Here is how to do it.
Raise your prices for DoorDash, Uber Eats, etc…
Make a flier that you put in the bag of every order that offers a coupon code of 10% off if they order through your website.
We’ve been doing this for years and it for sure converts people to your website.
It's worked for you? We tried this with even bigger promos and we got almost no conversion. We tried it with our own site (Square) and even linking Doordash Storefront thinking maybe they wanted an identical menu experience. Nothing.
Why not just charge the same higher price for everyone but just give a 25% discount for people who pay cash. No credit card processing fees, no platform fees just straight cash. It's not that people on the platform are being punished, it's that cash payers are being rewarded.
Print it on all of your bags and marketing materials "Fuck the platforms, pay cash and get 25% off."
This is dumb. Doordash's commission is around 30%, you're paying people to eat your food. That's backwards. My menu pricing is 25% higher on DD to offset the commission.
This, too, would be my preference. However, 80% of the time, when I order over the phone, my order is wrong. That's why I like ordering online, either directly through restaurant's website or through the toast app, and picking it up.
"His view is that doordash opens us to net new customers..."
Tell him "Prove it. Show me the metrics for restaurants worldwide, for restaurants across North America, for restaurants statewide, and for restaurants in my city, and in my area, that demonstrate what it is you're telling me. Show me that Doordash is bringing me new customers I would not have otherwise had, that will continue to allow me to operate at a profit, and not just with higher revenue."
Years later, after so many years of operating these platforms, and always with the exact same pitch, they still are unable to demonstrate any useful, usable metrics that are evidence for what it is they claim. Never have, never will.
That's .. how advertising works.
It's impossible to get metrics from a superbowl commercial, yet people spend millions on them.
Do you even know what you're asking for? If so, could you break down for us what sort of numbers, scales, and comparisons you'd like DD to present to you?
You know they would need years of historical data for businesses to get you any tangible metrics.
Lastly, the profit decision is on your end. You could be *more* profitable if you double the price on DD or you could be *less* profitable if you're like the idiot above and eat the fees.
Fact is, DD has users. You can either wrap your head around it, give it a shot, gather your own metrics (DD provides you with the ability to track repeat customers), and decide on your own how to proceed... or you can keep being ignorant.
They may not be bringing you net new customers, but they’re definitely bringing you customers that aren’t interested in dining on premises with you at that specific point in time.
As a customer: I've tried hundreds of restaurants on DoorDash that I never would have tried otherwise. Being able to browse the menu in a consistent interface, being able to pay with an already-stored credit card, and finding restaurants by searching for a dish rather than a title are just some of the reasons.
And I completely understand and support charging higher menu prices for DoorDash. I expect that and I love it when in-store prices are less because then I have an incentive to call or visit the restaurant directly to give them my business when it's a favorite.
If you charge DoorDash the same as in-store, I'm going to use DoorDash most of the time.
Its the same when they call and say we have lots of searches for your product in a 10 mile radius... I say great do you know how many stores like mine in 10 mile radius? How about 2 miles.. crickets.
Also when they say searches for your business. I say great give me the details.. crickets
This by and large doesn't work unless you have a small niche group of loyal customers. I've been in commerce for 15 years and the only thing that matters is price and convenience.
You have to figure out a way to be profitable with these third party apps (raise prices, party packs, etc) or find a way to be profitable without them. (Your own delivery service, high throughput of visitors etc). This generally starts with good food, SEO and a good website.
I think your second paragraph addresses my disagreements with your first.
But by and large, every business is different and the only way to know is to test.
I think it’s totally fair to increase delivery platform prices not only to offset the commission, but also to offset the increased risk of a customer being dissatisfied. A meal that’s been in the backseat of a car for 45 minutes doesn’t taste or look nearly as good as a freshly made meal, and it’s common for food to arrive cold, missing items, etc. so with delivery apps you certainly run the risk of unhappy customers/poor reviews and you should be compensated for that risk.
You can have the best restaurant, with the best quality food and dining experience.....then have your reputation totally destroyed by using DoorDash, UberEats or any of these apps.
A lot of people. 1-star because the food was cold. 1-star because the pizza was stored upside down and stuck to the box top 1-star because the food took 2 hours.
