Local entrepreneurs are finding success by offering small businesses app-based food delivery services that don't include the financially crippling commissions and fees charged by the big guys.
SkipTheDishes, UberEats and DoorDash are seen as a quick and easy way to fix any food craving. But staying at home and ordering a meal from your couch may be having a negative impact on the local economy.
Small, locally-owned restaurants are feeling the pressure of steep commissions and other fees from these delivery giants.
In Kamloops, two men and a team of drivers are succeeding in creating a profitable business that they say is fair to customers, drivers and restaurant partners. Mitchel Hughes and Sean Martin run Mitchie’s Delivery. The business was started just last year, and the men are now offering an app - putting them side by side with some of the biggest players in the food delivery market.
“We had over 400 registrations in two days. It was pretty good, we actually jumped into the top 50 delivery apps worldwide for a couple of hours and then bounced back,” Martin says. “It was pretty funny to see.”
The app officially launched on Saturday, Feb. 8, and within two days, over 100 orders were placed on it. The men believe their local-centric business model and availability are driving factors behind their success.
“We thought it would a little more difficult to come into his market because SkipTheDishes is pretty ubiquitous, everybody has it. It’s the perception from the community, they embraced us so quickly,” Martin says.
Mitchie’s Delivery brings food to the residents who have normally been excluded from the joys of delivery, connecting people with restaurants as far as 25 kilometres away.
Although they couldn’t share their own business model, the men say they offer a much lower commission to the restaurants compared to other corporate delivery services. Some of these restaurants lose a significant amount of money due to the high commissions mandated by SkipTheDishes and DoorDash, and the partners worry that the method could close down small businesses.
“For a large company that has got, say, 70 cities and thousands of restaurants, if one goes out of business it’s not really a big deal, but for us, that’s somebody in our community,” Martin says. “If somebody goes out of business because we have a business model that doesn’t work for them, then eventually we won’t have a business at all.”
One Kamloops family-owned shop is learning the highs and lows of online ordering. Andreas Mougholias owns The Greek Kouzina and has had to change his perception of the food delivery service. He now works with three services in town, Mitchie’s Delivery included.
“We had actually opened our doors the same month that SkipTheDishes launched in Kamloops, and for the first year we were very much against it because paying an average of 25 percent is a lot of money,” Mougholias says. “As the trend is going, you’re going to see more demand for online food ordering… it’s almost a necessity. You have to do business with the online ordering in order to compete."
Mougholias partnered with Ready at Door, a now-closed delivery service that was created by Thompson Rivers University students. He liked the local focus and lower commission, but when the service was shut down, he knew he had to adjust.
“We realized that this is where the trend is going to go. So when Ready at Door closed, we signed on with Skip and immediately saw an average of 80 or 90 orders a week with SkipThe Dishes,” Mougholias says. “From there we found that it was difficult because we had to pay the hefty commission... In order to be competitive in our market and keep our doors open, we passed some of the cost onto the consumer.”
At the start of the new year, Mougholias added a ten per cent increase to the cost of menu items listed on SkipTheDishes and DoorDash. However, Mougholias didn’t add on that extra cost to his menu items on Mitchie’s Delivery, as he says the company works generously with his family business.
The idea of locally-run delivery service isn’t contained in Kamloops, and the pressure felt by mom and pop restaurants is seen all over the Thompson-Okanagan.
Cheryl Kerik is the founder and CEO of NINJAnow, a food delivery service based in Vernon and Kelowna. NINJAnow branched off of her other business of more than 30 years, DispatchNINJA.
Across the country, Kerik and her team work with small, locally-owned dispatch and delivery services to offer business-boosting technology. She says they branched off into food delivery after helping her current competition get going in the Okanagan.
“Originally we used to work with Just Eat and SkipTheDishes and we helped them build their business… and then they just started buying up anybody,” Kerik says. “Those aggregators are going to shut down most if not all local delivery companies, but now we’re seeing a shift. The locals are starting to understand the mom and pop shops, they understand what’s happening to them.”
NINJAnow charges a flat fee of $3 for each order placed at a partner restaurant. Whether the order is $20 or $200, restaurants know what to expect, and aren’t penalized for any mistakes. Kerik says using local delivery services is not just a kinder alternative, but it will create a stronger economy.
“Local supports local,” Kerik says. “Keeping the money in the community is key. The more restaurants and local delivery work together, the better the chance for success.”
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