In the spirit of the season, I want to give. Having made a decent living the last couple of years doing delivery work, I’m offering a free gift to my customers.
As an independent contractor in the on demand food delivery space, my customers are Grubhub, Doordash, Uber Eats and Postmates. Guys, I want to thank you for your business and as a thank you gift I want to give you something really special. It’s something I KNOW is at the top of your wish list. But I’m not sure you’re ready for it, I’m not sure you’ll take it, but I’ll offer it to you.
When you refuse to actually be a delivery company, you begin to really suck as a delivery company.
ON DEMAND DELIVERY DOMINATION!!!!
Okay, we all know I can’t snap my fingers and just say poof, you’re number one. I mean seriously, I’m a guy who runs a tiny website and delivers food to people for a living. It comes as no surprise that I don’t have that kind of power.
What I can give you is how to get it. So sit back, be blessed, and don’t wait too long to accept it. You can all have it but I’m sure most of you won’t or can’t actually do anything with it. I’ll be frank here (although my name is really Ron)… I’m pretty sure none of you will take it. Which is too bad. Maybe someone out there WILL take it and end up burying you all. I’m okay with that.
The funny thing is, if you take this gift, you’ll cease to be my customer. And it’s not about me wanting to fire my customers by any means. It’s just the nature of the gift. I’ll explain in a moment.
Here’s My Gift: The Secret to Dominating as a Delivery Company!
If you want to really take over, to really be the king of the on demand delivery space, it’s really simple. Are you ready?
The secret to dominating as a Delivery company is…
are you ready? Because this is really important. But it’s kind of simple so you want to make sure you’re ready. You don’t want to miss this.
… to actually BE a Delivery Company.
In other words, quit playing games.
Quit doing this “we are a technology company, not a delivery company” dance. Quit trying to pretend to be something you aren’t so you can get away with something else that really shouldn’t be that important to get away with.
Here’s the deal guys: You KNOW you are delivery companies. The people who order from you see you as delivery companies. The restaurants you deliver for see you as delivery companies. The people who you assign deliveries to and complete the deliveries for you see you as delivery companies. You coordinate and facilitate the deliveries, you pay the contractors (you don’t even pass the payment on from the customer), you charge the restaurants and the end users for delivery companies.
It looks like a duck, it quacks like a duck, it walks like a duck.
So why do you insist you aren’t delivery companies?
Okay guys, let’s be honest. Matt, Tony, Dara, Bastian, it’s a pretty safe bet you’re not reading this. Probably none of your people are. You’re too busy running your delivery, ummm, tech companies. Because we both know you know the reason you’re doing this charade. So this is more for the people who actually are reading this.
It’s all about avoiding using employees. It’s about doing things on the cheap.
AB5 and the delivery companies who identify as tech companies
Here’s the bottom line: It costs a LOT more money than just wages to hire employees. There are taxes to pay. There are benefits. There’s HR and supervision. You have insurance, all kinds of insurance. And then you have to reimburse people for driving around. If you have to pay all that money, there’s less left over for investors and for Matt, Tony, Dara and Bastian.
So that’s great, right? Save money by hiring contractors. Except that employment law doesn’t make it that simple. There are laws against that. The laws haven’t been as well defined in the past about when you can use contractors, so you’ve been able to skate, so far. But now states like California and New Jersey are clamping down and trying to better define things.
And one of the things it boils down to is, you can not use contractors to do the principle work of your company. In other words, a delivery company has to use employees to do their deliveries, not contractors. So, you just say you’re not a delivery company.
If you look like a delivery company and quack like a delivery company….
But you all have a huge problem with this model:
When you refuse to actually be a delivery company, you begin to really suck as a delivery company.
zero to sixty, sometimes.“My Chevette” by Audio Adrenelaine
See, this is the problem folks: You cannot be excellent at something if you’re not committed to it in the first place.
And let’s face it. You suck at this. All four of you.
Let me put it this way. You’re like this line in one of my favorite songs: “My Chevette” by Audio Adrenelaine. “Forty miles to the gallon, zero to sixty sometimes.”
And that’s what you guys are. Quick, cheap delivery. Sometimes.