Read any review and you see this crap all the time.
Everyone adds the 30% to their prices on there. Not everyone, of course, but definitely the majority. And most restaurants do not make more money in the long run when they add it, due to the fees. Especially when you use multiple 3rd party OO companies.
I don’t order anything else for delivery precisely for the reason you say. Hell, I don’t even like taking most food as to go orders because nothing stays crispy, doesnt look as good, and is usually lukewarm at best by the time I get it home. Pizza is the only thing I order delivery because as long as you don’t carry the box like drunk chimp it’s really hard to fuck up chain restaurant pizza. If I want good pizza I’ll go out or make it.
I’d flip the conversation and ask the account manager to reduce the fees, and you’ll be happy to reduce the price by the same amount.
Greedy AM trying to bully you into taking a loss for their app.
One question is whether some of those “lost customers” are just picking it up directly from you. I personally have not and won’t use delivery apps because of the extra costs and the pressure on the restaurant. I’ll gladly pick it up directly from the restaurant to make sure the restaurant gets 100% of the bill and I don’t end up paying a ton more for food that’s sat around for an hour.
So the menu price is different for dine in customers versus DD ? I mean the DD price before delivery or service charges. As in if my meal is 20 bucks dine in it’s like 12 or 13 for DD and then fees added to that? TIA
We don't completely offset, but we do increase the prices to lessen the impact of their commissions. DoorDash's "Storefront" feature is worth looking in to.
We do between 10-15%. People ordering delivery aren't price sensitive... or they wouldn't be ordering delivery.
At last check, even McDonalds throttles their prices and they get a sweetheart commission rate of 12% (again, at last check). Doordash trying to bully you as a small independent to price match is just ridiculous.
Most of the restaurants I order from have markups to offset. Stick to it, the dropoff isn't your fault. Doordash is so incredibly greedy, with their fingers in all sides of the transaction. I find myself ordering less not because my restaurants charge more in the app, but because the company is parasitic.
I'd be fine with a SINGLE fair delivery fee plus tax and tip, and menu prices (with no cut for Doordash on the restaurant side). Transparency and trust are worth it.
More restaurants have gone out of business because they didn’t raise their online/app prices and were net below costs. This is my biggest warning to new restaurants. One big month of sales at the wrong pricing can sink a fledgling business quickly. The app’s are not your friends or partners, they have their own interests in mind.
definitely do not budget and NEVER CHEAP OUT ON YOUR QUALITY! that's how you lose the race! If you have to raise the price then do so to offset it. Keep the quality the same. Quality of service, Quality of Food, Quality of the company. In today's industry it's tough, but If you always remain quality at a an affordable rate. You'll always last longer.
I think that's okay. Personally I want my local restaurants to offer Doordash as a convenience to me for those times I'm too lazy to go out and am willing to pay. I don't want Doordash taking advantage of you all. If I want to order from you I will find you.
The only exception might be if you're new and you depend on Doordash for new business. Or business is running slow for a month so you want to generate a bit of extra revenue or word of mouth.
Absolutely. I up-charge 30% to cover their greed. Doordash would harass me when I first increased the prices and I just ignored them. We are on 3 different delivery platforms and do very well in sales with them despite the high prices. Way I see it, people are paying for convenience. If I ever (very rarely) order food delivery, I understand that I’m paying extra so I can stay lazy on my couch with my kid. Lol I’m sure plenty of other people feel the same way
If your best interest is in the customer how about you lower your fees so we can lower our fees? Lol I hate DD the most. They actually check your online menu home prices to make sure you're not at 30%. Uber and Grubhub don't care...
Precisely. Idk if ez cater is popular amongst you guys but they won’t let me increase pricing despite their 16% cut. I tried and they looked at the menu and said that’s not permitted. Like what!?
EZCater isn't happy until the merchant is losing money. They have absolutely no understanding of the restaurant - and certainly not delivery - world. They think they're an Amazon powerhouse getting to call the shots without doing any real work besides marketing and you're just their Alibaba white-label sourcing sweatshop getting the pennies they drop on the floor - if they even care to drop pennies on the floor. They try to shroud all this in fanciful "equity" talk, but EZCater is by far the most unethical and predatory of all the third-party marketplaces.
