Riding the highs and lows of the last two years, restaurants were left to weigh up the pros and cons of both in-house and third-party food delivery. By ignoring the red flags that signalled they needed help with their restaurant food delivery system, many restaurants are now facing a delivery driver shortage.
So, how do these issues around food delivery, whether it be efficiency or staffing shortages, ripple across restaurant operations as a whole?
Domino’s Pizza’s recent struggle with driver shortages has highlighted the wealth of issues impacting restaurants that fail to implement flexible delivery solutions and/or embrace new technologies such as delivery management softwares to streamline operational efficiencies.
In order to avoid a similar fate, and 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 are facing.
Why is a Delivery Driver Shortage Happening?
With changes in consumer ordering habits (back to weekends and late-night), gas price hikes, lack of schedule flexibility, and ride-sharing gig pay staying higher than restaurant delivery, some drivers are opting out of restaurant delivery.
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 be more productive, make more money and tips, and focus solely on deliveries.
Delivery drivers now want what many restaurants are hesitant to give:
- Day/hour flexibility
- Less waiting around
- Better pay
- Perks like gas reimbursement
Fewer delivery drivers want to deal with:
- Increased order demand in hard to reach locations
- Lack of bonuses
- Rigidity around schedules and holidays
If restaurants utilized a delivery management tool, adding third-party delivery driver networks, they could:
- Increase delivery driver numbers
- Provide flexibility to their drivers
- Create better customer experience
Delivery Driver Shortage Implications on Restaurants of All Sizes
For Domino’s, 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 has sliced through the company’s growth opportunities.
About 40% of Domino’s locations are now using call centers (further cutting into profits) to handle orders so employees can make and deliver pizzas. The lack of delivery drivers means 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.
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.
Solving Your Own Potential Delivery Driver Disaster
Remaining flexible is the first step toward thwarting disaster in your own restaurant. Start by looking at a third-party tech solution that zeros in on flexible schedules, hiring delivery-only drivers, stacking orders for bundled locations, and providing driver ETAs (Estimated Time of Arrival) for restaurants and customers.
When you have operational efficiencies through delivery management software, you can check driver locations, list deliveries on a marketplace app, boost revenue, and still retain ownership of your end-to-end customer experience. Plus, using a tool like VROMO, a delivery management software, during peak times means you have backup third-party drivers with low-cost deliveries to maximize orders and profits at scale.
By taking advantage of tech tools like a delivery management software solution, you can stack orders to leverage delivery drivers’ time and gas, delegate to specific driver fleets based on distance and price, and optimize in-house drivers while third-party deliverers handle peak time overflows. Additionally, you minimize overhead/admin costs with the right employees in the restaurant handling orders and prepping plates.
Working alongside a tech platform, such as food delivery software, helps solve delivery driver woes, allows for better driver and customer experiences, and increases profits.
If you’re ready to take a more flexible approach toward your restaurant food delivery operations in order to improve driver delegation and cash flow, book a demo with VROMO today.