Pizza delivery is something that most customers have come to expect from their favorite pizzeria. It could be said that pizza delivery is as American as Apple Pie and Baseball. Most pizzerias offer delivery as a convenience to their customers, but are they doing it the right way? Should you have your drivers use their personal vehicles, buy your own company vehicles, use a third party delivery service, or all of the above?
Delivering a pizza may seem like a simple task, but the reality is that it is expensive and risky. Do you know how much a delivery costs to make? Is it a dollar, three, or even more? Are you losing money on each delivery? What about all these third-party delivery services out there? They seem to promise the world – no risk, no investment, no driver management, etc. Is it worth it?
On top of the cost is the risk – each time a delivery driver walks out the door there is the danger of a wreck, robbery, injury, property damage, and even death. With all of these things ultimately being your responsibility as the business owner, minimizing and managing your risk is a critical step in properly operating your business.
Before you make a decision take a moment to run the numbers. Numbers are the business owners best friend. We have built a free tool for you to use in analyzing the financial impact of delivery to your bottom line. It allows you to plug in your delivery numbers or projections to compare the cost of each delivery option. There isn’t a best one size fits all answer for every pizzeria, you need to make that call on your own – but do so armed with facts and numbers. See our free download at the bottom of the page.
Let’s take a quick look at each one of the delivery options below.
Non-Owned Autos
Pros
- Complete control of service and quality.
- Brand recognition and marketing.
- Limited investment to gets started.
Cons
- Hired Non-Owned Auto insurance can be expensive with high deductibles.
- Drivers may not have proper insurance.
- Driver’s cars may not represent your brand well.
- Driver’s may have unsafe cars.
- Driver’s cars may leak oil on customer’s property.
- You are 100% responsible for your driver’s actions and the damage they cause.
- Proper mileage reimbursement is critical to avoid violating labor laws.
Startup Requirements
- Delivery bags
- Hired Non-Owned Auto insurance
- Uniforms for drivers
- Coats/Hats for drivers
- POS with delivery capabilities
- Maps
Company Owned Vehicles
Pros
- Complete control of service and quality.
- Maximum brand recognition and marketing.
- Complete control over the safety and quality of workplace tools.
- Driver’s can’t call off because their car is broke down.
- No mileage reimbursement to pay out.
- Maximum insurance coverage.
Cons
- Fleet insurance can be difficult to obtain.
- The cost to purchase or lease vehicles can be a barrier.
- Driver’s don’t treat vehicles with came care as their own.
- Responsible for all repairs and maintenance.
- Vehicle breakdowns can hamper operations.
- Highly visible / target for robbery.
- Can’t quickly scale delivery operations upward.
- You are 100% responsible for your driver’s actions and the damage they cause.
- Insurance required safe driving history of drivers is usually stricter than Hired Non-Owned coverage.
Startup Requirements
- Delivery bags
- Delivery vehicles
- Parking space to accommodate all vehicles
- Local mechanic relationship
- Fleet insurance
- Uniforms for drivers
- Coats/Hats for drivers
- POS with delivery capabilities
- Maps
Third Party Delivery Service
Pros
- Virtually no investment to get started.
- No drivers/additional employees to manage.
- No employee expenses/taxes/workers compensation.
- No vehicle insurance needed.
- No training of drivers.
- Less risk exposure
Cons
- Usually very, very expensive.
- Third party employees have no loyalty to you or your company.
- Very little control over service or quality.
- Hard to quit or change services once your customers are accustom to using the third party website.
- Customers still connect the third party service to your company.
- Customer will often want you to stand behind any bad service from the third party and won’t understand why you won’t.
- Chances are you will still be named in any lawsuits.
- Driver’s and their cars may not represent your brand well.
Startup Requirements
- Setup fees from third party companies
