I came across two articles today discussing restaurant delivery services, specifically in Seattle. One on Geek Wire and the other on The Stranger. Both of them were very different in the story they were telling which was interesting.
The Stranger talks about how Postmates is reeking havoc on the restaurant industry. Mainly causing “resentment” between the restaurant staff and the delivery drivers/couriers. The rift is around tips according to the article. The restaurant workers are missing out on any tips from the Postmates takeout orders that they would have normally gotten.
The couriers are getting some tips, but no tips are making it’s way to the restaurant workers. Postmates allows customers to enter a tip for the restaurant, but it’s confusing and not very clear how it works. So this tip doesn’t happen, ever. Apparently the way it works is there’s a $5 delivery fee which gets split 80/20 in favor of the courier. On top of the 20% ($1) of the delivery fee there’s also a 9% service charge on the order that goes to Postmates. The restaurant workers see nothing unless the courier leaves them something, which never happens.
If the numbers in the article are true the couriers aren’t exactly killing it on tips either. They get a $4 delivery fee plus an average tip of $1-$1.75 on average according to the article. So call it $5.50 per order. Seems like it would be tough to get enough orders in an hour to make it worthwhile, but I guess if you’re on a bike and not a car you don’t really have any expenses. Plus you’re exercising.
Click here for The Stranger article. There’s some salty language, but we’re all adults here.
The other article, more interesting in my opinion, was on Geek Wire about Amazon dipping it’s toes into the restaurant delivery market. As part of their new Prime Now service they are testing, with local employees, restaurant delivery.
If there’s any company that can figure this out it would be Amazon. They are already offering alcohol delivery in Seattle. In NYC they apparently offer delivery of prepackaged meals from a few stores, but you have to cook the meal once you get it, it’s not delivered hot. That’s the difference with the Seattle test.
It makes sense for Amazon to try this out, but it’s not like they can have a UPS driver swing by Chipotle and pick up a burrito on the way to your house. They’ll have to implement a delivery arm similar to Postmates. Now if they throw marijuana delivery into the mix they might have a winning combo.
You have to wonder how long these types of services will be affordable with prices inevitably going up across the board with minimum wage increases, increases in food costs etc. At some point I have to think that consumers would just assume go to the restaurant vs. pay the $5 plus 9%, plus tip on top of the meal price. But maybe you can’t put a price on convenience.