Do Restaurant Delivery and Booking Platforms Leave Anything for Us? Navigating Peak Times, Community Sizes, Product Travel, and Off-Peak Challenges… WTF Lee
1. Introduction: The Rise of Delivery and Booking Platforms
In the modern restaurant industry, delivery and booking platforms like Uber Eats, Grubhub, DoorDash, and OpenTable have become almost ubiquitous. They promise increased visibility, customer reach, and convenience, especially during peak times like football matches or major events. However, as I reflected on my experiences, particularly when operating in a smaller community with a large area to cover, I began to question whether these platforms truly leave anything for us, the restaurant owners.
Brief History: I remember when managing delivery was a relatively straightforward in-house operation. With the rise of third-party platforms, things changed, offering promises of greater reach during busy periods. However, the reality turned out to be more complex, especially in a less densely populated area where the challenges of product travel and customer satisfaction became more pronounced.
Initial Appeal: The platforms initially seemed like a great way to handle the spikes in demand during big events like football matches, but over time, the challenges and hidden costs, particularly in a smaller community, started to reveal themselves.
2. The Cost of Convenience: Commission Fees, Margins, and Staffing Challenges
One of the biggest challenges with using delivery and booking platforms is the high commission fees they charge. These fees can range from 15% to 30% per order or booking, which, combined with the cost of keeping staff ready during unpredictable demand spikes, can severely impact profit margins, especially in smaller communities where the customer base is limited and the delivery distances are greater.
2.1. Delivery Platforms and Their Fees
High Commission Rates: I noticed that platforms typically take 20% to 30% of each order, and during peak times, when demand is highest, this percentage felt even more significant. In a smaller community with fewer orders and larger delivery areas, the higher volume during events didn’t necessarily translate into higher profits once the commissions were deducted.
Impact on Profit Margins: With the cost of ingredients, labour, and overheads factored in, these commissions often left me wondering if the increased volume during events like rugby or tennis matches was worth the reduced margins, particularly when the logistics were even more complicated.
2.2. Booking Platforms and Their Fees
Per-Reservation Charges: Booking platforms, like OpenTable, or Groupon might also charge fees per reservation, regardless of whether the customer showed up. The impact of no-shows felt even more significant, especially during peak times when overstaffing to meet potential demand became a financial burden.
Staffing During Peak Times: During major events, I had to keep more staff on hand to manage the surge in bookings and orders. This increased labour cost, coupled with the platform fees, significantly reduced the net profit, even on our busiest nights. In a small town, the stakes were higher because the margin for error was smaller.
2.3. The Cost of Keeping Staff Engaged During Off-Peak Times
Balancing Labor Costs: One of the toughest challenges was maintaining a balance between having enough staff during peak times and managing costs when trade fell off afterward. After a busy night or weekend, I often had to deal with slower periods where staff costs remained high, but revenue dropped significantly.
Keeping Staff Motivated: It was difficult to keep staff motivated and engaged during off-peak times, especially after the adrenaline of a busy period. I had to find ways to keep everyone focused, which sometimes meant investing in additional training or incentives—another cost that ate into profits.
3. Control Over Customer Relationships in Smaller Communities
Another major issue I faced with these platforms was the loss of direct control over customer relationships, particularly during high-demand events when the sheer volume of orders could overwhelm our usual processes.
3.1. Customer Data and Communication
Lack of Access to Customer Data: These platforms typically kept customer data, such as email addresses and order histories, to themselves. This made it challenging to engage with my customers directly, especially during and after major events when building loyalty was crucial. In a village, where word of mouth is powerful, not having this data made it harder to build personal relationships.
Impersonal Experience: During peak times, , the personal touch that defined my restaurant was often lost. Orders came through the platform, and I found it difficult to connect with customers in the same way I could when they booked or ordered directly from us.
3.2. Brand Identity
Brand Dilution: My restaurant’s identity could easily become diluted when presented alongside numerous others on a platform. The unique atmosphere and personalized service that usually set us apart were reduced to a thumbnail and could mean the difference between being remembered or forgotten.
Dependence on Platform Branding: In some cases, customers began to associate their experience more with the platform than with my restaurant. The platform’s visibility and brand overshadowed mine.
4. Quality Control and Customer Satisfaction. During Peak Times in Small Communities
Maintaining quality control became even more challenging where customers were more likely to know each other and share their experiences, maintaining quality was even more crucial.