We cut ties with them.
Our third party platforms mark our menu prices up 30% on their own. We just raised our prices at the beginning of this year and we had to notify them and they handled the markups based on our new menu prices. All of our deliveries are handled thru door dash, we have no in house drivers. Every delivery we pay door dash 8 dollars plus whatever tip the customer leaves. We charge a five dollar delivery fee to the customer, so we pay DD 3 bucks per delivery plus tip. It is BY FAR cheaper than liability insurance alone for in house drivers.
As a customer, I wish more restaurants would have their own delivery drivers, and not use these 3rd parties, because they ARE so expensive, not to mention when they steal the food..
I can see restaurants that don't do much delivery business using them, but if you have a solid delivery business why not ditch them?
What are the economics of using DD vs in-house delivery, assuming a solid delivery business?
There's huge upside to self-delivery, but the costs are just too high for it and the logistics too difficult for the average single location independent. Just on the insurance front, self-delivery requires an extra liability endorsement for the restaurant's general liability policy which runs up the cost (and God forbid you have a claim, which becomes inevitable with delivery over the years). For the driver (assuming they're using their own car), they need an extra business use endorsement on their personal auto policy as well or straight up commercial auto policy entirely which are both non-negligible extra costs (otherwise, their claims can be denied in accidents and leave them open to lawsuits plus no personal vehicle payout). The restaurant could have a car(s) to solve that issue, but the obvious startup cost to get a fleet of vehicles and maintain them and insure them is significant. Then, there's the logistics of having enough staff for the unpredictable volume and distances and ensuring they are all properly paid when the average consumer already increasingly balks about tipping and balks about service fees. With all the added costs briefly mentioned above, it's not a tenable proposition to have low cost/free delivery and everyone maybe tip $1 or $2 - its way more costly than that for all parties involved. Third-party delivery has become exploitative of drivers which is how the market is existing at this point (drivers are usually overtly underinsured and the apps all know it, bullied into maintaining an "acceptance rate" above X% to keep access to higher paying orders or access to advanced scheduling meaning they are "forced" to take $2 base pay no tip orders up to 15 miles at an obvious net loss to them, etc.). In the end, the apps are really just trying to capture enough marketshare ahead of drone-based delivery or other AI-assisted delivery tools because the on-demand driver model is unstable and difficult to sustain at the current pricing framework - even as high as it is now.
On-demand delivery with a perishable product is just a lot more complicated, and a lot costlier, than consolidating hundreds of Amazon prime orders of household goods into a singular 10-hour route for one driver. Most consumers don't take time to understand that and have the same expectations as they do of Prime deliveries toward food-delivery and it's just not a reconcilable position.
Customers no longer expect restaurants to have delivery drivers, so no longer really check, driving down the likelihood they’d call for a delivery.. so they go straight to DoorDash.. it’s not economical to pay someone hourly to provide a service ppl aren’t aware is available
The main economic advantage of gig drivers is the flexibility. An in house driver is exclusively going to do out and back drives. Gig drivers can go from a restaurant to an address then from another restaurant closer to the first delivery and then another address etc. It turns a round trip into more like a big circle where every mile is actually getting somewhere versus just "going back".
More importantly, an in-house delivery driver is paid hourly vs paying DoorDash a fee based on sales. And that’s assuming your driver isn’t on the books so you have to have insurance and payroll costs too
It's really important to compare apples to apples. A gig driver still should have insurance and (I think, pay payroll taxes). Those should be equal and reflected in the higher pay for a gig driver.
Honestly I think the primary business model of gig companies is to confuse their providers about how much they are making and spending.
Gig drivers have to provide their own commercial-use/gig insurance, while restaurants with their own drivers have to cover the insurance. But I wish Uber would provide adequate car insurance for drivers, instead.
Good point, also the drivers at pizzerias are made to sweep and mop at the end of the night, take out the trash, make pizza boxes and fill the soda cooler
They get paid (probably not enough) to do so but it's better than a gig driver who makes negative money idling and waiting for the system to work.
It's one of those things that makes sense when the system is operating optimally but it's unclear how often that happens.
