[Updated, March 1st, 2020] The food delivery trend has exploded over the last several years and it shows no signs of slowing down. Although there are always food delivery risks to consider, foodservice takeout and delivery may prove to have tremendous potential to maintain and grow profits when foot traffic is low. Even restaurants who never thought that they would be doing delivery have had to at least consider adding this service now more than ever.
But getting started with food delivery for your restaurant isn’t just as simple as taking orders and driving them to people’s houses. Many of the choices you need to make come with risks that need to be mitigated. How you address these risks can make a huge difference on how profitable your takeout and delivery services will be. So let’s jump right into it and explore the biggest food delivery risks.
1. Customer Privacy & Data
Back in the not-so-olden days, customers simply called up your restaurant to order. Their order was then delivered by a driver employed by the restaurant. Maybe they provided a credit card over the phone. Maybe they paid in cash at the door. But times have changed. Now customers order on their cellphones and through food delivery apps like Uber Eats and DoorDash. Sensitive data, including credit card numbers, is transmitted and frequently stored, often across multiple networks and systems.
Hardly a day passes when we don’t read about another data breach or other hacking incident. And in the restaurant industry, too often we see what we like to call “nephew-built” websites (i.e. “My nephew can build your website over the weekend real cheap!“) especially for smaller restaurants. Computer and internet security can be challenging even for experienced businesses. If your website gets hacked and exposes customer data, customers could lose trust in your brand for a time.
Bring on the Lawsuits
And it is only going to get more challenging for business owners. California lawmakers recently passed the California Consumer Privacy Act (or CCPA for short). This new law covers restaurants and the data they potentially collect from their customers. Failure to comply with the law’s standards can open up a business to hefty fines and potential lawsuits.
Many experts recommend cyber-security insurance as a protection against unforeseen events. However, this type of insurance can be costly for many small business owners.
The risks involved with a “do-it-yourself” website that manages delivery orders and takes payments have pushed many smaller restaurants to partner with delivery services such as Uber Eats, Amazon Restaurants, Postmates and others. But just because a third party handles much or the heavy lifting, the restaurant owner can still be liable if they do not maintain good practices around handling of customer data.
The bottom line is, don’t become complacent with your customer’s sensitive data. Ask questions to be sure the gatekeepers of your customer’s data are taking every precaution to keep it safe. Even if you are just touching base with them every month to ask how things are going.
2. Food Safety
|Having the right equipment is a must for food safety & delivery.|
Food safety should be a concern for every restaurant, whether they deliver or not. But it becomes especially important for delivery because of the additional risks. First and foremost, restaurants should be concerned about maintaining the correct hot and cold holding temperatures of the food they are delivering. How long has that potato salad sat out? How long will it sit in a hot car?
Even if you are using a third party delivery service, you need to be aware of how your delivery orders will be held in your store until they are picked up by a driver. Do you have the right equipment like a hot food holding cabinet?
Depending on the types of food you are delivering, you can’t simply leave the orders on the counter and expect that everything will be fine.
And then there is the delivery process itself. How is your food being transported? Is it just sitting on the passenger seat of your delivery person’s car? Or do you have the appropriate delivery bags or boxes for your drivers? If you use a third party delivery service, what types of delivery accessories do they require their drivers to have?
These are important questions and considerations. Just as we see news of data breaches, we have seen a rise in foodborne illnesses that stem from restaurants (think: Chipotle). You definitely don’t want to be the source of one of these events. A little care ahead of time can save a whole lot of headaches (and tummy aches) later.
This could easily fall under the “Food Safety” heading as well, but it comes with some unique challenges that make it worthy of its own section.
How many of you can order takeout from your favorite fast food restaurant and NOT sneak a french fry or two on the way home in the car? The smell is hard to resist. I’m ask guilty as anyone in this regard. And delivery drivers are not immune to the lure of delicious bites.
And how would you know if your delivery driver snagged a few fries or had a sip of your drink on the way to your house? The answer is: you probably wouldn’t. And that’s where the problem lies.
As delivery has exploded, there have been many innovations into what is called “tamper evident packaging.” This doesn’t mean “tamper proof.” The idea isn’t to make delivery containers into little puzzle boxes or portable safes. It is just another layer of protection for the business and the customer. Take out bags can be sealed with an adhesive that will tear the bag if removed. Carryout containers can have plastic seals that have to be broken to remove the food and cannot be replaced or resealed once broken.
The idea is simply to inform the customer that their order was tampered with before it arrived at their door. This can be as simple as stapling a bag shut. The foodservice disposables industry is rapidly innovating products to address these concerns. If your business does a lot of delivery, it may be worth your time to explore these options.
4. Food Quality
Your food is your product as a restaurant. And your reputation is built on how good your product is. The question becomes how well does your product travel? Lots of foods are meant to be served immediately upon being cooked. How does your food fare when it’s been cooked, sits on the counter or in a holder awaiting the delivery driver and then sitting in the car in a delivery bag or box (or not)? Are the crispy things still crispy? Are the vegetables wilted? Do you have hot and cold ingredients side by side in the same container?
