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Stirring the delivery debate...again...

PPG2270:
Delivery charges are absurd. I realize that costs associated with delivery have gone up, but so have costs associated with every aspect of the business.

“Sir, l realize that cheese has always been a part of the pizza, but because cheese prices have gone up customers must now pay a cheese charge.”
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The price of gas has gone up far more than most items we use in running a pizza shop. If you don’t change with the times, you are doomed to fail. When gas was cheap, we could absorb delivery costs into the price of the pizza, that is no longer the case. The sensible solution is to pass the cost of delivery on to the people who use it. If the cost of cheese were to go up to 15 dollars a pound and stay there for an extended period of time, those who didn’t raise their prices would not survive. Any customer who does not wish to pay for delivery, has the option to pick up.
 
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OK. Here’s a story about delivery at a place where I used to work, single store, privately owned, starting from about 1988.

December 1988. (open about a year) No delivery charge. Very limited delivery range–20 blocks to the north, south, and west, 15 blocks to the east. Able to promise 45 minute deliveries most of the time. Total sales, about $2000/week.

June, 1989. Put in a $1 delivery charge. Still promising 45 minute times, making that most of the time.

May 1991. Still at $1 delivery, but now with a $10 minimum. 45 minute starting to get tough. Sales, about $4500/week.
1993…change of ownership starts; finalized in 1994.

by 1998…delivery range extended to almost anywhere, zones set up about every 8 blocks beyond the original delivery area. Original area still $1, add a dollar per zone (Zone 8, $8). Maximum of $10 unless it’s over 30 miles or so away. No minimum amount for delivery. Sales roughly $15,000/week. Delivery has grown immensly.

Now. Delivery is probably 40% of the sales now, total sales about $30,000/week. Deliveries to pharma reps, churches, schools, businesses, etc with $10 charges happening a couple of times every day. Weekends, 7-8 drivers going in the rush, taking 2 or 3 stops per somewhat close delivery. Times often 75-90 minutes. Some drivers have been there 10 years+. Every driver is able to do other jobs as well.
2nd store opened in 2003, is probably at 45% of the original store. Same basic approach and results.

The moral of the story:
If the product is good enough, the TOTAL product from phone order taker to actual food to delivery driver, people will pay for a delivery, tip well, and not mind waiting for it. It’s not hard, it just takes effort and integrity.
 
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Exactly Eupher! PPG a delivery fee is not absurd as it is a service you are providing. The entire issue here is do people think that the delivery charge is a tip and the driver gets it all. Some will and not tip…but most will tip. I agree with having some of this cost built into every pizza on the menu but also to educate your customers of how your price system works. I have no problem paying a delivery fee and I tip well. If a driver was working off the scale I descibed and tips were even just so-so…they would still be making great money for what they do. If after ACTUAL expenses a driver makes more than $12 an hour they are still ahead of most out there. Average $20 an hour after expenses…I would say pretty dang good! I can’t help that there are cheap customers that will always be that way and that some operations are right in the middle of an area that is all like that. Make a great product and this is not an issue! :idea: :arrow: :!:
 
As I continue to stir the pot…

Can we ‘assume’ we pay our driver $5/delivery, using their own cars…

That we only allow 2 orders per run, and the take a minimum of 20 minutes each…

So he ‘average’ driver/store delivers 3 orders/hour, between, say, 5-9…

And our average check is $15 while the driver gets $3 tip/delivery…

So, in theory, our driver would indeed make $14/hr?

Of course, these #'s will vary an less orders as the night moves along…

Still a decent p/t job…
 
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$5? Nope. $7.25. All tipped employees tip out 10% per night, every 3 hours worked is 1 share.
 
