Only two companies, DoorDash and UberEats, both based in San Francisco, organize five out of six restaurant meal deliveries in the United States.
More than half of Americans have used meal delivery services, with the typical customer spending more than $200 in the first quarter of 2022, according to Bloomberg Second Measure.
But their fees are now eating up 25 to 40 cents of every dollar we pay for meals delivered, hurting consumers and dramatically reducing restaurant revenue, said Andrew Simmons, head of the Restaurant Marketing and Delivery Association, a national group based in Texas. Its 550 members employ 30,000 local drivers, many of whom also regularly deliver for DoorDash and UberEats.
So this month, Simmons’ association is challenging Silicon Valley’s dominance of the food delivery world, with online systems built by Zuppler, a 10-year-old, 70-person software store based in a former glass factory in Conshohocken.
“Zuppler is building our platform for our new website, LocalDelivery.org,” slated to go live in mid-June, or whenever his group signs up enough restaurants and delivery services to make it viable. , Simmons said. Consumers will use an app to order.
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Local services have cut online ordering and delivery fees in half, he said, making it easier for restaurants to absorb Zuppler’s 50-cent-per-order system fee. The system is also expected to improve service by allowing users to call local people in the event of a problem.
Big food delivery services, which also include Dutch company GrubHub, a successor to Philadelphia-based Aramark’s pioneering seamless delivery system, ‘charge a lot of money, but there’s no local ownership when problems arise,” Simmons said. And until now, local delivery services have lacked the fast software that restaurants and customers have been trained to expect from industry giants in the smartphone age.
And with Zuppler’s new platform, “the money stays in the community.”
“The biggest problem for independents is there’s no way to compete with DoorDash, GrubHub and Uber,” said Chris Heffernan, a former AT&T executive who resigned in 2011 to start DLIVRD, a Horsham-based delivery (and member of the Simmons Association) which is now active in 61 US cities.
“But with this app, which I tested in beta, you can search from any address, it takes you to a list of restaurants in your area, you can order directly from their menus , and we deliver, or other local service , wherever you are,” Heffernan said.
This levels the playing field and eliminates costly marketing subsidies — meal promotions, Super Bowl ads — that Heffernan says have increased costs and fees for national delivery giants.
LocalDelivery.org is a big step for Zuppler, which previously developed its own ordering service for independent restaurants on Zuppler.com.
Zuppler’s modest success in this endeavor – as a private company it does not share its finances, but claims rapid growth – brought it to the attention of the delivery association, which negotiated plans with Zuppler to roll out LocalDelivery.org and announced plans to their group. annual conference in April.
“Major companies like DoorDash have spent billions changing consumer behavior to order online. And restaurants have had to give up much of their business in exchange for moving to where the market is. But restaurants don’t like services to be so expensive,” says Ed Barrett, Zuppler’s chief growth officer and one of the first people hired by founder Shiva Srinivasan.
Barrett said restaurants were at least a decade behind its previous business – the travel industry – in moving online, and were now following a similar path. He worked at Philadelphia-based travel giant Rosenbluth International, and led the team that launched its online corporate travel booking services from 1995 until its 2003 sale to American Express. .
When he left a few years later, a former Rosenbluth boss referred him to Srinivasan, who had moved to Philadelphia to earn a master’s degree in computer science from Drexel University. Srinivasan ran technology groups for the former Synygy and for TV Guide.
Preferring to be his own boss, Srinivasan ditched American corporate life and, along with a few colleagues, created an online portal, APlaceToDine, to book tables at the best restaurants in New Delhi, India.
“We were very successful, in that we had a lot of traffic. The only problem was that we weren’t making any money. The restaurants did not need the service enough to pay a profitable premium. “We were far too early in India. So I went to launch something in the United States”
Back in the Philadelphia area — and married to the woman who beat him to an internship at Drexel — Srinivasan met Barrett on a Ruby Tuesday. The pair projected an easily searchable portal that would direct consumer traffic to dining locations and arrange delivery.
Writing software was not their main expense (Zuppler’s staff includes developers in India and Romania at low cost, as well as Conshohocken). “What’s expensive is customer acquisition,” Barrett said. “People forget that it was a very expensive proposition, getting [corporate employees] stop faxing orders. When DoorDash launched, they flooded the market with millions of postcards to entice online users – $25 off your first order!”
The first portal built by Zuppler’s team attracted a modest and loyal following, Srinivasan said. Ben Franklin Technology Partners, funded by the state, was an early investor.
“Our very first order came from Chiangmai, a Thai restaurant here in Conshohocken. They are still our customers. And then a restaurant owner in Chicago liked our online order and asked if we could put his menu on our site. Our order volume tripled overnight, just in his restaurant. »
The couple had an eye-opener: While tourists can search for restaurants online, most restaurant patrons already had places they liked and, for the most part, don’t experience. “They don’t depend on discounts. If they like Thai and have eaten well in Changmai, they will order online if you make it familiar and convenient. I want to meet the needs of these customers, provide them with a good online experience using our client’s brand. »
So Srinivasan and Barrett took down their original portal and turned Zuppler into a service that, as Srinivasan puts it, provides the technology that powers the “online menus and websites for restaurants they already know and do. trust. We built this from scratch.
The model was analogous to billionaire Montgomery County clothing retailer Michael Rubin’s pioneering company, GSI Commerce, which helped chains compete with Amazon by plugging its own efficient technology into the websites of their familiar customers, Srinivasan agreed.
“We started serving restaurants with good food and bad marketing. People who know what they want and don’t need to pay 30% commission to DoorDash or UberEats,” he added.
Even with LocalDelivery.org, Srinivasan said Zuppler doesn’t expect to bankrupt well-capitalized industry giants. It’s a food delivery business. They do a very good job delivering food,” he said. But with LocalDelivery.org, restaurants don’t end up sharing delivery data with giants like DoorDash who are developing their own meal services and can become competitors to restaurants.
Zuppler set up its own delivery service in the Conshohocken region to get to know the business better, in 2015, with 15 drivers, including Srinivasan. This gave Zuppler insight into creating a better ordering platform for independent restaurants.
The company has also implemented “loyalty programs”, promotions targeting off-peak days or new menu items. They launched the Little Blue Menu online menu for the Chick-fil-A chain, including a quick customer feedback feature.
Like many independent restaurants, this chain is “obsessed with customer feedback,” Srinivasan said. “If they only get a 4.0 out of 5.0, the manager is on the phone to find out why. That’s a high level of attention. That’s the kind of lasting client we want.
The pair are sure there is room for their restaurant-centric online delivery brand. According to Barrett, industry data shows nearly half of U.S. restaurants still don’t have websites, and there are still areas where online ordering hasn’t caught on.
“I worked for AT&T. I know it took 70 years for 90 percent of the population to have a phone,” he said. There are so many opportunities where we go, you can easily order food from your favorite places and pick it up while you play at the casino or when you reach the primate house at the zoo.