Pros and Cons of Restaurants Using 3rd Party Delivery Apps

Originally published May 13, 2020. Edited October 28, 2020.

Did you know that 26% of U.S. consumers order delivery at least once per week? There are many ways for customers to place their delivery orders now, whether it is over the phone, on a website, using a restaurant’s app, or using 3rd party delivery apps such as Grubhub, DoorDash, UberEats, Postmates, BringMeThat and Seamless. Customers log onto the 3rd party app of their choosing, search nearby restaurants, select food options, and submit payment to the online food delivery company. The food is then delivered directly to the customer by delivery drivers hired by the online food delivery company.

Benefits of Using 3rd Party Delivery Apps

3rd party delivery app providers have partnered with restaurants to provide customers a wide variety of food choices that can be delivered to their doorsteps. Restaurants have begun using 3rd party delivery services for a wide variety of reasons. Some of those reasons include:

  1. Convenience – Restaurants don’t need to hire their own delivery drivers, purchase delivery vehicles, or purchase additional automotive insurance. They also do not need to manage the delivery process as the 3rd party delivery service does this. These savings can be significant.
  2. Reduced cost for restaurants – Restaurants don’t need to develop their own apps or website to reach a large group of people. 
  3. Ability to reach new customers – 3rd party delivery companies have millions of users. Studies show that 63% of young adults use 3rd party delivery services. This allows restaurants to be seen by many people, some of which may not have visited the restaurant previously.

Read, ‘Starting a Restaurant Delivery Service?

Potential Problems with Using 3rd Party Delivery Services

Some restaurants have discontinued using 3rd party delivery apps.  Here’s why:

  1. High costs – 3rd party delivery companies charge an average of 15-30% service fee
  2. Lost income – Besides the service fees charged by the 3rd party delivery companies, restaurants lose out on higher margin items such as soda and alcohol if the food is delivered rather than the customer dining in the restaurant.
  3. Quality of food – Food can become cold and soggy while it is waiting to be picked up by the delivery driver and during transport. There have also been complaints of incorrect orders – where the customer makes a special request, but the request is not relayed to the restaurant. 
  4. Presentation – “You eat with your eyes first” is a well-known expression. The appearance of your food may change from the time the food is cooked and packaged until it is safely in the hands of the customer. For example, food often moves during transport, bouncing around in the back seat or trunk of the vehicle.
  5. Unhappy with the process – Restaurants may try a 3rd party delivery service and come to the conclusion it just isn’t what they expected.  This may lead the restaurant to try a different 3rd party delivery service or discontinue using one altogether.

How to Minimize Risk When Working with a Third Party Delivery Service

Choose Your 3rd Party Delivery Service Wisely

With increasing competition between 3rd party delivery services it’s important to weigh your options and ensure the return on investment is worth it. CNBC reports, ‘The battle for delivery customers could lead to more mergers and acquisitions down the road as companies in the industry seek to cut costs and combine resources.’ So, choose your 3rd party delivery service carefully. In addition, legislation is being introduced in certain parts of the country to further regulate 3rd party delivery services so it’s important to stay well informed.

Get in touch with an agent today to inquire about Society’s big difference coverages or visit our Risk Control Library for additional resources and safety information.

Latest Articles

Resolving Conflict in the Workplace Amicably

On average, 85% of employees will experience conflict in the workplace (Essential Workplace...

The Benefits of Active Listening in the Workplace

When people on a team struggle to listen to each other,...

Can You Use FMLA for Mental Health?

The Family and Medical Leave Act (FMLA) guarantees qualified workers the right to unpaid leave for...

Why Remote Teams Need Inclusive Workplace Practices

For most businesses, remote work is now a way of life in some capacity. Advances in technology and...

How to Motivate Employees as a Manager During Uncertain Times

As a manager in the restaurant industry, it can be challenging to motivate your employees during...

3 Reasons Why Authenticity in the Workplace Matters

Regardless of industry, a business is only as strong as its employees. Even the best products,...

Top Advice For Graduates Trying to Start a Career

As of 2020, there is an average of over 4 million students who have graduated from colleges in the...


Originally published January 29, 2019, updated January 18, 2023. Many parts of the country are no...

A Guide to Safe Keg Handling

At one time or another, almost everyone who works in the restaurant and bar industry has been...

2022 Year in Review

Society Insurance is committed to providing blog posts to help business owners optimize daily...

Stay up to date with industry updates by subscribing to the Society Insurance blog!