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Lack of Customer Loyalty Troubles Food Delivery Services

Lack of Customer Loyalty Troubles Food Delivery Services

New players and older brands join the competitive food delivery field, now with a focus on groceries.

Everyone is fighting for a bigger piece of the food delivery service pie, and it doesn’t stop at simply delivering meals from restaurants. Now, food delivery services are incorporating new options, including delivering groceries from convenience stores and supermarkets.

DoorDash, the largest US third-party delivery company for restaurants, has launched a new grocery service in an increasingly crowded market dominated by Instacart and Amazon Fresh. Grocery delivery on DoorDash’s app will begin with Meijer, a Midwest grocery chain, among others, and expand to other regional and specialty chains.

Related: Uber Buys Food Delivery Service Postmates for $2.65 Billion

DoorDash grocery orders are fulfilled inside of supermarkets by employees of Swiss staffing agency Adecco Group, who then put orders on a pick-up shelf for DoorDash drivers to deliver. DoorDash pays Adecco a fee based on an hourly rate for the number of Adecco employees that DoorDash requests in any given store.

The new service will be included for members of DashPass, the company’s subscription offer. Non-subscribers will pay delivery fees starting at $3.99. Grocery stores will also pay the company a percentage of sales to cover delivery costs.

The new service follows an announcement from DoorDash earlier this month that the company launched a digital convenience store with more than 2,500 items to serve customers in Chicago, Cincinnati, Columbus, Ohio, Dallas, Minneapolis, Phoenix, Redwood City and Salt Lake City.

DoorDash, along with Uber Eats, Grubhub and Instacard, also recently began working with ExxonMobil dealers to offer consumers delivery of essentials, such as milk, eggs and cleaning products. The service is now available through more than 10,000 locations. To receive merchandise from an ExxonMobil location, the customer simply orders online from their preferred delivery provider or through a mobile app. The convenience store employee fulfills the order, and it is then delivered via the preferred service.

Operating out of Las Vegas, another low-cost provider to the restaurant mobile food-ordering delivery business, TripDelivers, entered the food delivery arena, launching its services in 36 markets around the US.

TripDelivers is owned by Tryp Technologies, a rideshare company entering the marketplace with a unique software-as-a-service (SaaS) business model. The company’s independent driver-owner operators earn 100 percent of the ride fare and 100 percent of the tip. The company also provides the riders, customers and driver with identical receipts to ensure fare transparency.

TripDelivers will enter the market through restaurant/grocery delivery and pickup channels and expects to have more than 500,000 restaurants as a reference in its app. The company also expects to garner substantial interest from restaurant partners, due to policies that separate it from the competition.

Restaurants will receive direct payment of earnings, which will reduce the payment timeframe. TripDelivers has a no menu mark-up policy, a common delivery service practice largely unknown to consumers. Menu pricing markup has been a point of contention with restaurant owners, who see it as a form of double dipping.

Despite overall industry growth, the battle for customers is getting more intense because fewer of today’s diners are loyal to just one service. As more restaurants form exclusive delivery partnerships, more diners are going to have to hop between apps to cover all their favorite takeout spots. The least loyal customers, it seems, will also be the most well fed.