4.1. Food Quality During Delivery
Inconsistent Delivery Conditions: During high-demand periods, I noticed that once the food left my kitchen, I had little control over how it was handled. Sometimes, orders arrived late, cold, or damaged, leading to customer dissatisfaction—issues that were beyond my control but still reflected poorly on my restaurant.
Challenges of Long-Distance Deliveries: This meant that food was in transit longer, increasing the risk that it would arrive in less-than-ideal condition. This was particularly challenging with items that didn’t travel well, like certain fried foods or dishes that needed to remain hot. Maintaining the quality of the product over these distances was a constant concern.
Pressure to Perform: The rush during events like the Olympics meant that the kitchen was under immense pressure, leading to occasional lapses in quality. I often worried that these peak-time issues could drive away repeat business, despite our best efforts. In a our community, losing even a few loyal customers had a significant impact.
4.2. Booking and Seating Issues
Overbooking During Events: This often led to seating issues, where customers were frustrated by long wait times or being turned away despite having a reservation.
Customer Expectations: Customers booking through platforms often had different expectations—sometimes unrealistic ones—based on how the platform presented my restaurant. If these expectations weren’t met, obviously it negatively impacted our reputation.
5. The Illusion of Increased Visibility During Peak Times in Small Communities
While these platforms offered increased visibility, particularly during big events, I started to question whether this visibility was genuinely beneficial in the long run.
5.1. Competition Among Restaurants
Pay-to-Play Dynamics: To stand out during high-demand periods, I found that paying for better placement was often necessary. This added another layer of cost when competition was even more fierce. The visibility didn’t always translate into profitability once I accounted for these extra expenses.
5.2. Platform Dependency
Over-Reliance During Peak Times: As my business became more dependent on these platforms for handling surges in demand, I realized that I was increasingly vulnerable to their policies and algorithms. A sudden change in the platform’s terms of service or a tweak in its algorithm could dramatically affect my revenue. Where alternative sources of income are limited, this dependency was even riskier.
Lack of Long-Term Loyalty: I noticed that customers who came through these were far less loyal. They were more likely to be attracted by platform promotions rather than a genuine connection to my restaurant.
6. The Cost of Convenience vs. Building a Sustainable Business in Small Communities
As I weighed the costs and benefits, especially during and after peak times, I began to see a growing tension between the convenience of using these platforms and the sustainability of my business model.
6.1. Short-Term Gains vs. Long-Term Sustainability
Short-Term Revenue Boost During Events: Initially, platforms did bring in more orders and bookings during events like the champions, providing a short-term boost in revenue. However, as the commission fees, staffing challenges, and operational pressures became clearer, I started to question whether this boost was sustainable, where the customer base couldn’t sustain high costs over time.
Eroding Margins: Over time, the costs, began to erode my profit margins. What seemed like a beneficial partnership started to feel more like a necessary evil, especially when I considered the impact on my bottom line.
6.2. Building Direct Channels
Investing in Direct Ordering: I began to explore ways to build direct ordering and booking channels through my own website and apps. While it required an initial investment, I saw it as a way to reclaim control over my customer relationships and reduce dependency on third-party platforms.
Encouraging Loyalty Programs: By offering loyalty programs directly through my restaurant, I could encourage repeat business and build stronger relationships with my customers, regardless of whether it was a busy event night or a slow weekday. This was something that the platforms couldn’t offer and became a key part of my strategy to move away from them.
7.1. The Shift in Consumer Behavior
Adapting to Change: While delivery and online bookings are likely to remain popular, I believe that finding a balance between platform use and direct engagement was crucial. Consumers were becoming more aware of the impact these platforms had on their favourite local businesses, and some were seeking ways to support us more directly.
7.2. Reevaluating the Business Model
Diversification of Revenue Streams: I started to explore other revenue streams, such as catering, merchandise, and meal kits, which could help reduce my dependency on delivery and booking platforms.
Managing Staff Costs: I focused on finding ways to manage staff costs more effectively, including flexible staffing arrangements and cross-training employees to handle different roles during peak and off-peak times. This helped ensure that we were ready for busy periods without being overburdened during slower ones, which was especially important where the customer base fluctuated significantly.
8. Conclusion: What Do These Platforms Really Leave for Us?
After years of working with delivery and booking platforms, especially during times of extreme, I came to a nuanced conclusion. Yes, they provided convenience, increased visibility, and access to a broader customer base. However, these benefits came at a significant cost—both financially and in terms of control over my business. The key, I found, was to strike a balance. While it was hard to avoid these platforms entirely, especially during peak times, I realized the importance of not becoming overly reliant on them.