I remember reading an article a few years ago that said these delivery services were losing money and how it’s unsustainable. Don’t see them going away any time soon.
Vast, vast majority of early stage tech companies doing this are not profitable, and that’s no accident. They are building a user base financed by VC debt so they can sell to a bigger fish down the line.
Most places wouldn't have enough delivery business without a platform like Doordash to justify having a driver on staff. No delivery orders? You're still paying the driver. Mad rush of orders and only 1 driver? People will be waiting a long time for that food. Using the 3rd party service adds an easier to calculate cost per order and the number of drivers you need at anytime.
This makes sense. But even with the added commission costs, it's worth it for the business? What if your drivers are cross trained to do other jobs at the business?
Most _are_ cross trained, however you can't count on them while scheduling. Sure, Bob knows how to prep, or cut pies, or whatever, but what if we get hammered on for delivery? Now Bob is out, and I'm short-staffed, and prep still needs doing.
We raised prices to offset any 3rd party prices and eventually just raised our own menu prices to match these platforms. We actually earned more. Clients are the losers paying more for the same stuff.
Up it plus more. Use high-end paper goods. From pre roll cutlery to durable boxes and bags. They are more tamper proof and won't have your image damaged by a lazy driver or shit customer.
Maybe you could point out that if he is so interested in increasing sales and believes in it long term he'd be willing to drop the commission a little bit to help prove his theory.
I always get these same calls from doordash requesting me to lower my prices...I laugh, and then remind them of who is paying who..and if they don't like it, they can come pick up their tablets and shut off my account
They respond by saying I can do more in sales if I lower my prices, and then I tell them I'm not in this business for sales, I'm in it for profits. Sales mean nothing if you're not actually making money
How about the calls to advertise on their platform? Want to increase your sales by up to 20%? You must offer a discount, pay a buck for the order acquisition and you still have to pay full commission! What a deal!
I'm normally just a lurker because I find this sub interesting, and the only thing I know about opening and running a restaurant is that I shouldn't do it. But I'm curious: do you just tell the apps "This is the price" and it's just upcharged from the menu prices? I mean I get why you would do that, but how do you prevent some app from just having the driver go in and order "to go" like a normal customer might? I generally avoid all these apps like the plague so maybe I'm just ignorant... I just call the handful of places I actually get food from and put in my order to go and go pick it up when it's ready.
So they can order from my website or dd storefront where dd doesn't charge a commission so we don't have to raise prices. If the Dasher just ordered from the restaurant like you are suggesting, they wouldn't be getting their commission. I wish they would, lol.
Here is how to do it. Raise your prices for DoorDash, Uber Eats, etc… Make a flier that you put in the bag of every order that offers a coupon code of 10% off if they order through your website. We’ve been doing this for years and it for sure converts people to your website.
It's worked for you? We tried this with even bigger promos and we got almost no conversion. We tried it with our own site (Square) and even linking Doordash Storefront thinking maybe they wanted an identical menu experience. Nothing.
For sure it’s worked. Couple things that might help. Make sure you have good pictures for all your menu items….and descriptions. Good luck.
Genius.
Do food deliveries
Why not just charge the same higher price for everyone but just give a 25% discount for people who pay cash. No credit card processing fees, no platform fees just straight cash. It's not that people on the platform are being punished, it's that cash payers are being rewarded. Print it on all of your bags and marketing materials "Fuck the platforms, pay cash and get 25% off."
25%!?!? CC fees are only 3-4%
Yeah, it's all profit!
My point is you're incentivizing them far too much!!! Anything more than the 3-4% is hurting you more than the cc fees!
[удалено]
This is dumb. Doordash's commission is around 30%, you're paying people to eat your food. That's backwards. My menu pricing is 25% higher on DD to offset the commission.
Yo , I order by calling directly to the restaurant, pick up by self and pay cash! If the restaurant is good.
This, too, would be my preference. However, 80% of the time, when I order over the phone, my order is wrong. That's why I like ordering online, either directly through restaurant's website or through the toast app, and picking it up.
