It’s clear that an increase in home delivery will be one of the enduring after-effects of COVID-19. Pizza operators of all sizes are offering a delivery function now and, as such, must make wise decisions about how to implement and sustain a profitable home delivery capability.
The biggest hurdle is attracting and retaining dependable, qualified drivers. Many operators, faced with a multitude of third-party options, are realizing that outsourcing — while quick and easy to implement — isn’t the answer, due to hefty fees and other issues.
What’s more, the lack of control is concerning. Owners spend years building and protecting a reputable brand. Introducing third-party vendors welcomes the risk of jeopardizing their reputation as there are no guarantees drivers will be reliable or customer friendly. One bad delivery experience could turn a customer away for good, and depending on the business relationship, restaurants can also lose control over valuable customer data.
Making direct-employment delivery work
The advantages of direct employment outweigh the risks of third-party delivery. Restaurants that employ their drivers can control factors that affect revenue such as service levels, the customer experience and brand identity. Most importantly, revenues and marketing data are retained within the business, making it easier to drive repeat visits and earn customer loyalty.
To create a strong in-house delivery capability, it’s critical to provide drivers with the same — or better — employment relationship. Among the most consequential is timely access to their earnings.
While it’s a fact that drivers are attracted to companies that can pay quickly, this can be a problem for restaurants. The majority of customers who place delivery orders pay for food and driver tips with credit or debit cards—and it’s difficult to have enough cash on hand to cover tips and mileage.
Most third-party delivery services offer direct deposit, enabling drivers to access their pay from two to three business days after their shift ends. Restaurants cannot only match this benefit, but provide an even better option through the availability of instant pay.
The appeal of quick payment to drivers is not surprising. It’s more important than ever for delivery drivers to get paid in real time to maintain their life needs. A study by the American Payroll Association found that three-quarters of all Americans experience financial difficulty if their paychecks are delayed for even a week.
Moreover, many hourly workers don’t have a bank account for direct deposits. According to the FDIC, 6.5% of American households were still “unbanked” as of 2017, making early access to earnings via direct deposit impossible. That’s 8.4 million American households.
Timely earned wage access is a benefit for restaurants as well. In addition to streamlining the process of paying drivers after each shift, it eliminates the need for cash. The onboarding process is easy and fast, making it a valuable offer to leverage during the hiring process.
Instant pay can make all the difference for restaurants to support their delivery drivers’ financial needs. For example, Instant Financial allows employers to offer this benefit to their employees at no cost. Employees are supplied with a personal Instant Visa prepaid debit card where payments can be sent.
They download an app that sends a notification at the end of the driver’s shift, enabling the employee to choose up to one-half of the hourly wages earned. It also allows employees to receive their tips and mileage reimbursement electronically.
If the employee chooses, money is loaded instantly onto the Visa debit card, which is good for purchases at gas stations, grocery stores or any place that accepts Visa. Alternatively, employees also have the option to send funds instantly to their bank account.
Times are changing
It’s becoming evident that drivers expect to be paid in real time, electronically and securely, to maintain their ongoing needs — and to pay for gas to continue earning a livelihood.
Traditional methods of paying wages are failing hourly workers. People need financial security, especially in times of uncertainty. Many are accustomed to getting what they need with one click on their phone or device and with the rise of the gig economy, more people have access to getting paid at the end of their shift instead of waiting weeks.
Delivery drivers have piloted the front lines, not only to keep businesses afloat during the COVID-19 pandemic, but to also keep families home safe and fed. They’ve put their own health at risk to provide for their communities. Restaurant owners can ensure their drivers are being provided for, too, and an instant pay benefit is a leap in the right direction.
Steve has spent the past two decades utilizing the key principles of “operating with integrity” and “acting with urgency” to develop successful technology companies. The Founding CEO and now serving as the Executive Chairman of Instant Financial, Steve brings an extensive background delivering financial technology to large enterprise customers.