3 Ways Third-Party Delivery May Be Bad for Business

The critical partnership your delivery game is missing.

Delivery is now a fact of life no longer relegated to pizza joints and chinese food, but covering a breadth of industry segments from fast casual to fine dining and everything between. Customers want food brought to their door, and they want it to be of equal quality to what they would eat in the dining room or carry away themselves.

For operators, meeting the demand for delivery while ensuring consistency and quality has proven a challenge—third-party delivery partnerships not only cut into a restaurant’s bottom line, but they also risk damaging brand reputation through mishandling of food.

“Operators are very concerned with the sacredness of their brands,” says Scott Absher, CEO and cofounder of ShiftPixy. “There are horror stories about customers who received no food, cold food, or half-eaten food from third-party delivery services, and the restaurants might not hear about it until a bad review comes in. To add insult to injury, operators are usually giving up 30 percent of each order.”

To mitigate that risk of brand damage, many operators are relying on their internal staff to handle deliveries. However, that also presents costly challenges associated with training, licensing, and insuring delivery drivers.

“Full-service restaurants have unpredictable delivery patterns which make it difficult and expensive for underwriters to provide cost-effective coverage,” Absher says. “Operators are disadvantaged compared with pizza delivery companies, which are more competitive for the necessary insurance and therefore tend to be more profitable in the delivery space.”

However, successful brands are beginning to implement technology that tackles these challenges. ShiftPixy, for example, is a labor management and scheduling platform that leverages the human capital already on premises to optimize the delivery experience for operators and customers.

Restaurateurs can appoint two employees per shift as delivery drivers, and ShiftPixy provides comprehensive commercial driver coverage and liability protection—as well as complete route mapping—for a flat rate of $5 per order.

“By sending a uniformed employee to complete customer transactions, operators can ensure better delivery satisfaction,” Absher says. “Operators who want to keep delivery in-house for quality control no longer have to purchase insurance for the full year, but can pay per ticket, as needed.”

Next month, ShiftPixy will roll out a sharing mode, through which the company’s artificial intelligence will constantly monitor operators’ scheduling dashboard and identify delivery driver vacancies if, for example, a staff member calls out or quits unexpectedly.

“Another problem operators faerce with in-house delivery is an almost toxic level of turnover,” Absher says. “ShiftPixy aims to address that human capital problem by pooling qualified employees based on location and population density and assigning them to any open positions for which they are available.”

Although operators are not obligated to participate in the sharing model, Absher says the mobile ecosystem offers a wide number of advantages to operators.

“Consumer demand for delivery isn’t going anywhere,” Absher says. “By managing in-house employees through a partnership which eliminates the administrative headaches of leveraging on-premises employees for delivery, operators will be able to participate more meaningfully and profitably in the new convenience wave.” l