Domino's delivery service?

Is a restaurant delivery service model focused on b2b a viable, scalable and fundable venture?

• The proposition is; rather than generate customers and forward to the restaurant for delivery (there r many firms doing so, with some even managing the delivery execution of it), we focus on providing a delivery service to the restaurant for the orders generated by themselves. The advantages for the restaurant is that the cost incurred by them towards their home delivery unit would be much higher compared to commission paid to our service + guarantee of timely delivery. So its' a cost saving for the restaurant in addition to a third party taking over thier headache. From our standpoint, since there is no customer acquisition cost or marketing cost, we only have to build a platform of labour backed by tech and let economies of scale bring back a nominal commission. We are currently testing this in a few areas and are very happy with the volumes. Our belief stems from the fact that a third party brand (online food ordering models) can never generate more than 10% of delivery orders compared to the restaurant themselves. Hence this becomes a clear volume game.

• Answer:

  Scalability is a huge issue.  For every new city you move into, much of your infrastructure needs to be built again from the ground up.  When you move into a city, you need to hire and vet drivers, buy or lease vehicles and establish connection with local eateries.  For big cities, you might need multiple locations to base yourself out of - essentially new locations.  For each city you'll need to establish service regions based on the specific traffic patterns, locations of eateries, response times of eateries.  If you are guaranteeing timely delivery, then you'll need to establish response times from each restaurant you service.