Solving the Online Ordering Dilemma

In January the Sydney Morning Herald wrote an explosive article revealing the struggles that Restaurants and Cafes are having with the Online Ordering and Delivery Platforms; 'Frenemies': Restaurants stuck with online delivery giants as business partners.

They wrote,

Restaurant owners are being forced to have a “business partner they never wanted" as online delivery giants such as Uber Eats and Menulog steal customer loyalty and squeeze profit margins.

On February 1st SBS aired a story titled ‘Are food delivery services worth the cost for small businesses? By SBS Finance Editor Ricardo Goncalves.

Both stories listed online aggregators like Menulog, Uber Eats, Foodora and Deliveroo.

Both stories relay two important messages;

1. Online Takeaway Orders are big business, and getting bigger
2. The fees and commissions charged are unsustainable for 90% of Restaurants and Cafes.

On January 30th the Daily Telegraph reported that the Online Aggregators have attracted the ire of the Transport Workers Union and the Australian Workers’ Union, who will push for minimum -hourly wages.

If successful, as was the British court with its decision in November which ruled Uber drivers should be classed as workers with minimum-wage rights and holiday pay, the fees currently charged, which range from a quoted 16% for online ordering to 35% for Online Delivery, will likely go up.

This will further impact upon the profitability and sustainability of 90% of Food Businesses in Australia.

What does this mean for Restaurants?

It is reasonable to assume that the fees will go up in the near future, especially with the quite possible awarding of delivery drivers with the rights of workers entitled to minimum wages.

Fees and commissions that are already too heavy a burden to bare will likely increase.

Takeaway food orders are predicted to hit $4.2 Billion by 2025 – the Era of Convenience is here to stay.

In one of the world’s most competitive industries, Hospitality, it is too big an opportunity to ignore, and restaurants must participate to survive.

But how?

We have Restaurants on one side, and a new and growing market need on the other. It just comes down to the Restaurant and Cafes making the right decisions to access it.

Having spent 25 Years operating and studying profitability in Restaurants I do not believe a business can be profitable long-term under the burden of Aggregators.

I have written extensively about the many grave concerns I have here.

My recommendations to consider when choosing a vehicle to access the burgeoning online ordering market include;

1. Subscription based software that charges a fixed monthly fee
2. No lock in contract or termination clauses
3. No Brandjacking – where aggregators compete with your online marketing spend, for your customers. Read about Niels Mosegaard’s experience with Brandjacking here.
4. White labelled service – the software integrates into your website and socials seamlessly; from the consumer’s perspective it appears to be the Restaurants App
5. Customer database collection – aggregators keep all of the details of the customers that use your services, and they won’t give them to you. They own the customer, not you.

I have developed a Criteria myself for Food Tech, that assists me in choosing what products I am willing to use and/or recommend.

Three Key Elements of this criteria include;

• Specialisation - I prefer the software solution to specialise in the problem they are solving; to be the central product that has been developed, not an add-on
• Industry Experience - I prefer solutions developed by Hospitality Professionals, solving problems that they themselves encountered
• Ethical Software - this is as much a gut feeling, as a hard and fast tangible measure. I prefer to interrogate the developers and have a solid understanding of their philosophy in business. And that it aligns with my own - to empower restaurants to success, not just to profit from them

My choice of Online Ordering Software is takeawaysolutions based in Sydney.