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Third Party Food Delivery for Restaurants: A Double-Edged Sword

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03 Aug, 2023

Third Party Food Delivery for Restaurants: A Double-Edged Sword

Business

The advent of food delivery platforms such as UberEats and DoorDash has transformed the restaurant industry in the past decade, with tens of millions actively using the services just this year. While these platforms seem to foster convenience and comfort for the consumer, business owners should be wary of utilizing them. The recent popularity of these apps has come with glaring disadvantages for the restaurants they “partner” with.

1. High Commission Fees
One of the primary drawbacks of partnering with the major third-party delivery platforms is the exorbitant commission fees they charge. Restaurants often have to relinquish a significant portion of their revenue, ranging from 20% to 30%, to these platforms. For small and independent establishments with tight profit margins, these fees can severely impact their bottom line and hinder their ability to grow and thrive.

2. Loss of Control over the Customer Experience
Successful restaurants invest substantial effort in crafting a unique ambiance and experience for the customers. However, when relying on delivery platforms, the intended experience can be tarnished in a way that damages the their reputation. Restaurants lose control over the presentation, handling, and delivery of their food. As drivers are paid minimal amounts by these apps, the quality of service drops drastically. Consequently, any issues such as incorrect orders or mishandled items become a stain on the restaurant’s name, even if they aren’t directly responsible for these shortcomings. This loss of control over the customer experience can lead to a disconnect between the restaurant and it patrons, potentially impacting long-term customer loyalty.

3. Increased Competition and Dependency
While UberEats and DoorDash run under the guise of providing a wider customer reach, they simultaneously expose restaurants to intense competition. With countless establishments vying for visibility on these platforms, it can be challenging for restaurants to stand out from the crowd and attract customers.

For those customers who are already fans of one business, these apps instead push them to explore other popular options, leading to fewer returning patrons and strained customer loyalty. Furthermore, by relying heavily on these platforms for their delivery services, restaurants become increasingly dependent on their presence. Any changes in policies, commission fees, or disruptions in service can have a profound impact on a restaurant’s operations and profitability. While UberEats, DoorDash, and similar food delivery platforms offer convenience and access to a broader customer base, they come with their share of disadvantages for restaurants that should not be overlooked.

The high commission fees, loss of control over the customer experience, and increased competition are critical factors that establishments must consider when deciding to partner with these platforms. Striking a balance between leveraging the benefits of food delivery and maintaining the integrity of the restaurant experience is crucial for long term success in an evolving industry landscape.

Fortunately, at CoPilot Digital, we understand the need for this balance. With our marketing team, we can push your restaurants to new heights with personalized solutions at affordable prices. Contact us to learn more about how our experts can help your business thrive in the industry!

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