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Two things to consider when calculating delivery numbers:
  1. Unless the store owns the vehicles, the price of gas is irrelevant in the driver/per delivery scheme. The driver pays for gas out of the mileage (usually plus his/her own money.)
  2. Please do not include any mileage payments (including delivery charges, which are the property of the store) in the calculation of a driver’s hourly wage. This is wrong, and really bothers me. Mileage reimbursement is exactly that; reimbursement for vehicle expenses and is not a wage.
If stores were not forced to compete with the big 3’s $10 1980s prices, the actual cost (delivery costs included) could be figured into the actual customer cost. NOTHING costs the same as it did in 1980, except pizza. Why is that? (Other than screwing the employees, you guys tell me how the pizzas can stay at the same price 30 years running…)

On a side note, I work with families on a daily basis. One such family had invited me for “homemade pizza” one day at the beginning of services. We forgot about it for awhile until one day I saw a Pizza Hut box on the kitchen table and asked the dad “I thought you made the best pizza”. His answer - it’s cheaper to feed a family of 7 at PH than it is to buy the ingredients at the store. What sort of cheap slop are they serving these days? Is your stuff better than that? For goodness sake, advertise it as such!
 
PPG… I know this is an area of difference but in my structure the driver is not hurting or losing on this. That said…no they are not getting federal levels of mileage reimbursement either. My example:

$8 an hour base pay with a delivery fee of $3. 50/50 split of fee. Average 3 runs an hour per shift at +/- $2 tip per run. This yields the driver $18.50 an hour. Subtract $3.50 for gas and $3 to cover vehicle and other expenses and they net $12 an hour. Not bad pay for what they are doing. Now we all know that they will have hours with 1-2 runs and others with 3-5 all depending on the timing. Tips will also vary just the same. This is all about the averages. The other thing is that people in tipped positions need to be responsible and manage the CASH that they earn on a daily basis. This is where a lot of the pay issues or lack of pay seems to really come into play. They do not see the money in the paycheck so they did not make it and that is not the case always. It is just too easy to spend and not account for when it is there in smaller cash quantities. On top of the $12 an hour they make this example nets the driver almost $850 a month for actual vehicle expenses and those can all be deducted with the correct records being kept. This is not bad for a 30 hour per week job. :mrgreen:
 
Remember folks, this thread is not about the driver…it’s about the free or charge concept…there is a forum for driver discussions…

Thanks to the moderator!
 
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Same logic . . . different scenario . . . . .

Employees should receive their pay without such things as taxes and other charges broken out. Really, jut because taxes go up or new withholdings are required, there is no reason to break them out and separate them for the receiving employee. Employees don’t care how much it costs to maintain an employee, and onlu care about the bottom line. HOWEVER . . . they will D@MN sure have a whole different opinion if their pay goes down without some micro-detailed line item description of just where that money went. they won’t just be satisfied with “you’re getting paid less now”; they want to know that insurance premiums went up or that FICA contributions changed or that their wage rate changed.

The only way that PPG’s rather consistent and always dismissive point of view works is if you are an employee with limited perception of the macro-economics of the pizzeria business. If one’s one and only concern is driving price perception to leverage higher short term tips, then the premise works. If their is a concern for sustainability and growth of the larger business interest and the overall employment base, then one must consider the whole picture, of which delivery driver tips is a single element.

Their is a large amount of information that goes into the decision making of even the most price-driven customer. Every marketplace has a different culture and a different expectation of information. The gimick of “free delivery” is less effective in many markeplaces than it used to be. Especially those operations whose model is not based on sheer volume scale of economy numbers will want to differentiate their products from the economy/scale driven models. As the slowly growing nutrition attention is driving a slow change in expectations even in fast foods, infomation is becoming valuable. As more people are learning how to make informed financial decisions to manage budgets, information is commanding attention. Choices for reducing costs is become a customer value. Being able to save $3 or $5 by picking up while out on errands is a higher perceived value in many markets. To tell those people they gotta pay the same price, even when giving a reduced cost load will alienate the customer and drive traffic to the least profitable service mode in the store. Becuase, by building th delivery price . . . the real, actual all-in price into every pizza means that there isn’t a pickup price unless there is a totally different pricing structure, in which case there is now a de facto delivery charge, customer confusion, complication of message, and so on.
 
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qcfmike:
$8 an hour base pay with a delivery fee of $3. 50/50 split of fee. Average 3 runs an hour per shift at +/- $2 tip per run. This yields the driver $18.50 an hour. Subtract $3.50 for gas and $3 to cover vehicle and other expenses and they net $12 an hour.
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There is no split in the delivery fee. It is mileage and not income.

