Can DC To-GoGo Compete With Big Delivery Services?
Eight months ago the owners of Ivy and Coney, a DC pub designed to prove that it’s possible to build a local grassroots food delivery platform that can compete with the monster companies that continue to merge and monopolize the national market. DC To-GoGo, from Josh Saltzman, Chris Powers, and Adam Fry, Keeping restaurant fees down, creating better jobs for couriers, and providing a better customer experience is important.
Whether it’s high commission fees that steal revenue from restaurants, poor customer service, a $ 200 million battle against driver reclassification, or adding restaurants to their platforms without permission, at DoorDash, Uber Eats, and Grubhub there is plenty of room for improvement.
The pandemic only exacerbated these problems as restaurants became more dependent than ever on third party delivery services. Washingtoners have been eating most of their meals at home for the past 10 months as the city’s reopening process has advanced in seizures and beginnings based on COVID-19 case rates.
Fry admits they rushed to get the platform to bear. Like most, he couldn’t imagine that the 2021 pandemic would still wreak havoc in DC. “We were trying to move forward pretty quickly to address an imminent problem,” he says. “If we had known it was going to happen in January, almost a year later, I would have wanted more of our ducks in a row.”
DC To-GoGo has been up and running since May, and Fry and his partners now have a better understanding of what it takes to run a delivery platform. You listened to stakeholder feedback and made adjustments in the process. With others potentially trying to start their own delivery services across the country as an alternative to the sometimes predatory key players, City Paper held a debriefing with Fry and Saltzman. How difficult is it to get something going and what pays off?
The technology learning curve
“We were a couple of bar owners with a meat shop back in March,” says Saltzman, referring to Epic Curing. “Now we’re a technology company. We made a lot of mistakes, but we learned a lot. ”
From the start, DC To-GoGo’s founders looked at standard software, but struggled to find an option that was robust enough to meet all of their needs. They decided to use a mix of products to hold onto until they had their own platform built from scratch. It takes a lot of research to wear a web developer’s hat. “We have come to a place where we now have a really good launchpad,” says Saltzman.
But DC To-GoGo may not have all of the knickknack restaurants one expects. “We have companies that see features on Uber and Grubhub that say, ‘Why don’t you have this?'” Saltzman continues. “I think we don’t have $ 1,000. We have $ 1. We’re trying to figure out how to build something new rather than repeating what the big boys do. “
They have integrated functions that reduce friction, such as B. ordering time slots to prevent restaurants from being overwhelmed with orders. “If you have a five-table restaurant, don’t take 10-table reservations at 7:00 pm,” explains Saltzman. “Why should you do the same with your online marketplace? Customers don’t get a good product and you can’t eat fast enough. “Being able to stop commands reduces stress.
“Every restaurateur is different,” continues Saltzman. “Everyone has 50 inquiries. We’ll try to make that happen, but we have 50 others chirping in our ears. We’re trying to create a google group where restaurant owners can talk and share ideas about anything related to their business. ”
Building a workforce
Those who deliver groceries for businesses like DoorDash are part of the gig economy. You are classified as an independent contractor. While they have the freedom to set their own work schedule, they do not have access to unemployment benefits and health and safety such as the guaranteed minimum wage. DC To-GoGo tries a different approach.
“Our model works on transparency and living wages,” says Fry. “All of our couriers work for us and have fixed hours. We try to do it in such a way that the deliverers are not only entered continuously. He hopes his employees will “find growth and career potential” when they look for it.
While DC To-GoGo couriers don’t yet have benefits like health insurance, Fry says they’re paid at least $ 18 an hour. That’s three dollars more than the district’s minimum wage. Being a delivery driver is a difficult and sometimes dangerous task. Long waits in restaurants and late arrivals to dormitories are often beyond the control of drivers, but they can cost money at the end of the day. Constant wages can possibly make up for mishaps.