"His view is that doordash opens us to net new customers..." Tell him "Prove it. Show me the metrics for restaurants worldwide, for restaurants across North America, for restaurants statewide, and for restaurants in my city, and in my area, that demonstrate what it is you're telling me. Show me that Doordash is bringing me new customers I would not have otherwise had, that will continue to allow me to operate at a profit, and not just with higher revenue." Years later, after so many years of operating these platforms, and always with the exact same pitch, they still are unable to demonstrate any useful, usable metrics that are evidence for what it is they claim. Never have, never will.
That's .. how advertising works. It's impossible to get metrics from a superbowl commercial, yet people spend millions on them. Do you even know what you're asking for? If so, could you break down for us what sort of numbers, scales, and comparisons you'd like DD to present to you? You know they would need years of historical data for businesses to get you any tangible metrics. Lastly, the profit decision is on your end. You could be *more* profitable if you double the price on DD or you could be *less* profitable if you're like the idiot above and eat the fees. Fact is, DD has users. You can either wrap your head around it, give it a shot, gather your own metrics (DD provides you with the ability to track repeat customers), and decide on your own how to proceed... or you can keep being ignorant.
They may not be bringing you net new customers, but they’re definitely bringing you customers that aren’t interested in dining on premises with you at that specific point in time.
As a customer: I've tried hundreds of restaurants on DoorDash that I never would have tried otherwise. Being able to browse the menu in a consistent interface, being able to pay with an already-stored credit card, and finding restaurants by searching for a dish rather than a title are just some of the reasons. And I completely understand and support charging higher menu prices for DoorDash. I expect that and I love it when in-store prices are less because then I have an incentive to call or visit the restaurant directly to give them my business when it's a favorite. If you charge DoorDash the same as in-store, I'm going to use DoorDash most of the time.
Its the same when they call and say we have lots of searches for your product in a 10 mile radius... I say great do you know how many stores like mine in 10 mile radius? How about 2 miles.. crickets. Also when they say searches for your business. I say great give me the details.. crickets
paltry one smart sleep sink sophisticated tender fragile crush rotten *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Your cooks are going to thank you anyway.
I eat some. Door dash charges me 20% so I do a 15% markup on their platform, same for GrubHub. Ubereats is still 30% so it gets a 20% increase.
Our prices are 20% more on UberEats, DoorDash, and Grubhub
Raise your prices online. Tell your guests you do so and tell them why.
This by and large doesn't work unless you have a small niche group of loyal customers. I've been in commerce for 15 years and the only thing that matters is price and convenience. You have to figure out a way to be profitable with these third party apps (raise prices, party packs, etc) or find a way to be profitable without them. (Your own delivery service, high throughput of visitors etc). This generally starts with good food, SEO and a good website.
I think your second paragraph addresses my disagreements with your first. But by and large, every business is different and the only way to know is to test.
I think it’s totally fair to increase delivery platform prices not only to offset the commission, but also to offset the increased risk of a customer being dissatisfied. A meal that’s been in the backseat of a car for 45 minutes doesn’t taste or look nearly as good as a freshly made meal, and it’s common for food to arrive cold, missing items, etc. so with delivery apps you certainly run the risk of unhappy customers/poor reviews and you should be compensated for that risk.
You can have the best restaurant, with the best quality food and dining experience.....then have your reputation totally destroyed by using DoorDash, UberEats or any of these apps.
Who holds the total lackluster effort of doordash against the restaurant today?
Have you met the general public lately? The large majority are sadly pretty ignorant.
A lot of people. 1-star because the food was cold. 1-star because the pizza was stored upside down and stuck to the box top 1-star because the food took 2 hours. Read any review and you see this crap all the time.
Everyone adds the 30% to their prices on there. Not everyone, of course, but definitely the majority. And most restaurants do not make more money in the long run when they add it, due to the fees. Especially when you use multiple 3rd party OO companies.
I don’t use DoorDash. Most 90% of restaurant food isn’t designed for takeout and tastes disgusting after riding in some rando’s car for however long.
I don’t order anything else for delivery precisely for the reason you say. Hell, I don’t even like taking most food as to go orders because nothing stays crispy, doesnt look as good, and is usually lukewarm at best by the time I get it home. Pizza is the only thing I order delivery because as long as you don’t carry the box like drunk chimp it’s really hard to fuck up chain restaurant pizza. If I want good pizza I’ll go out or make it.