$8 base pay plus $6 (3 runs @ average $2 tip) is $14 per hour. You admit that your drivers do not make the IRS rate of mileage. Ok, must drivers don’t anyway (but they should, that is a different argument.) Let’s face it, even at $14 per hour most drivers aren’t buying brand new cars (it would be moronic to deliver in one anyway.) The point is that it probably costs more to fuel/fund an older vehicle. The difference in the amount it actually costs to operate the vehicle from the mileage paid comes out of the $14 per hour theoretical base.

On a side note (and more realistic,) most pizza shops are now paying in the $4-$5 range per hour. The $14 base now becomes $10-$11 before extra vehicle expenses. I was making that much as a driver in 1997 when gas prices were less than $2/gal.

Trust me folks, it is a sad state of affairs for drivers these days. The wages are the same as (or less than) they were 15 years ago. The mileage has not gone up that much (average $.25-$1 more) and the delivery charge (non-existent 15 years ago) is still fooling (some) customers into erroneously believing that the charge goes to the driver (most people do NOT read disclaimers stating otherwise.)

To Nick- (no point recopying and typing another post): Yes, drivers look at the bottom-line paycheck. Most do not (especially these days) monitor or care about the business expenses. That is the operator’s job. Apparently, drivers (in general) care about the stores’ bottom line as much as the stores care about the drivers’ bottom line.

Just saying… 😃
 
PPG2270:
Trust me folks, it is a sad state of affairs for drivers these days. The wages are the same as (or less than) they were 15 years ago. The mileage has not gone up that much (average $.25-$1 more) and the delivery charge (non-existent 15 years ago) is still fooling (some) customers into erroneously believing that the charge goes to the driver (most people do NOT read disclaimers stating otherwise.)
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My drivers are paid very well. In fact at $6 per hour on a paycheck I have drivers who make $18 per hour without adding in the 5% comission or their hourly paycheck. Yes that is cash tips! And I will directly point to the fact that I have FREE delivery!!!

It is great that you point out that you are making the same as in 1997. So are the insiders! And all on pizza prices that are the same as in 1991!!!

So cry me a river somewhere else.

The discussion was if FREE delivery made any sense these days and having done it both ways (and survived it!) I will say FREE Delivery is best for me. Then I OFFER a Carry Special (that I DO NOT ADVERTISE) to those who want to save us the trouble. Maybe I am a driver at heart?

Anyway - making money for myself is just asa important as those working for me.
 
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IN MY MARKET The customers are aware of the delivery charge and expect it. I was at one point the only pizza place that was offering free deliver and was constantly asked for a discount when the customer chose to pick up their order.

In many ways this discussion runs a close parallel to charging the customer for using a credit card or giving a discount for using cash. The customers may or may not be aware of the cost to the business but the cost is real and must be recouped.
 
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We charge for delivery - $5.50 zone 1, $6.50 zone 2 & $8 zone 3 and people pay it. The chains charge for delivery and people pay it - Doms $3 per pizza - $6.95 pick up or $9.95 delivered with min $20 order = $6 delivery + more if more ordered, PH $8 delivery and Eagle Boys the same.
Our drivers still get tips but remember we are in a society that pays high wages and tipping is not a way of life here so anything is gratefully accepted.
To give you an idea of how people are used to paying for delivery and will rather pay it than come pick up, last week (26th) was Australia Day (like yur Independence Day) which was a public holiday. For various reasons we could not get one driver to cover for our normal one who was away on holidays for the week, despite by law we were compelled to pay double time and a half penalty rates for the night which meant the drivers were on $40 per hour !!! plus delivery allowance from $2.50 - $6 per delivery based on zones, plus any tips gathered.
So no drivers and no delivery.
We had around 12 orders who wanted delivery and not one of them came to pick up. Normally we get around 75 - 90% pick up but this day not one. I guess because it was very, very hot people had been partying and were drinking booze and couldn’t drive or were just too lazy that day.
They probably phoned around that day to find someone who delivered because they specifically wanted delivery and where ever they went they got charged
The point is that if you have a delivery fee and people know they have to pay for delivery SERVICE then they pay or they save the fee charged for a CONVENIENCE for them. The choice is theirs.
We get people phone to place orders and some ask how much do we charge for delivery and most then just place the order. I think those who say that they will pick up instead come in at around 1%.
Nowdays we never get complaints about how much is charged for delivery. People get charged delivery for everything from everyone so a fee is not a point. The mindset is that if you want a SERVICE and CONVENIENCE of delivery then it is going to cost.
It is a conditioning factor that if you charge for delivery then customers get used to paying for it.
Dave
 
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Patriot I got a laugh over the “Edited to add size and color!” LMFAO! I am tired of the same old dance… which is why no matter what I say or think… Plan A is still the best.