In a recent study, Off-Premise Insights looked at customer feelings about takeout, delivery and catering. They found that food quality was the most important driver of satisfaction with food delivery.
Food quality may be one of the most challenging problems for the industry to solve. There are so many factors to consider, many of which are beyond the control of the restaurant operator. Even with that in mind, the same study tells us:
“But who gets the blame if there is a problem with the food delivery? According to the study, 82% of consumers will blame the restaurant, not the delivery service.”
So it is your restaurant’s reputation on the line, even if it’s not strictly your fault. This can lead to bad reviews and poor customer retention. And bad reviews can lead to decreased new customer acquisition. It becomes a vicious cycle.
Solutions are being developed
The good news is that the industry is actively attacking these problems from a number of angles. For example, Lamb Weston, a supplier of frozen potato products to the restaurant industry is taking aim at soggy delivery french fries. Their approach is twofold: the product itself and the delivery container.
Lamb Weston has created a french fry specifically designed for delivery. The company claims that its even-batter coated fries offer extended holding times while retaining crispness.
They also realize that the main enemy of crispness is moisture that accumulates inside a closed container. To prevent this, they offer their own vented fry container to prevent the moisture build up that can make fries soggy.
Other disposables manufacturers are jumping on this trend as they engineer new solutions to address the challenges of delivery.
As a restaurant owner, you may have to make adjustments to your menu or food preparation to account for delivery as well as looking at newer, innovative containers specifically designed for delivery.
5. Delivery Driver Issues
This section could be an entire article by itself. But we will try to break it down for you. The last mile of your delivery service is in the hands of the person who drives the food to your customer. And a lot can happen between your restaurant and the customer’s location.
Automobiles Come with Risks
According to the Bureau of Labor Statistics, transportation incidents are the cause for the vast majority of on the job fatalities. Since, by definition, delivery drivers spend much of their time behind the wheel, the risk is especially salient for this job category.
But it’s not just the driver who may be at risk here. If you have a delivery driver using their own vehicle and they injure another driver or damage property, your business may be liable. And the settlement for that liability can be substantial.
At the very least, it is imperative that you speak with a professional about your insurance needs. Your insurance requirements will vary based on the state in which you are doing business as well as the specifics of that business itself. In this case, an ounce of prevention is worth way more than the pound of cure.
Unfortunately, being a delivery driver is a risky occupation. In fact, delivering pizza is one of the most dangerous jobs in the United States. It’s an unfortunate fact of life that delivery drivers make attractive targets for thieves. Delivery drivers are believed to carry decent amounts of cash and are most often on their own, making them easy targets.
In London, mopeds and scooters have become popular vehicles for food delivery. The small form factor and ease of navigation make them ideal for negotiating the increasingly traffic-clogged streets of one of the world’s busiest cities. But thieves have begun targeting these delivery people specifically for their transportation. According to a BBC investigation, delivery drivers are being robbed of their mopeds and scooters by thieves who then use those vehicles to commit other crimes. The thieves then dump the stolen bikes, essentially treating them as disposable getaway vehicles.
There are some ways to mitigate crime targeted at delivery drivers. For example, your business may need to make a policy that drivers must make frequent deposits to limit the amount of cash they carry. Similarly, you may need to limit the number of deliveries done in a single run, again to keep the amount of cash on hand to a minimum.
As online delivery services move away from cash on delivery payment methods, we may see some relief in targeting delivery drivers. But tips are still often given in cash and the drivers are such an attractive target for thieves that this will still be a concern worth noting for the foreseeable future.
In addition to crime, delivery drivers face the risk of injury. In the winter, they face slippery sidewalks. They traverse poorly lit streets and driveways. Slip and fall accidents are all too common. And again, your business may be liable for some or all of the damages.
Unfortunately, there isn’t a whole lot that can be done to mitigate these risks. Having the appropriate insurance is a good first step. But you should also look into training your drivers to be aware of the risks as well.
Wage & Labor Issues
You may be tempted to treat delivery drivers as contract employees as it does have the potential to save substantial money for the employer. After all, you’ve heard about the “gig economy” and that all seems to be a hit with the kids, right? Not so fast.
Classifying delivery drivers as independent contractors to save money could expose you to significant wage and hour liability risks. Recent reports show that these types of lawsuits are on the rise as well.
Again, consultation with a lawyer and/or insurance professional can go a long way to reducing your exposure to these thorny issues.
Delivering the Bottom Line on Food Delivery Risks
Food delivery is not going away. And most indications show that it is only going to grow as an important segment of the restaurant industry. That is why it is so important for restaurant business owners to fully understand the risks involved with food delivery. Only by understanding the food delivery risks can you take proactive steps to avoid problems down the road.