales, you can increase the rewards to boost demand.
Pros of Using Seated
The biggest advantage of using Seated is that it may actually increase sales through the use of rewards. Customers may be more likely to try your restaurant – for delivery or for dine-in service – if they can get a $10 to $20 gift card for doing so.
In addition, Seated does not work with or accept receipts from third party delivery services like DoorDash or GrubHub. This means that customers who enjoy your restaurant will be incentivized to visit using the Seated app instead of a third party service, which may also increase sales.
Cons of Using Seated
Seated is available in just a handful of cities: New York, Dallas, Boston, Atlanta, Chicago and Philadelphia. It also tends to cater to higher end restaurants, which may not be a fit for all businesses. It is also relatively unknown, so you may not get traffic from people who aren’t aware of the app.
There is not a lot of transparency about the fees that Seated charges for its take out and delivery services. For this reason, it can be hard to know if it will be more or less expensive than apps like DoorDash and Postmates.
ChowNow
ChowNow presents an alternative to the usual delivery services. Instead of charging a 30% commission per order, restaurant owners pay a flat monthly fee that starts at $40 per month. Its systems are compatible with more than 30 point of sale systems, including Square, Toast, and Revel.
ChowNow does not employ drivers. Instead, it works with a network of delivery drivers through services like DoorDash. Restaurants pay a fee for delivery that is based on distance.
Pros of Using ChowNow
ChowNow is a good alternative to many other food delivery services because the fees are flat, instead of a percentage of each sale. As a result, restaurants can save a significant amount of money using this service.
Restaurants can also benefit from ChowNow’s marketing capabilities. When potential patrons open the app, they’ll be able to see your restaurant – which may drive sales. ChowNow also gives restaurants full access to customer data, which can be critical for marketing purposes.
Cons of Using ChowNow
Because ChowNow doesn’t have its own dedicated delivery drivers, restaurants who use this service are taking the chance that delivery quality will be subpar. It may be hard to work out any problems as a result, since complaints will go through at least two separate companies, in addition to your restaurant.
Relatedly, if there is something wrong with the delivery and you need to contact the driver, it can be difficult or even impossible to do so. This can make it hard for restaurants to track orders and ensure that they are getting to customers in a timely fashion.
Factor Food Delivery Into Your Restaurant’s P&L
It’s important to remember that the overarching goal in partnering with a delivery service is to achieve financial stability and grow your business. To ensure this is happening, you’ll want to track the impact the service has on your restaurant’s profit and loss statement. Are sales rising due to the availability of delivery options? How much are delivery costs eating into your profits? Keeping an eye on these metrics can help you determine if your delivery partnership is working.
How Custom Disposables Can Build Your Brand
For most restaurants in the United States, pick up and delivery is currently the only option. Whether you are taking orders by phone or through an online food delivery service, having custom plastic cups, custom paper bowls, custom napkins, custom sandwich bags, custom coffee cups, custom coffee sleeves, custom wax deli sheets, custom deli bowls, and more can help grow your business. Your customers will enjoy your food — and remember your name for future purchases.
Budget Branders is dedicated to helping small businesses get the branded disposables that they need for less. In the past, customized cups and other disposables were a luxury that only big restaurant chains could afford. Our custom-printed disposables are available in prices and quantities that make sense for independently owned restaurants.
To learn more about how we can help you promote your restaurant’s brand, contact us today by filling out a form or pressing the live chat button. Alternatively, you can submit a quote request for one or more of our products.