There’s no quality control. There’s no quality. You do not truly fulfill. You deliver a lot but in no other industry could you be as bad as you are as often as you are and even begin to survive. And you will always suck as long as you refuse to go all in on being a delivery, when you refuse to realize your emphasis should be build around doing the thing you promise to do: Delivering your food.
Right now, you cannot guarantee a delivery.
You can’t order a contractor to accept a delivery. You can’t force a contractor to take any deliveries. And you cannot require anyone to work at certain busy times. All you can do is offer enough incentives and pay enough to get enough drivers out to accept enough deliveries. Your problem is that there are too many deliveries that never get accepted. There are too many times where customers don’t get their food. Too often a restaurant will prepare an order only to throw it away when it isn’t picked up.
And you can’t do anything about it because you cannot control things like staffing and acceptance.
Right now, you cannot control quality.
You have a big problem. It’s way too easy to sign up and do delivery for you. That means you get people delivering for you, representing you, that you really don’t want representing you. And when someone does a horrible job, when they are rude to restaurants or customers, there’s not much you can do. Your hands are tied.
Because when you take punitive action for how people do things? That crosses the line into employment. You get sued. You either lose or you pay a lot defending it.
So how do you control the quality in that envrionment? You can’t control when your people work or how they work or any of that. You can’t make sure all the orders are picked up. When there are tons of lawyers chomping at the bit at getting 40% of any settlement in a misclassification lawsuit, you’re forced to let a lot of things slide. If you can’t control the interaction or appearance of the people doing the work, how can you make sure you accomplish what you promised to the restaurants and the end users?
The first one of you to accept my gift could blow the others out of the water.
Tony and Bastian, I know you guys are hoping like heck you can get to an IPO. That’s when you’ll get your money. If you don’t lose investment money to keep you afloat before that happens. Because you can’t stay afloat for long this way. Matt, Dara, you guys are probably a bit more scared – your companies are already public and stock holders are getting pissed. When do they cut bait and leave you hanging?
I don’t know that you can keep afloat for more than a couple years. Any of you.
Right now it’s a battle of attrition.
You guys are losing customers out the back door faster so fast that you are having trouble bringing new customers in. There’s a couple of you that are fantastic at marketing… but you have to be because you can’t survive on your existing customer base. Restaurants are bailing on you. End users are bailing on you. Drivers are frustrated and they’re bailing.
That’s that quality control thing. People are getting tired of all of you sucking so bad that they’re moving on to someone else.
You are playing a game where it’s more about replacing than it is about growing.
It is so bad that if one company could be excellent at delivering on their promise, they could dominate
If one company could get orders picked up from the restaurant consistently, if they could consistently provide a positive experience for the end user, if they could make sure the food arrived on time, they would have a leg up.
Because now THEY are retaining their customers. Now they are building loyalty with their diners and with restaurants. People will gravitate to that company because they know they will come through in what they promise.
Go. All. In.
Someone is going to do it. Whoever does, they will win. If it’s not you, you’ll be crushed. Go all in. Quit playing games. Quit monkeying around with “I’m a technology company.” Don’t even worry about being a tech company. Be awesome at delivery. Be who you make yourself out to be: a logistics company!
If you’re focus is keeping up the charade of being a tech company, you can’t be good at something else. If you’re one type of company that happens to try to do something else, you can never be great at either one.
Just ask any of us who deliver for Doordash just how good their tech is. Especially on Fridays for whatever reason. And the thing is, if you make too big a noise about really being a tech company, why are restaurants and customers going to go all in with you. They want delivery. Know who can be awesome at that? A delivery company.
So go all in. Quit straddling the fence. The first one to really embrace being a delivery company will crush the rest of you.
That’s going to mean hiring employees.
Here’s the thing about being excellent in delivery. You have to deliver. You have to get it done.
That means you have to have control over the process. You have to be able to tell someone, pick this up here. You have to be able to tell someone they have to be clean, they have to look a certain way, they have to act a certain way. If you want to guarantee things will be done and really come through, you have to have more control over how things are done than what is even remotely possible when using contractors.
That can only happen with employees.
I said I’d lose you as a customer. This is why. I won’t be able to contract with you, and to be honest I don’t want to be employed by you. Kind of a dumb move on my part, isn’t it? But you know, I’m losing you as a customer eventually because you’re going under.