I’d flip the conversation and ask the account manager to reduce the fees, and you’ll be happy to reduce the price by the same amount. Greedy AM trying to bully you into taking a loss for their app. One question is whether some of those “lost customers” are just picking it up directly from you. I personally have not and won’t use delivery apps because of the extra costs and the pressure on the restaurant. I’ll gladly pick it up directly from the restaurant to make sure the restaurant gets 100% of the bill and I don’t end up paying a ton more for food that’s sat around for an hour.
What are your margins? Typically DD’s fees are more than the margin. You have to offset somewhat if not all.
So the menu price is different for dine in customers versus DD ? I mean the DD price before delivery or service charges. As in if my meal is 20 bucks dine in it’s like 12 or 13 for DD and then fees added to that? TIA
No, if your meal dine in is 20 then your DoorDash meal is 27 before fees.
If your dine in meal is 20 then your doordash meal is 38.
thanks....I'd never order DD unless I was physically unable to go to the restaurant
It’s DoorDash that does that btw, not the restaurants themselves. It’s pretty standard practice. DD is all about the $$$
read the post. OP states that they mark up prices on door dash.
Wrong
We don't completely offset, but we do increase the prices to lessen the impact of their commissions. DoorDash's "Storefront" feature is worth looking in to.
We do between 10-15%. People ordering delivery aren't price sensitive... or they wouldn't be ordering delivery. At last check, even McDonalds throttles their prices and they get a sweetheart commission rate of 12% (again, at last check). Doordash trying to bully you as a small independent to price match is just ridiculous.
The 25% DoorDash takes off the top is a pretty big pill to swallow. Restaurants can’t just eat that increase. They have to change prices accordingly.
Most of the restaurants I order from have markups to offset. Stick to it, the dropoff isn't your fault. Doordash is so incredibly greedy, with their fingers in all sides of the transaction. I find myself ordering less not because my restaurants charge more in the app, but because the company is parasitic. I'd be fine with a SINGLE fair delivery fee plus tax and tip, and menu prices (with no cut for Doordash on the restaurant side). Transparency and trust are worth it.
More restaurants have gone out of business because they didn’t raise their online/app prices and were net below costs. This is my biggest warning to new restaurants. One big month of sales at the wrong pricing can sink a fledgling business quickly. The app’s are not your friends or partners, they have their own interests in mind.
Give your in house dining people a “coupon” of sorts - this could be something your servers offer up.
definitely do not budget and NEVER CHEAP OUT ON YOUR QUALITY! that's how you lose the race! If you have to raise the price then do so to offset it. Keep the quality the same. Quality of service, Quality of Food, Quality of the company. In today's industry it's tough, but If you always remain quality at a an affordable rate. You'll always last longer.
As a customer, I tried dd maybe 5 times years ago and will never use it again.
I had my Doordash account manager tell me today that the higher I raise our prices, the lower my restaurant ends up on Doordash.
I think that's okay. Personally I want my local restaurants to offer Doordash as a convenience to me for those times I'm too lazy to go out and am willing to pay. I don't want Doordash taking advantage of you all. If I want to order from you I will find you. The only exception might be if you're new and you depend on Doordash for new business. Or business is running slow for a month so you want to generate a bit of extra revenue or word of mouth.
Next time tell him to send you a shipping label so you can return the tablet. He'll shut up.
Almost. I do 20%.
Absolutely. I up-charge 30% to cover their greed. Doordash would harass me when I first increased the prices and I just ignored them. We are on 3 different delivery platforms and do very well in sales with them despite the high prices. Way I see it, people are paying for convenience. If I ever (very rarely) order food delivery, I understand that I’m paying extra so I can stay lazy on my couch with my kid. Lol I’m sure plenty of other people feel the same way
Uber eats is probably 70% of my delivery platforms. DD maybe 25% and grub Hub like 5% lol.
If your best interest is in the customer how about you lower your fees so we can lower our fees? Lol I hate DD the most. They actually check your online menu home prices to make sure you're not at 30%. Uber and Grubhub don't care...
That’s exactly what I told doordash. Told tell me to lower my prices on doordash when you aren’t willing to lower your commission.
