Home delivery services


5th August, 2019

Is home delivery doing restaurants a disservice?

Home delivery services have found themselves in a bit of hot water lately surrounding concerns over their health and safety risks as well as unfair contract terms with restaurants who use their services, writes Renae Smith.

In Australia, UberEats was the subject of an ACCC investigation that saw the company agree to change and unfair condition which meant that restaurant owners were liable to refund customers for errors made by the program’s delivery drivers.

In the UK, the BBC made headlines when it successfully joined the delivery platform as a ‘fake’ takeaway venue without any identity, bank details or food hygiene rating checks.

Since then, UberEats has amended its onboarding process after releasing a statement describing the company as “deeply concerned by the breach of food safety policy,”. UberEats now demands all new sign-ups have a valid food hygiene rating.

It’s not just UberEats that restaurants have an issue with. Deliveroo and Foodora have had their share of bad press over ‘wage theft’ and new contracts that shifted the liability of incorrect orders to the rider rather than to the platform itself.

We spoke with some restaurant owners to find out what they think of these platforms and have also listed some key factors to consider when it comes to deciding if home delivery services are right for your business.

Will you be gaining more customers?

The Thirsty Wolf is a casual bar and eatery in Sydney. When they were located on King Street in Newtown, they found themselves in a ‘dead zone’ when it came to passing traffic. After weighing up their options, they decided to engage several home delivery companies to help them reach nearby diners who were unlikely to walk past the venue.

Very quickly it became apparent that this was the right decision for them financially. As they looked around for a new location for their venue, the home delivery service kept them afloat by increasing their food sales by several hundred percent.

READ: Why you shouldn’t rely on one platform to build your business

Many other venues across Australia have similar feelings when it comes to home delivery services. They believe that these apps allows them to reach customers who would not usually dine at their venue, or if they have a venue that not designed to cater for many dine in guests, the home delivery service allows them to sell more food than they would if they only served customers face to face.

Salmon & Bear found that once they offered home delivery, the venue saw an increase in food sales, but almost simultaneously noticed a dip in decline in their ‘in-venue’ traffic. It turned out that once the option was available, customers chose to dine at home rather than visit the venue. They chose to cancel home delivery to encourage customers to come back into the venue for the ‘full experience’.

It’s essential to consider what you hope to achieve by using a home delivery service and then keeping a very keen eye on your business financials to work out if you’re actually making money, or if the association is actually one that is not working for you.

Does it enhance with your venue’s offering?

Jared Merlino owns some of the best small venues in Sydney including Kittyhawk, Big Poppa’s, The Lobo Plantation and his latest venue, Bartolo. Bartolo is an Italian restaurant and bar that offers a modern spin on traditional Italian dishes such as homemade pasta, ragu and fresh Italian focaccia.

Merlino does not offer home delivery, and in fact, never plans to.

“We believe that most great food does not travel well. Additionally, the room you dine in and the service you receive is half of what makes the Bartolo dining experience so special,” he said.

“On top of that, I really worry about people judging the Bartolo experience on something they may eat at home after its travelled half way across Sydney.”

Many venues share the same concerns when putting their reputation in the hands of a third-party company. With the never-ending issues surrounding how long it can take for food to be delivered and then the arguments about who is responsible when food doesn’t arrive in the same condition it was sent, there’s a lot to consider.

What’s your goal?

Before deciding whether to sign up for a home delivery service or not, you need to first understand your goal. If your goal is to pump out food that travels well, and to sell that to as many people as you can, then delivery might be for you. If your goal is to create a more curated experience for your customer or offer food that doesn’t travel well, then you may need to consider whether delivery is for you.

READ: Should you sign up to a home delivery service?

Whatever you decide, watching your profit margins and listening to customer feedback is an essential way to monitor the situation and to catch any problems early.