Is third-party delivery the way to go?

Tony Gemignani
World-champion Pizzaiolo and Pizzeria Owner

I have a forecast that one day our industry will not have delivery drivers who are directly employed by our restaurants. Instead, I believe third-party companies will soon be nationwide. This started with a small group of companies way back in the day. One of them, which is still going, is called Waiters on Wheels. Now it’s moving in our industry like a speeding bullet. Companies such as Caviar, Postmates, UBER Eats, Eat 24 and so many others are jumping into this arena. With so many of these start-up companies popping up nationwide, you will soon see the in-house delivery driver gone from many pizzerias.

I use a couple of different ones in the same restaurant. Just think about it: no more delivery insurance, no labor, no order taking, no more counting out or reconciling, no more purchasing of delivery bags, no marketing expense. Would you offer a five-percent delivery fee that would go to that one third-party person and give that company 10 percent off that order? Or just 15 percent off and give it to that company?

I would and I do.

Just think about having three, four, six of these companies out there hustling for you and advertising for you. These contracts can be structured and all of them can work for you. Trust me, it’s coming and it’s even getting bigger than this. Try bulk orders where companies such as those listed above buy 30 to 60 (even 200 at times) orders from you at a set price. These are pre-determined meals like three meatballs and garlic bread for $8 (valued at $9.50 in your restaurant) that they pick up at 11 a.m. before you even open. The third party delivers them all at one time to several companies. This type of gorilla ordering has already been set three weeks prior so you can be ready on that particular day for such a large bulk order.

Would that be helpful to your business?

Try the 24-hour pre-order catering menu that they have sold for you the day before for $500 to $1,000. And this order was delivered to companies all over your area by this third-party company. They work on commission and that 10- to 15-percent mark up or discount, however you structure it. These guys are working for you. If it’s not right you fix it. It’s so detailed that you get daily reports on performance and monthly meetings on how to make it better. It’s such a detailed report that you will know everything from pick up rate, ready and delivery efficiency and things like customer feedback (including graphs and pie charts). They are on our side.

Many drivers will move to working for these companies, meaning drivers that may have worked for you are starting to get jobs elsewhere. It’s very much like the impact UBER has had on taxi and limo drivers.

There have been some issues with this, but the evolution and detailed development has gotten better and better. It has started in California and New York. I’m seeing it in San Francisco, Sacramento and Las Vegas. When there have been problems, I have seen things get addressed and fixed immediately. Changes are coming. Be on the lookout.

RESPECTING THE CRAFT features World Pizza Champion Tony Gemignani, owner of Tony’s Pizza Napoletana in San Francisco and Pizza Rock in Sacramento.  Tony compiles the column with the help of his trusty assistants, Laura Meyer and Thiago Vasconcelos. If you have questions on any kitchen topic ranging from prep to finish, Tony’s your guy. Send questions via Twitter @PizzaToday, Facebook (search: Pizza Today) or e-mail [email protected] and we’ll pass the best ones on to Tony.