November 26, 2019 alirezan

Growing Pains with Food Aggregators: What’s The Solution?

Online food delivery service melbourne is one of the most talked-about growth industries of the current age, having birthed multiple unicorns and even decacorns (exactly what it sounds like) across Silicon Valley and the Asia Pacific region alike. Having forged relationships with courier drivers everywhere from Brisbane to Melbourne and supplying courier driver jobs from Melbourne to Adelaide, we’ve been right on the cusp of this rapidly rising new industry.

Part of what makes online food delivery so exciting to entrepreneurs and venture capitalists alike isn’t just the numbers, though they are impressive.

"Frost & Sullivan estimates that taking into account the industry’s 14% growth rate, online food delivery currently sits around $82 billion in gross revenue ($2.4 billion in Australia alone) and will rise to double that figure by 2025."

Recent reports also show that even the baby boomers are on-board with more off-premise dining. The National Restaurant Association shows that 51% of baby boomers want to order food delivery more often than they do now.

However, what’s really getting investors and pundits riled is the fact that food delivery dovetails so well with some of the other big tech trends set to define the 21st century: automation, driverless automotive tech, personalisation at scale, and the gig economy.

However, the industry has recently been running into some trouble, dovetailing instead with aggregators increasingly dictating the terms of business in the hospitality industry. Five years ago, there were only a handful of online food aggregators. Today, the industry is a behemoth that sends 80 million orders each month. Ordering food online is convenient, and restaurants can gain from the extra visibility. But who is raking in the profits? Five years into the food delivery boom, many restaurants have now come to the conclusion that they are losing more than they gain. The biggest irritant is the steep discounting game which has started to hurt margins.

There’s a lot of confusion in the food delivery market, with a lot of people and businesses burnt by the big aggregators in the food delivery space. These players are charging restaurants upwards of 30 percent of each order in fees. While hospitality can be a balancing act, gripped by FOMO (fear of missing out), the next step to meet customer expectations and drive business will be the integration of last mile delivery. But how can restaurants dodge the often-unreasonable requirements of the big aggregators?

We at Drive Yello are proud to be at the forefront of giving vendors a platform to integrate the next wave of service at a custom and manageable scale. Creating space for giving restaurants back their profit margins. Our platform gives businesses the freedom to choose one or more Drive Yello products to deliver on their last mile goals.

Restaurants providing, or planning on providing, a last mile delivery service have found that delivery profit can be elusive when finding a business to partner with. The hurdles faced are most prevalent when a third-party becomes the order management system too. No such thing with Yello. Your customers are yours. By keeping the order-processing in house and having flexible delivery solutions, eateries are able to develop a direct delivery experience for their customers.

"“The [hybrid model] has economic benefits. It helps you leverage your existing infrastructure with your online ordering.”"

Scott Gladstone, VP of Strategy and Development, Applebee's

At Drive Yello, we like to think we do things a bit differently from other providers. One of the reasons our courier community enjoy being an independent contractor on the Yello platform and utilising our platform is because we make as big of a commitment to the courier as we do to the businesses who use our services. We offer real flexibility with a selection of on-demand, shift, and scheduled deliveries; which gives the courier the ability to deliver for a range of different retailers with hassle-free contracting. No one’s pocketing the money the courier has earned, all of the invoicing and payment is automatic and above board.

Moving beyond the invisible boundaries that couriers face, Drive Yello is also at the forefront of other delivery industries. Couriers may have thought they were stuck at a dead end in the food industry. The breadth of industry covered by the Yello platform partnerships gives drivers new opportunities. Moving into retail, where the consumer pays for the deliveries, couriers can move forward into other industries too.

Drive Yello is outshining the competition and ensuring fairness is met in all industries. Restaurants and eateries are a great example of how we can get the last mile delivery solutions right for everyone.


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