Find out how the delivery driver shortage is affecting restaurant delivery operations and why drivers don’t want to work for you!
Riding the highs and lows of the last couple of years, restaurants were left to weigh up the pros and cons of both in-house and third-party food delivery.
By choosing to ignore the red flags that signaled they needed help with their restaurant delivery service, many restaurants are now having to deal with a shortage of valid drivers.
So, how do these issues around food delivery jobs, whether it be efficiency or staffing shortages, ripple across restaurant operations as a whole?
Domino’s Pizza’s recent struggle with the shortage of food delivery drivers has highlighted the wealth of issues impacting restaurants that fail to implement flexible delivery solutions and/or embrace new technologies (such as delivery management software) to streamline operational efficiencies.
In order to avoid a similar fate for your restaurant, and to move forward with long-term delivery management solutions, here are a few considerations regarding the pressing delivery problem even the Dominos Pizza of the restaurant world is facing.
With changes in consumer ordering habits (back to weekends and late nights), gas price hikes, lack of schedule flexibility, and ride-sharing gig pay staying higher than restaurant delivery, some drivers are opting out of the food delivery service industry.
Not only do drivers want to avoid working in-store, but demand for drivers provides options to work with tech-enabled companies that help them become a more successful delivery service provider by being more productive, making extra cash, getting more job experience, and focusing solely on deliveries.
Delivery people now want what many restaurants are hesitant to give:
Fewer delivery drivers want to deal with:
If restaurants utilized a delivery management tool, adding gig economy or third-party delivery driver networks to their ecosystem they could:
With careful consideration of these evolving industry dynamics, restaurants can implement strategic solutions to mitigate the challenges posed by the ongoing shortage of delivery drivers.
For Domino’s Pizza, its driver shortage forced them to reduce their store hours, leading to a profit dive where same-store sales fell by 2.9% after lockdown times, and current sales are down 27% year-to-date.
Phones are ringing, but aren’t being answered, meaning fewer orders, and restrictions in online orders due to changed operating times have sliced through the company’s growth opportunities.
Not to mention the big hit to their customer satisfaction scores and customer tips.
About 40% of Domino’s locations are now using call centers (further cutting into profits) to handle orders so in-house employees can essentially make and deliver pizzas themselves (for their normal hourly wage!).
The lack of delivery drivers means last-mile delivery problems are through the roof.
Customers see long wait times, online order system rejections, and a push toward less-ideal carry-out orders. Plus, Domino’s hit its profit margins further by offering LTOs (Limited Time Offers) on those carry-outs to deal with the shortage of delivery service drivers.
Even though Domino’s has 18,800 stores in 90 different markets, the company was forced to raise pizza prices for patrons while seeing its Earnings Per Share (EPS) fall to $2.82 from the estimated $2.91.
For restaurants of any size, these are serious cuts into operational efficiencies as well as profit margins.
Remaining flexible is the first step toward thwarting disaster in your own restaurant, whether it be a large chain or an independent restaurant.
Start by looking at a third-party tech solution that zeros in on flexible schedules, hiring food delivery-only drivers, stacking orders for bundled locations, and providing optimized delivery routes & driver ETAs (Estimated Time of Arrival) for restaurants and customers.
When you have your operational efficiencies in check with a delivery-focused software solution, you can check driver locations, list deliveries on marketplace apps, boost revenue, and still retain ownership of your end-to-end customer experience.
Plus, using a delivery management solution during peak delivery times means you have backup third-party drivers (at a lower cost) to maximize order fulfillment rate and profits.
Additionally, you minimize overhead/admin costs with the right employees in the restaurant handling orders and prepping plates.
If you’re ready to take the next step in your restaurant delivery journey, talk to our team of delivery experts today!
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