ALEXANDRIA, Va.—Third-party delivery apps dominate the food delivery scene, but smaller “mom-and-pop” delivery companies may now have a seat at the table, reports Fast Company.
A nationwide effort called LocalDelivery is launching that unites smaller, local food delivery companies into one website and app, intended to provide “an experience more like that of meal delivery’s giants,” reports Fast Company.
Zuppler, an online ordering technology provider that built the LocalDelivery site and app, had the initial idea to aggregate smaller food delivery companies, and the Restaurant Marketing and Delivery Association (RMDA) is spearheading the launch.
“You’ve got local marketplaces, and then you’ve got one combined national portal that can rival a DoorDash,” Zuppler founder and CEO Shiva Srinivasan told Fast Company. “You’re talking about potentially adding about 65,000 restaurants in this national portal.”
For comparison, DoorDash has about 500,000 restaurants through its services, while Grubhub has 320,000, but many of these restaurants are chains, and though local delivery companies aren’t able to close on deals with national chains, the RMDA is hoping that, as a united front, it can close such national deals for its membership.
Currently, LocalDelivery has about 8,000 restaurants in its system, and Srinivasan plans to bring on 3,000-4,000 restaurants per month once the full service is up and running. An app launch date has yet to be announced, but the RMDA previewed the app at its national conference this week. The website is functioning, and users can be matched with a food delivery service if they enter their ZIP code.
Local food delivery services claim to offer better terms for their restaurant partners, reports Fast Company.
“When they’re spending with us, the money is staying local,” Chintan Patel, the owner of food delivery Meals Now, told Fast Company. Patel founded his company in 2019—about six months before the national providers entered his delivery area. “When you’re spending money with these big publicly traded companies, everybody else is benefiting except the community.”
Meals Now charges restaurants a 10% fee on the cost of the order, while Grubhub charges its restaurant partners a 5% to 15% marketing fee, plus a delivery fee of 10%. DoorDash and Uber Eats each have tiered programs for restaurants that start at 15%.
However, customers costs for local delivery companies aren’t always cheaper than the big guys. Meals Now, for instance, charges customers a 10% delivery fee. Another local delivery company, Phoodiis, charges a 10% service fee, plus a delivery fee ranging from 50 cents to $10, depending on distance.
According to NACS’ “Last Mile Fulfillment in Convenience Retail” report, only 61% of retailers are satisfied with their third-party delivery partners. Concerns include high fees, little access to consumer data, difficulties delivering age-restricted products and service and operational issues. Read more about these challenges and what c-stores are doing to make delivery work for their businesses in “Delivering Convenience” in the December 2021 issue of NACS Magazine.