Plan A: Great Pizza, food, and drinks. Great dining room experience with real appeal that makes people want to dine in. Pickup if you like. Delivery… HeII No! Get off your lazy a$$ and come pick it up!!! :x
 
I appreciate everyone’s thoughts & comments…

We already have an awesome product, but our menu is just a bit more limited this time around…

Ya, we got the Big 3 near our doorstep, and a few good indies, and some average ones…but the market stats lead me to believe it will support one more shop…

Nearly all my competitors have a delivery fee, and PJ’s has the largest…$2…that store I’m told, was once the busiest in their system…

Our approach is just a little bit different this time around as well, as we’re back in a popular strip center, with walk-in traffic…and a display kitchen…

We’re leaning towards a ‘free deliver’ concept, with the price of delivery built into the pizza, with special deliver combos on-line…

I’ll keep ya’all posted…
 
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Patriot'sPizza:
I appreciate everyone’s thoughts & comments…

We already have an awesome product, but our menu is just a bit more limited this time around…

Ya, we got the Big 3 near our doorstep, and a few good indies, and some average ones…but the market stats lead me to believe it will support one more shop…

Nearly all my competitors have a delivery fee, and PJ’s has the largest…$2…that store I’m told, was once the busiest in their system…

Our approach is just a little bit different this time around as well, as we’re back in a popular strip center, with walk-in traffic…and a display kitchen…

We’re leaning towards a ‘free deliver’ concept, with the price of delivery built into the pizza, with special deliver combos on-line…

I’ll keep ya’all posted…
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Ever given consideration to how the chains do it here? eg. Large pizza $7.95 pick up $10.95 delivered or deals such as 2 large pizzas, garlic bread and drink plus wings for $25.95 pick up $28.95 delivered.
All you have to do is have your POS set up for pick up / dine in and for delivery.
Customers call in and you staff first thing ask " pick up or delivery?". Customer says delivery and they hit the delivery code and so on.
You find most customers who get delivery never come into the store so the price difference is not evident. Won’t affect tipping as they don’t see a separate delivery charge ad think this is the standard all up cost.
Must work because the chains run rampant here on ths sytem and you see Domino cars on the road all the time.
Dave
 
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314:
My drivers are paid very well…

It is great that you point out that you are making the same as in 1997. So are the insiders! And all on pizza prices that are the same as in 1991!!!

So cry me a river somewhere else.
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Riiiiiiight… (And by the way, I don’t make the same amount as I made in 1997. I’m not that stupid. I moved on. )

Why are your prices the same as in 1991? Are your costs the same as in 1991? No, you just take it out on the employees. Your post proves it.
 
Patriot'sPizza:
PPG…THIS IS NOT ABOUT DRIVER’S…

Now I feel better…


Edit to add size and color
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I beg to differ. The thread is about delivery charges. The people collecting (but not receiving) these charges are the drivers. It IS MOST CERTAINLY ABOU T DRIVERS. It is true that the choice to implement a charge affects the shop, but it also affects the drivers.

Now I feel better…
 
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Daddio:
IN MY MARKET The customers are aware of the delivery charge and expect it. I was at one point the only pizza place that was offering free deliver and was constantly asked for a discount when the customer chose to pick up their order.

In many ways this discussion runs a close parallel to charging the customer for using a credit card or giving a discount for using cash. The customers may or may not be aware of the cost to the business but the cost is real and must be recouped.
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Absolutely, but with credit card transactions there is no gray area as to who is receiving the charge (and why.)

Example: All credit card transactions are subject to a $x.xx fee for processing. (ok we get it.)
All delivery orders are subject to a $x.xx fee (for what? - a service offered? ok- so the person performing the service receives the service fee right? NO).

Another thing too. I don’t understand why someone picking up an order would ask for a discount. Did the inside person not quote the price on the phone? To me, this is the same as person trying to “bargain” with the driver at the door. The price is the price.
 
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