A mystery shopper study found that 12% of delivery orders were bundled by third-party suppliers. | Photo: Shutterstock
This story is part of a series based on “The Path to Third-Party Excellence,” an upcoming mystery shopper study from Intouch Insight that will be published exclusively for Restaurant Business and its sister publications CSP Daily News and Nation’s Restaurant News.
The practice of third-party carriers bundling multiple orders into one trip increases delivery times and harms customer satisfaction.
That is loud The path to third-party excellencea forthcoming report from research firm Intouch Insight, which used mystery shoppers to place 600 delivery orders at restaurants and convenience stores across the U.S. Orders were split evenly between the three major third-party delivery apps — DoorDash, Uber Eats and Grubhub — and restaurants/c-stores.
The comprehensive study offers unique insights into order bundling, a tactic long used by restaurant delivery apps but rarely discussed on quarterly earnings calls or in the press.
Intouch Insight shoppers were instructed to order from any store they wanted, but were not allowed to use a paid membership or pay extra for direct delivery. Results showed that 12% of orders were picked up and delivered by a courier who made other deliveries en route. Shoppers were notified in the app when this happened.
These bulk deliveries typically took longer and resulted in lower quality food and a poorer customer experience, potentially having a negative impact on the restaurant.
According to the results, the last leg of a collective delivery took on average more than 42 minutes – or more than 13 minutes longer than for orders that were transported directly to the customer.
This delay tended to have a negative impact on the food. When a meal was part of a batch, the temperature was correct 77% of the time, compared to 95% of the time when the driver made no additional stops along the way.
Given the long wait times and cold food, it is perhaps no surprise that customer satisfaction was significantly lower for bulk orders. Overall satisfaction for these orders was 79%, 10 points lower than for nonstop orders (89%).
In theory, batching allows delivery apps to fulfill orders more efficiently, thereby reducing their costs – especially in markets where couriers have minimum hourly wages. And it can be attractive for couriers because it allows them to spend more time on the road and earn money.
According to Intouch Insight’s findings, batch delivery was relatively common, but the frequency varied by app. 19 percent of orders placed on Uber Eats were part of a batch delivery, compared to 12 percent on DoorDash and 5 percent on Grubhub.
A DoorDash representative said there are several factors that determine when orders are bundled, but did not go into detail. In an interview at the Skift Global Forum last year, Uber CEO Dara Khosrowshahi said the company uses artificial intelligence to determine when orders are bundled, according to a transcript posted on financial services site AlphaSense.
It’s up to couriers whether they want to accept a multi-item order when it’s offered to them in their app. There doesn’t seem to be a way for customers to avoid this without paying extra. Extra fees range from $1.49 for Uber Eats’ Priority delivery to $2.99 for DoorDash’s Express option.
Likewise, restaurants are not able to opt out of being included in a collective delivery.
“(Batch delivery) doesn’t work for the customer,” says Sarah Beckett, marketing director at Intouch Insight. “But for the restaurant or supermarket, it also raises the question of how can they protect their reputation and their brand when they no longer have control over some of these things?”
One solution, she believes, is to invest in better packaging to ensure food stays fresh on multi-stop trips.
The DoorDash representative said Intouch Insight’s findings did not match the company’s internal data on bulk orders, but declined to share the data because it was confidential information.
The representative added that batch processing is designed to get orders to customers faster, especially during peak periods.
Uber Eats sometimes bundles orders “to keep delivery prices low and improve reliability for customers, enable couriers to earn more and prevent restaurants from becoming overburdened,” a spokesperson said. The bundling could also help reduce the number of vehicles on the road, the person said.
A Grubhub spokesperson said 86% of the company’s orders arrive on time, but did not provide a figure for bulk orders.
“Our priority is to provide a great experience to the consumers, merchants and delivery partners who trust our platform. We are constantly optimizing to provide exceptional service to users across the country,” the spokesperson said.
The findings highlight another potential weak point in the relationship between restaurants and third-party delivery services. Although the apps have become an important revenue channel for many operators since the pandemic, some complain about high delivery commissions, a lack of data on their delivery customers and a loss of control once an order leaves their store.
At the same time, many said they had no choice but to use the apps because they had become an important source of revenue and exposure for them.
But the results also show that consumers are generally quite satisfied with the third-party delivery experience. Overall shopper satisfaction with restaurant delivery across all three apps was 91%, a 4-point improvement from 2022, when Intouch Insight last measured it.
Intouch Insight will publish the full results of its third-party delivery study on FSTEC Restaurant Technology Conferencewhich will take place from September 16-18 in Grapevine, Texas.
FSTEC is owned and operated by Restaurant Business’ parent company, Informa plc.
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