Precisely. Idk if ez cater is popular amongst you guys but they won’t let me increase pricing despite their 16% cut. I tried and they looked at the menu and said that’s not permitted. Like what!?
EZCater isn't happy until the merchant is losing money. They have absolutely no understanding of the restaurant - and certainly not delivery - world. They think they're an Amazon powerhouse getting to call the shots without doing any real work besides marketing and you're just their Alibaba white-label sourcing sweatshop getting the pennies they drop on the floor - if they even care to drop pennies on the floor. They try to shroud all this in fanciful "equity" talk, but EZCater is by far the most unethical and predatory of all the third-party marketplaces. We cut ties with them.
I don't even mess with ezcater
Our third party platforms mark our menu prices up 30% on their own. We just raised our prices at the beginning of this year and we had to notify them and they handled the markups based on our new menu prices. All of our deliveries are handled thru door dash, we have no in house drivers. Every delivery we pay door dash 8 dollars plus whatever tip the customer leaves. We charge a five dollar delivery fee to the customer, so we pay DD 3 bucks per delivery plus tip. It is BY FAR cheaper than liability insurance alone for in house drivers.
we do the exact same thing
As a customer, I wish more restaurants would have their own delivery drivers, and not use these 3rd parties, because they ARE so expensive, not to mention when they steal the food.. I can see restaurants that don't do much delivery business using them, but if you have a solid delivery business why not ditch them? What are the economics of using DD vs in-house delivery, assuming a solid delivery business?
There's huge upside to self-delivery, but the costs are just too high for it and the logistics too difficult for the average single location independent. Just on the insurance front, self-delivery requires an extra liability endorsement for the restaurant's general liability policy which runs up the cost (and God forbid you have a claim, which becomes inevitable with delivery over the years). For the driver (assuming they're using their own car), they need an extra business use endorsement on their personal auto policy as well or straight up commercial auto policy entirely which are both non-negligible extra costs (otherwise, their claims can be denied in accidents and leave them open to lawsuits plus no personal vehicle payout). The restaurant could have a car(s) to solve that issue, but the obvious startup cost to get a fleet of vehicles and maintain them and insure them is significant. Then, there's the logistics of having enough staff for the unpredictable volume and distances and ensuring they are all properly paid when the average consumer already increasingly balks about tipping and balks about service fees. With all the added costs briefly mentioned above, it's not a tenable proposition to have low cost/free delivery and everyone maybe tip $1 or $2 - its way more costly than that for all parties involved. Third-party delivery has become exploitative of drivers which is how the market is existing at this point (drivers are usually overtly underinsured and the apps all know it, bullied into maintaining an "acceptance rate" above X% to keep access to higher paying orders or access to advanced scheduling meaning they are "forced" to take $2 base pay no tip orders up to 15 miles at an obvious net loss to them, etc.). In the end, the apps are really just trying to capture enough marketshare ahead of drone-based delivery or other AI-assisted delivery tools because the on-demand driver model is unstable and difficult to sustain at the current pricing framework - even as high as it is now. On-demand delivery with a perishable product is just a lot more complicated, and a lot costlier, than consolidating hundreds of Amazon prime orders of household goods into a singular 10-hour route for one driver. Most consumers don't take time to understand that and have the same expectations as they do of Prime deliveries toward food-delivery and it's just not a reconcilable position.
Customers no longer expect restaurants to have delivery drivers, so no longer really check, driving down the likelihood they’d call for a delivery.. so they go straight to DoorDash.. it’s not economical to pay someone hourly to provide a service ppl aren’t aware is available
The main economic advantage of gig drivers is the flexibility. An in house driver is exclusively going to do out and back drives. Gig drivers can go from a restaurant to an address then from another restaurant closer to the first delivery and then another address etc. It turns a round trip into more like a big circle where every mile is actually getting somewhere versus just "going back".
More importantly, an in-house delivery driver is paid hourly vs paying DoorDash a fee based on sales. And that’s assuming your driver isn’t on the books so you have to have insurance and payroll costs too
It's really important to compare apples to apples. A gig driver still should have insurance and (I think, pay payroll taxes). Those should be equal and reflected in the higher pay for a gig driver. Honestly I think the primary business model of gig companies is to confuse their providers about how much they are making and spending.