The drivers they are currently employing are looking forward to more hours, according to Saltzman. DC To-GoGo has slowly and deliberately expanded one quarter at a time, starting with Shaw. “This allows us to control the level of service that we can offer,” says Fry. “If we said we were going to market all over DC, we would be giving up control over the quality of the product. There is too much money behind big players, we can’t win [reach]. Where we can win is service. ”
The team hopes to improve staff hours and hire more Washingtoners as they spread their wings. They just put some Capitol Hill restaurants online this month. “As someone who lives in Trinidad, it’s a personal goal to expand in Districts 7 and 8 to the Anacostia River and beyond,” says Fry.
Change customer behavior
Most DC To-GoGo customers are satisfied, according to the co-founders, but have inquiries that aren’t all that surprising. After they get used to scrolling through a virtual smörgåsbord of options in the large third-party delivery apps, they want to see more restaurants in more represented neighborhoods as well as larger delivery radii. “We can’t afford to hire enough people just yet,” says Fry. “If we had this multi-billion dollar rating that DoorDash received, we’d be sure to cover the whole city next month.”
The integration of new spots does not happen overnight. “It takes time to create menus, train restaurants, set up and hire more drivers,” adds Saltzman. “We’re trying to add as many restaurants as possible, but we don’t want to force them to join.”
Some companies add restaurants without their permission, which can create a great deal of confusion and frustration. They are trying to tie the owners to the extra income and seemingly free marketing. When the companies call to make the partnership official, they commit to paying commission fees.
This is not a game DC To-GoGo wants to play. So, they hope that customers will be patient as they scale and choose them over their competitors because they are earnestly trying to act responsibly and provide a better experience.
“Because of Amazon and Grubhub, people were expecting everything to be at their door in 20 minutes,” says Saltzman. “It’s a lie we sold.” He says he’s tired of delivering apps that tell him his food will be there in 30 minutes, only for it to arrive cold after an hour. Reducing the delivery radius is DC To-GoGo’s strategy to counteract this.
“We received an email complaining from a customer that he couldn’t order from a restaurant a few days ago,” says Saltzman. They were outside of the delivery radius of the restaurant. “You are two miles away and for many restaurants the food is not good. Could we have sent a driver there? Yes. But you would have received pulp that had steamed in a take-out container. We all have to consider what we are trying to do and what the end goal is. You have to support the places around you. ”
So that the low fees work
As a rule, third-party delivery companies charge 30 percent commission fees for their entire range of services. During the pandemic, jurisdictions across the country, including DC, put fee caps in place to keep more cash in the pockets of desperate restaurants. The upper fee limit is 15 percent and remains in place for the duration of the city’s public health emergency. DoorDash, Postmates, and other companies have been fighting these caps at every turn, trying to find ways around them.
DC To-GoGo has three membership levels. The fees are a maximum of 15 percent. The first is for facilities that only want to offer pickup. DC To-GoGo offers an online payment portal and the ability to schedule pickups. 5 percent is required per transaction. The second option allows restaurants to access DC To-GoGo technology but can hire their own drivers. DC To-GoGo needs 10 percent per transaction at this level. A fee of 15 percent is charged for full-service membership, which gives restaurants access to the fleet of DC To-GoGo delivery drivers.
“When the cap goes off, our model stays the same,” says Fry. “We try to approach this symbiotically. If it doesn’t work in restaurants, it won’t work either. ”
But are such low fees compatible with running a sustainable delivery business? The co-founders self-funded DC To-GoGo and received a grant in the form of two grants – one from Shaw Main Streets and one from the Deputy Mayor’s Office for Planning and Economic Development. You’re not making a profit yet. “We’d love it if it were profit-neutral,” says Saltzman. “We’re going there … but if you get into it for the money, you’re crazy.”
The pandemic only accelerated the growing demand for domestic and international supplies. It’s here to stay The question is whether grassroots competitors can crack the code on how to stay in the black. Even the mammoth platforms are losing money. “Everyone should work to keep more money in their local economy,” says Saltzman.