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In response to
"Dominos says that delivery apps take money from the bottom line of restaurants. But…?"
by
Mop Unleashed
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Yup. UberEATS, GrubHub, Seamless, Postmates, all of 'em. They charge on both ends of the transaction. It's the only way to overcome the Kozmo Problem. -- (edited)
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If you remember Kozmo from back in the day, the all-around delivery service on those cool orange Vespa scooters. Kozmo lost massive amounts of money because they could never achieve the scale they needed for their business model.
GrubHub and UberEATS were the first to determine the financial solution: surcharges. Put a surcharge on the customer of around 10% to 20% of the order, but as a flat fee (which people are used to), but on the back end, also charge restaurants an additional 30% on the order for the delivery service. And then ramp up consumer demand so much that restaurants simply cannot refuse to participate in the app.
Also, the customer fee is designed to misdirect customers. Most of us will look at the at the fee and assume those must be the only extraneous charges. And most people are surprised at the backend charges imposed on the restaurants themselves.
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