CNN has a story about the delivery disconnect that exists between customers who rely on it and restaurants that find themselves dependent on it to maintain viability.
Here's how CNN frames the story:
"Restaurants have a delivery problem.
"Early in the pandemic, when eateries were forced to shut their doors, delivery became a lifeline. Restaurant operators scrambled to set up delivery channels from scratch or promote ones that previously existed.
"But there was a reason that many restaurants hadn’t focused on delivery before the pandemic: Delivery is a pain. It’s expensive, since restaurants have to hire drivers or outsource to third-party providers like DoorDash or Grubhub, which charge a fee that cuts into their already razor-thin margins. It’s also stressful for employees, who must balance taking care of in-store customers while filling increasing numbers of to-go orders. And when deliveries go wrong, the restaurants take the blame, whether or not it’s their fault.
"Customers, on the other hand, don’t see it that way. Delivery is convenient. It’s usually pretty fast, and perhaps best of all, they can do it through an app - without ever having to talk to a person."
CNN points out that "delivery rates remain higher now than they were pre-Covid. In 2019, delivery accounted for about 7% of total US restaurant sales, according to Euromonitor International. After a spike in 2020, it settled at nearly 9% in 2021, according to Euromonitor."
The bottom line: "Whether restaurant owners like it or not, delivery is here to stay."
At the same time, Fast Company reports on the systemic technology issues that plague DoorDash, writing that "system crashes can be crippling for DoorDash’s army of delivery drivers - called dashers - whose every move is dictated by algorithms. And they affect customers whose orders are either lost or delivered late and cold.
The story goes on: "Dashers are paid by the delivery, not by the hour. So time lost to outages means money lost. And in addition to dealing with outages, dashers using the company’s Android app have long had to contend with glitches, such as missing delivery information, which further cut into their ability to make deliveries, and get paid.
"DoorDash acknowledges that there have been more issues with its Android app than the iOS version, although the company claims that performance has improved in recent months. The company did not address the issue of systemwide outages, despite multiple requests for comment."
- KC's View:
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In so many ways, these stories make the case for ghost kitchens and maybe even the creation of partnerships between local restaurants to handle local deliveries in a way that brings the service in-house.
Seems to me that it is critical - especially now, at a time when the offering of delivery services seems inescapable - for businesses to figure out ways to reinvent the economics and logistics connected to the segment. During the pandemic, because of the need for speed, companies tried to retrofit these services into existing infrastructure.
Now, I think, it is important to do a little zero-based budgeting, figuring out how one would reinvent the model from scratch. It may require greater investment, but that could be the cost of survival.
