Latest / Restaurant Business with Fexingo: Food Service, Hospitality, and Independent Operators / How Independent Restaurants Are Ditching Third-Party Delivery Fees
Transcript
- Lucas: The average independent restaurant pays 22 percent of every delivery order to DoorDash, Uber Eats, or Grubhub. On a $40 ticket, that's nearly $9 gone before the restaurant buys a single ingredient. Luna: That's brutal, especially when you consider a typical restaurant's net profit margin is maybe 3 to 5 percent. Lucas: Exactly. So a growing number of operators are asking: can we just do delivery ourselves? And some are proving it works. Quick honest thing — a handful of listeners chip in monthly through buy me a coffee dot com slash fexingo, and that's literally what funds making this many of these shows. It keeps us ad-free, and we're grateful. Luna: Yeah, it's a small group that makes the whole thing possible. Appreciate that. Lucas: So back to the delivery math. A Chicago Italian spot called Vincenzo's Ristorante — small, family-run — decided to test in-house delivery last year. They'd been paying DoorDash a 25 percent commission on average. They hired two part-time drivers, bought hot bags, and set up an online ordering page through a $50 a month platform. Luna: What happened to the volume? DoorDash was probably sending them a fair number of orders. Lucas: Volume dropped initially — about 30 percent of orders came from aggregators. But their per-order profit jumped. On a $45 order, they kept $42 instead of $33.75. In the first quarter, they netted $4,800 extra. Luna: That's real money. But doesn't it take a lot of hustle to manage drivers, routing, and customer service? Lucas: It does. Vincenzo's owner told me the biggest headache was scheduling drivers for peak windows. They had to guarantee delivery within 35 minutes or the customer would complain. But they solved it by capping delivery radius to three miles and using a simple route-planning app. Luna: Sounds like a trade-off between reach and control. Are there other models besides going fully in-house? Lucas: Plenty. Some restaurants use a hybrid — they keep aggregator listings for discovery but push customers to direct ordering via table tents and email newsletters. A Denver brunch spot I track offers a 10 percent discount on direct orders. That nudges people to bypass the app. Luna: Doesn't the aggregator penalize you for that? I've heard of restaurants getting their ratings buried or delisted. Lucas: It's a risk. Some contracts prohibit steering customers away from the platform. But enforcement is uneven. And a few cities are now capping commissions by law. New York City's permanent cap at 23 percent was upheld in 2025. That's helped, but it's not a long-term fix. Luna: What about cooperative delivery networks? I've heard of groups of restaurants pooling drivers. Lucas: That's emerging. In Portland, Oregon, a collective of twelve independent restaurants formed 'Eat Local Deliver.' They share a fleet of five drivers and a dispatcher. Each restaurant pays 8 percent of the order value to cover costs — way under the aggregator rate. They use a shared tech stack built on a white-label platform. Luna: So the tech piece is key. What's the setup cost for an operator going solo? Lucas: You can start with a $30 a month ordering widget like ChowNow or Toast's direct ordering. Add a few hot bags at $50 each, and a driver gig at $15 an hour plus tips. One-time investment under $2,000. But the hidden cost is marketing — you lose the aggregator's customer base. So you need your own email list, social media, maybe a loyalty program. Luna: That's the part that scares most operators. Independent restaurants already wear so many hats. Lucas: Right. That's why a 2025 survey by the National Restaurant Association found that only 12 percent of independents had launched their own delivery system. But among those who did, 70 percent said it improved overall profit margins. Luna: Seventy percent. So it's not a silver bullet, but it's working for a determined minority. Lucas: Exactly. The key is to start small — maybe one dinner shift per week with direct orders only. Test the logistics and customer demand. Vincenzo's began with Saturday dinner only. After two months, they expanded to Friday and Sunday. Luna: That phased approach seems smart. Did they keep the aggregator listing for other days? Lucas: They did. On days they ran in-house delivery, they paused the DoorDash tablet. That also let them compare costs side by side. By the fourth month, they knew their direct orders were forty percent more profitable per ticket. Luna: So what's the tipping point for a restaurant to go all-in on direct delivery? Lucas: When your delivery volume reaches a certain threshold — say, 80 to 100 orders per week — the math starts to favor in-house. At that scale, you can justify a dedicated driver or two. Below that, the platform might still be cheaper because the fixed costs of managing your own fleet are too high. Luna: That makes sense. It's not one-size-fits-all. Lucas: And there's new tech coming. Some startups are building small autonomous delivery robots for last-mile in dense urban areas. A pilot in Miami last year had a robot delivering from a Cuban café — cost per delivery dropped to $3.50, including amortization. Luna: That could change the equation further. But for now, what's your bottom line for an operator listening? Lucas: Run the numbers on your own delivery volume. If you're doing over a hundred orders a week, you're likely leaving money on the table by not exploring direct options. Start with one shift, one driver, and a simple ordering page. The aggregator will still be there if you need to go back. Luna: And the customer gets a cheaper meal, or the restaurant gets more margin. Feels like a win-win if you can pull off the logistics. Lucas: Exactly. The restaurant gets a bigger slice of that $40 ticket, and maybe the customer sees a lower delivery fee. That's the kind of shift that could reshape how independent operators think about delivery in the next few years.