And yes, you can afford to hire employees.
I think you’re in the mindset that you can’t afford to hire people to deliver. And I don’t get that, you guys can really think out of the box but you’re so stuck in a box on this one, you know?
Yeah, you’d go under in a heartbeat if you paid employees to do things how you do them. But this is the thing, you don’t have to do things like you are currently. But come on Matt. Think this through, Tony. Dara, Bastian, you are smarter than this. One of you will figure out eventually that when your focus is on actually delivering, you can do things differently.
You can now be efficient.
You don’t have to worry about someone rejecting orders. Now you can map out deliveries in an efficient manner. There are a ton of ways you can do more than one on one deliveries. Now that you focus on logistics and fulfillment, you can deliver more with fewer people.
Hub and spoke approach
Here’s a bonus gift.
Think about this: Develop a hub and spoke model of delivery. You have your people now stopping in a restaurant and picking up EVERY order that’s ready to go. They bring those orders to a hub. From that hub, one courier can pick up multiple orders that are all going to the same apartment complex or to similar addresses.
And you can set up several hubs in a region. Longer distance deliveries get transported to a hub that is closer to the customer. You can do this all with vehicles that are equipped to better keep the hot food hot and cold stuff cold. And now you are getting a LOT higher percentage of your orders fulfilled, much more efficiently, and it takes a lot fewer people to accomplish this.
Does this sound familiar? It’s something kind of like companies like Fed Ex and UPS.
You know, delivery companies.
This requires some pretty sophisticated technology.
Okay, Tony, we gotta talk about this. Your company, Doordash? Man, I have to say you might be at a disadvantage here. You have to have tech that works. DoorCrash Fridays aren’t going to cut it here.
But here’s the thing – when you are a company dedicated to a particular outcome that USES technology, that always works better than just being a tech company.
Use scanner technology. The restaurant packages the food and prints out a barcode. Couriers scan the food when they pick up, and scan it in at the hub. When you scan the items in at the hub, you immediately know where to put it because your computer has already figured out the route. You put this food here and that food there, all ready to be transferred to another hub or to the courier who is taking the food to the customer, and that courier knows exactly where everything is that they need. They scan again, and that makes sure nothing is forgotten. When the courier arrives at the customer, they scan again and you’re done.
You provide the vehicles.
This serves three purposes:
- You avoid reimbursement costs. That’s part of the problem with an employee model – states require you to fully reimburse expenses and you have to haggle over whether it’s 40 cents a mile or 58 cents or worry if the courier is padding their numbers. Screw all that, just provide the vehicle.
- You have better quality control. You can provide a vehicle that is specially equipped to take care of the food. Hot trays where appropriate and refrigeration for cold items, and it’s all set up to easily get the food in and out.
- You have branding. Wrap that stupid thing. Your logo all over your vehicle is a billboard on wheels. Which is more impressive? A tricked out wrapped and branded delivery vehicle, or Joe Schmoe pulling up in his rusted out crapped out 98 Buick?
Savings in other areas offset employment costs
I have to think an HR department has to be cheaper than a legal department. You’re spending less time and money trying to fight off things like AB5. You’re not worried about misclassification lawsuits.
But there’s other things. You’re not giving out as many refunds and credits because of the horrible job done by contractors. You have better control over the process. You have better retention because you actually come through. The food arrives on time and in much better condition.
And you begin to dominate
Customers and restaurants are no longer going out the back door. In fact, when you become awesome at what you promised to do, you have more of your customers actually marketing for you.
You know you’re having trouble keeping customers, and you know why. Guys, the only thing keeping you in business right now is everyone else is as crappy as you are because they are using the same model as you are.
But when you set yourself apart, when you actually start DELIVERING and doing it with excellence, none of the others can keep up with you.
And the thing is, right now you’re all commodities. You all do the same thing, you all perform roughly the same, people hate you but love the idea of delivery… and so the only thing you can do to differentiate is how much you advertise and how little you spend.
But when you deliver, when you are so much better than anyone else at what you are promising, when you fulfill what the customer wants in a way that no one comes close?
Now you get to set your price. You control the industry. Now, you dominate.