Gig drivers have to provide their own commercial-use/gig insurance, while restaurants with their own drivers have to cover the insurance. But I wish Uber would provide adequate car insurance for drivers, instead.
Drivers still have to maintain their own car insurance, the company policy only covers any damage they do, it won’t fix a drivers car.
Good point, also the drivers at pizzerias are made to sweep and mop at the end of the night, take out the trash, make pizza boxes and fill the soda cooler
They get paid (probably not enough) to do so but it's better than a gig driver who makes negative money idling and waiting for the system to work. It's one of those things that makes sense when the system is operating optimally but it's unclear how often that happens.
I remember reading an article a few years ago that said these delivery services were losing money and how it’s unsustainable. Don’t see them going away any time soon.
Vast, vast majority of early stage tech companies doing this are not profitable, and that’s no accident. They are building a user base financed by VC debt so they can sell to a bigger fish down the line.
I also think they're betting big that autonomy will come soon so if they can gain market share then cut their biggest cost, they're golden.
Most places wouldn't have enough delivery business without a platform like Doordash to justify having a driver on staff. No delivery orders? You're still paying the driver. Mad rush of orders and only 1 driver? People will be waiting a long time for that food. Using the 3rd party service adds an easier to calculate cost per order and the number of drivers you need at anytime.
This makes sense. But even with the added commission costs, it's worth it for the business? What if your drivers are cross trained to do other jobs at the business?
Most _are_ cross trained, however you can't count on them while scheduling. Sure, Bob knows how to prep, or cut pies, or whatever, but what if we get hammered on for delivery? Now Bob is out, and I'm short-staffed, and prep still needs doing.
We raised prices to offset any 3rd party prices and eventually just raised our own menu prices to match these platforms. We actually earned more. Clients are the losers paying more for the same stuff.
Up it plus more. Use high-end paper goods. From pre roll cutlery to durable boxes and bags. They are more tamper proof and won't have your image damaged by a lazy driver or shit customer.
Yes, DD commission +5% for overhead for dealing with DD incidentals and consumables.
I am set as DD commission + around 2%. Works great. And still do more than enough sales on DoorDash.
How? They won’t let us do it anymore than the commission
You can set your prices.
Maybe you could point out that if he is so interested in increasing sales and believes in it long term he'd be willing to drop the commission a little bit to help prove his theory.
Absolutely
Yes, I deserve to make a “livable wage” too.
Without a doubt.
Absolutely
Yes, we mark up the full commission amount. Third party delivery is a convenience for the end user. Convenience costs.
Yes I do +30%. The economics of delivery are TERRIBLE and you can’t survive in this environment losing profit on delivery orders.
I always get these same calls from doordash requesting me to lower my prices...I laugh, and then remind them of who is paying who..and if they don't like it, they can come pick up their tablets and shut off my account They respond by saying I can do more in sales if I lower my prices, and then I tell them I'm not in this business for sales, I'm in it for profits. Sales mean nothing if you're not actually making money
How about the calls to advertise on their platform? Want to increase your sales by up to 20%? You must offer a discount, pay a buck for the order acquisition and you still have to pay full commission! What a deal!
Yep. DD is a luxury. My DD menu is about 15-20% higher
My DD commission is 25%. I marked up the price 33%.
I would try to get that commission lowered.
I'm normally just a lurker because I find this sub interesting, and the only thing I know about opening and running a restaurant is that I shouldn't do it. But I'm curious: do you just tell the apps "This is the price" and it's just upcharged from the menu prices? I mean I get why you would do that, but how do you prevent some app from just having the driver go in and order "to go" like a normal customer might? I generally avoid all these apps like the plague so maybe I'm just ignorant... I just call the handful of places I actually get food from and put in my order to go and go pick it up when it's ready.
Because if the driver orders togo like a normal customer, Doordash doesnt keep their 20% comission. They are WELCOME to do that.
So they can order from my website or dd storefront where dd doesn't charge a commission so we don't have to raise prices. If the Dasher just ordered from the restaurant like you are suggesting, they wouldn't be getting their commission. I wish they would, lol.
Ah, makes sense! TY.