The story was first published in September.
Relay, a go-to food delivery service for hundreds of independent restaurants in New York City, has been in the city for nearly a decade.
The CEO of Relay said that most restaurants don't want to pay up to 30% in fees to use their services. Relay charges restaurants an average of $6 for their orders. Customers can save money by paying that fee.
Relay is trying to save mom-and-pop restaurants money through a secret strategy that involves using delivery apps such as DoorDash. Jimmy John's or a pizza shop with an in-house delivery fleet may be able to fulfill their own orders with self- delivery.
Relay wants restaurants on its platform to use self- delivery services. The strategy allows restaurants to be both good and bad. Delivery marketplaces can increase sales for restaurants. The industry leader is DoorDash, they serve 300 million households. The restaurants don't have to pay a higher delivery fee.
"I think it's a secret," he said. We have saved that merchant thousands of dollars, on average, $40,000 a year per location.
Andrew Simmons said Relay wasn't the only one using the strategy. The tactic is being used by other delivery companies to save restaurants money.
Simmons said that the DoorDash self- delivery is a hack.
Relay was founded in New York City by a former tech recruiter.
The company's algorithm is similar to a relay race, where a group of people race to pick up an order from a restaurant. The system is similar to that of ride-sharing apps, where drivers are pinged to pick up riders near where they dropped them off.
The efficiency is created because we will route a driver to pick up an order close to the last drop off. The deadhead trip back to the restaurant is eliminated.
Lower fees can be negotiated by restaurants with higher order volumes.
Restaurants can save more money by using self- delivery apps.
Restaurants who use Relay to fulfill their orders pay a marketplace fee only. The cost for an order can range from 5 to 15%.
Relay customers are able to pass delivery fees on to their customers. A restaurant owner can save a lot of money by changing to self- delivery.
As more restaurants learn about the potential for savings, the appetite for self- delivery is through the roof. New York, Philadelphia, Washington, DC, Miami, and Chicago are some of the places Relay serves.
Jimmy John's gives local independent restaurants the ability to operate like a Jimmy John's restaurant.
Restaurants are free to decide how they use self- delivery.
DoorDash said restaurants can use Flexible Fulfillment to delegate some orders to in-house fleets and DoorDash delivery drivers on a case-by-case basis.
DoorDash said that self-Delivery with Flexible Fulfillment is comparable in cost to other providers, with the opportunity to pass the delivery cost to customers.
Self- delivery is meant for merchant partners who would like to use their own delivery people.
It's up to the restaurant how they want to fulfill self- delivery, according to a spokesman for Grub Hub. Self- delivery has been offered by the marketplace.
The company helps restaurants drive more orders online. Self-delivery restaurants can choose how they want to fulfill their deliveries, even if they want to be their first choice.
Alex Vasilkin, the CEO of the delivery-software-management platform Cartwheel, said that fleets on his platform were starting to ask more questions about self- delivery options.
Relay's saw an opportunity to "uncouple" restaurants from delivery services while increasing revenue for their businesses.
Some delivery companies can't make the math work.
Colonel Delivery's Ron Flickinger said Relay might be able to monetize self- delivery for restaurants. He said that it wasn't necessarily the case in Kentucky.
He said that 70% of DoorDash customers in Kentucky use the DashPass program, which offers members free delivery. Delivery fees can't be passed on to DashPass customers.
If his restaurants decided not to use DashPass, it would be a problem. The DoorDash marketplace commission fee increases due to fewer orders coming in.
DashPass complicated things with self- delivery. He still advises Relay's restaurants to opt out of DashPass, even though it doesn't usually result in a lower volume of orders in his regions.
Simmons said there were some issues with self- delivery. He said that the "hack" is worth looking into if it can save restaurants money.
He said there were some inherent problems with it. Thanks to the companies that can figure it out
Are you an experienced delivery person? Someone has a tip. You can contact this reporter by email at nluna@insider.com or by phone at.
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