How will delivery companies and delivery-dependent businesses be impacted by changes in home delivery demands?
Delivery is an evolving landscape. Pizza and Chinese food are no longer the go-to delivery options as a wide array of apps and services provide options from all walks of cuisine—and beyond. What does this mean for companies that depend on their own drivers to make deliveries? And what does it mean for the future of delivery in general?
Promoting the Brand
Many restaurants are hesitant to yield their delivery services to delivery companies, because, well, it’s free advertising. Trying not to play favorites here, you remember Pizza Planet from Toy Story? You don’t need to have seen the movie more than once to remember the rocket ship on top of an otherwise unrecognizable vehicle. Maybe it’s the reminder of their delivery services that drives you to pick up the phone. Maybe it’s something more subliminal. Either way, companies like people knowing their pizza has arrived the moment the car pulls up with its rocket ship or what have you.
An Issue of Trust
Over a third of employers are unsure of delivery companies with their own platforms. Where does the mistrust come from? Let’s use the example of Mark. Mark is a 17-year-old who submitted a resume and sat through a job interview. He drives his mom’s 1995 Toyota Camry and has been working with Pizza Planet for a few months now. Does he like his music loud? You bet. Does he take his turns a little too tight? Probably. But Mark has been a reliable delivery guy since he started, and the day Mark isn’t? The day he gets in an accident or his vehicle gets commandeered by a posse of loyal toys, Mark will face the repercussions.
When employers outsource their deliveries to delivery companies with third-party apps, their resume is maybe the number of star-ratings they have. Their interview is the food handoff. There’s no guarantee they’ll be seeing that driver again. As for accountability? If the food is late or just doesn’t show up? The employer can leave a bad review for the driver, but they’re also likely to receive a bad review for the negative experience they felt was out of their hands to begin with.
Unfortunately for employers who are wary of third-party delivery services, they may face issues with how they reimburse their drivers. See, Mark has this job so he can start saving money for college. Not only that, but he is still paying his mother for that Camry. And he’s noticed something in the short amount of time he’s worked for Pizza Planet. He’s spending more on gas than he’s receiving from the company to pay for it. He’s brought it up to his manager, but the manager assures him his tips will more than make up for the loose change he’s losing out on.
This is when Mark, with the help of his mother, takes lawsuit action against Pizza Planet. And the company ends up in a class-action lawsuit. Now they must pay out money owed and fines as decided by the presiding judge.
What does this mean for businesses that rely on delivery?
The third-party delivery services are growing, and still have room to do so. But in-house delivery doesn’t appear to be going away any time soon. So what does the future hold? It looks like a combination of both options, hopefully with better reimbursements for all drivers. If you work for a company that employs or is affected by delivery services, check out our State of Delivery Report. It spells out everything outlined here and a good deal more.