Why Restaurants are Giving up on Third Party Delivery Service
Why Restaurants are Giving up on Third Party Delivery Service

With more people looking out for convenient eating options, the demand for delivery is on rise. To cope up with this demand, many restaurants especially QSRs are opting for third-party delivery services. With rapid expansion of delivery aggregators like Swiggy, Foodpanda, and UberEats, the restaurant business is a sure shot to grow, and thus one can witness many outlets coming up with the delivery only model. Indeed, ordering restaurant meals for delivery is becoming an everyday part of life for many.

For consumers, they provide an ever-broadening range of eating choices delivered right to their door. Presently, on an average 40 percent of the sales in restaurants are driven through these delivery fleets. However, for the restaurants' owners, these services come with a mixed blessing added with some complications. Nitish Jha, Founder of World In a Box Gurugram says, “Third-party delivery services are the most unreliable fleet for last-mile deliveries as there is no sense of ownership and they do not care for customer delight or experience unless it is by aggregators like Swiggy and Zomato who are in a war against each other to win users.”

According to Jha, with an unrealistic payout structure by these third-party vendors which makes a delivery boy earn 22-30k a month, it becomes difficult for many restaurants to hire their own set of delivery employees.

Another major bane that many restaurants are facing from the third party delivery is the non-accountability of the order journey. “We have no means to track when exactly the order was delivered, in what state was it delivered and with what ease was the order delivery co-ordinated with the customer. All these factors constitute for a major impression on the customer's mind and a very difficult task for the customer to acknowledge the accountability shift when it comes to the delivery through agencies,” said Satvik Ahuja, Co-Founder, NutrioBox which operates in Delhi and Gurugram. Nutriobox is currently receiving 50 percent of their orders through its own channels like the website, on call and walk-in.

Also, these third-party agencies are adopting systems in which they aren't sharing the customer data with the restaurants. This leaves the restaurants handicapped with no means to know their customer database and accordingly tweak their marketing campaigns for higher repeated sales.

In a fine dining restaurant like Mother India, Delhi, only 15 percent of the total sales are formulated by the third party services. “There are various factors that can affect the potential delivery like traffic, excessive orders, shortage of delivery personnel, etc. And the delay in orders can haunt the reputation of the brand,” adds Nandini Neeraj, Owner of Mother India Restaurant.

Where restaurants have no way to engage with the customers taking advantage of the delivery services, it is important for them to be able to deliver personalized messages. While the performance of the different delivery services varies by different agencies, it thus becomes a hand picking situation for the restaurants while choosing their aggregators.

When faced with the question of whether to pay for a third-party delivery company or not, factors like highest optimized taskforce, faster pickups and delivery during peak hours, pay-out structure, rider management and customer feedback mechanism should be taken into serious consideration. “The foremost factor should also be the commission that these agencies demand per order. In QSR business especially, margins are quite low and it becomes imperative to wisely share it,” Ahuja adds.

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