Pizza Hut Goes Doordash: How California Pizza Chains Are Adapting With Third-Party Delivery

TLDR

As minimum wages for delivery drivers increase, pizza chains in California are looking for affordable solutions to meet demand and navigate rising labor costs.

Beginning in April, California-based fast-food restaurants with 60 or more nationwide outlets will be forced to pay their employees $20 per hour, exceeding the state minimum wage of $16 due to go into effect on January 1. Despite its history of avoiding third-party delivery services, Domino's has recently established a collaboration with these companies to grow its revenue. Meanwhile, Pizza Hut is cutting off over 1,200 delivery drivers in California until February 2024 and moving delivery to third-party providers such as Doordash. According to Business Insider, a second Pizza Hut franchisee, Southern California Pizza Co., and its affiliates would discontinue in-house delivery services, displacing about 840 drivers.

Pizza Hut and Other Pizza Chains Shift to Third parties for Delivery

With the rising costs of hiring and retaining delivery drivers, major pizza chains are turning to third-party delivery services like DoorDash and Uber Eats to get pizzas to customers' doors.

• Pizza Hut and Little Caesars have inked deals with DoorDash. Offloading deliveries cuts costs and provides access to more drivers to meet demand.
• Similarly, Papa John's is rolling out DoorDash delivery to 1,400 of its restaurants. Instead of hiring drivers at $25-$35 per hour, they can outsource deliveries and just pay DoorDash a commission.
• Dominos has announced its partnership with Uber Eats to facilitate deliveries in the US and 27 other countries. This allows them to tap into a vast network of drivers without having to employ them directly.

For small restaurants and coffee shops, handling deliveries in-house with high-wage drivers may not be feasible. This is where working with an on-demand delivery provider can help. Per Diem offers restaurants and cafes a white-label mobile ordering app with Doordash delivery integration. With Per Diem, eateries can have their own branded app for online orders while leveraging Doordash for convenient delivery.

The app even integrates with Square POS for seamless payment processing. This allows restaurants to easily manage online orders and delivery logistics all in one place. As delivery becomes a must-have for dining establishments, partnering with a service like Doordash through an app like Per Diem's can be a smart and affordable solution. Restaurants can focus on food and operations while leaving delivery to the experts.

The Challenges of In-house Delivery With Rising Wages

Setting up infrastructure for in-house delivery could take months and cost thousands of dollars. With the recent increase in California's minimum wage for delivery drivers, providing your delivery is becoming expensive for many restaurants.

• Delivery services like DoorDash can skim 15-30% of a restaurant's earnings per order, making it a significant expense. However, with the new $25-$35 per hour minimum wage requirement for delivery drivers, the costs of running your delivery service often outweigh the fees.
• Adding an in-house delivery service requires investing in hiring, training, scheduling, and managing drivers. It also means providing vehicles, insurance, payroll, and HR administration. These high startup and operational costs make third-party delivery an appealing alternative.

With Per Diem's mobile ordering app, restaurants can integrate with delivery partners like DoorDash without investing months to develop their app with the in-house delivery system. Per Diem configures everything behind the scenes, so your customers order directly from your custom-branded menu. You avoid massive app development costs while gaining a turnkey delivery solution.

As major pizza chains shift to services like DoorDash for delivery, Per Diem offers an affordable way for small eateries to make the same transition. Removing the burden of in-house delivery lets you focus on food and service, not logistics. Considering California's rising labor costs, integrating third-party delivery gives restaurants an edge.

How Third-Party Delivery Helps Optimize Restaurant Operations

With third-party delivery services like Doordash, restaurants can streamline operations and maximize revenue potential. Here's how outsourcing delivery optimizes your business:

• Increased Order Volume - By tapping into a larger delivery network, your restaurant can fill more orders from new customers. Doordash partnership expands your reach beyond just in-house delivery capabilities.
• More Efficient Staffing - You won't need dedicated delivery drivers on staff. Your existing servers and cooks can handle increased order volume. Labor costs go down.
• Reduced Overhead - No more delivery vehicle expenses and maintenance costs. Liability insurance costs also decrease without the risks of an in-house delivery fleet.
• Seamless Integration - With an online ordering app like Per Diem, orders flow directly to your POS and Doordash. It's fast and efficient.
• Improved Operations - With streamlined order-taking and dispatch, your staff can focus on food prep and providing amazing service. Things run more smoothly.

By leveraging third-party delivery, your restaurant can boost revenue while controlling costs. A mobile app with integrated online ordering and Doordash delivery takes the hassle out of delivery logistics so you can focus on satisfying your customers.

Your White Label Mobile App With Doordash Integration

With delivery costs rising, third-party apps like DoorDash offer restaurants a more affordable option than in-house delivery staff. But their high commission fees cut into profits.

With Per Diem, you get:

• A branded mobile app that seamlessly integrates with the Square POS system
• The ability to offer Third-party delivery while reducing commission fees
• Increased customer convenience with online ordering and loyalty rewards

Rather than maintain an expensive in-house delivery fleet, you can leverage DoorDash's network of drivers at a much lower commission rate through Per Diem's integration. Customers can order ahead and have their food delivered with just a few taps on your branded app.

And with Square integration, every order flows directly into your POS. That means faster service, better accuracy, and the ability to track sales data.

For more information on how to set up and manage doordash delivery with Per Diem, visit our blog.

FAQs

Third-party delivery services like DoorDash are changing the game for major pizza chains. With rising labor costs making in-house delivery less appealing, brands like Domino and Pizza Hut increasingly turn to apps like DoorDash for last-mile delivery.

• How are pizza chains using Doordash for delivery? 

Brands allow customers to order directly through their website or app, and then facilitate delivery via Doordash drivers. This allows them to offload delivery operations while still controlling the ordering process.

• What are the benefits? 

Using DoorDash for delivery provides flexibility, reduces labor costs, and expands delivery radius. Brands can dynamically scale delivery needs without hiring more in-house drivers. They also avoid paying drivers hourly wages and benefits.

• What does this mean for smaller pizza shops? 

The rise of third-party delivery apps levels the playing field. With Per Diem, small pizzerias can get the same delivery powers as the big chains. Integrating with DoorDash lets you focus on your amazing pizza while focusing less on handling the tech side.

• How does Per Diem help? 

Our customizable app lets you take online orders directly from customers. Then our DoorDash integration enables delivery. Avoid the hassle of managing your fleet of drivers. Simply prepare orders and let DoorDash zip them to hungry customers.

Final Thoughts

With the rising costs of in-house delivery, it's clear that partnering with third-party services like DoorDash is the way forward for restaurants to reach customers without breaking the bank. By integrating with turnkey solutions like Per Diem's ordering app, pizza chains, and cafes can focus on what they do best - making great food - while still providing the convenience diners expect. Don't let delivery costs eat into your margins. Take control with Per Diem and keep profits high while customers stay happy. The choice is clear - adapt now or risk getting left behind.

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