Pizza Today -December 2022 - 31

T
o answer the question of
whether to charge your
customers a fee for delivery,
let us begin by reviewing the history
of pizza delivery from the 60s
through today.
DO: Learn about the history of
delivery fees
In 1965, a man by the name of
Tom Monaghan not only put pizza
delivery on the map but set the standard
of pizza delivery for the next
35 years. As founder of Domino's
Pizza, Monaghan introduced FREE
delivery. He did this by charging
more per pizza ($1-$3 more) than
was standard at the time. In other
words, he called it FREE delivery,
but incorporated the cost of delivery
into the price of the pizza. This brilliant
strategy gave Domino's a
powerful marketing strategy that
forced many pizza operators to follow
suit and provide FREE delivery.
DO: Know that FREE delivery
is not truly free
FREE delivery took its first real
setback due to the 9-11 attacks and
the subsequent insurance restructuring.
Prior to 9-11, a pizzeria
owner's business insurance covered
the drivers using their own vehicles
for delivery. After 9-11, insurance
companies created a new type of
insurance called 'Non-Owned Auto
Insurance'. The regular business
insurance excluded coverage of
non-company-owned vehicles.
Pizzeria owners were required to
purchase this additional insurance if
their drivers used their own personal
vehicles. Also, as part of this insurance
restructuring, personal auto
policies excluded coverage for work
use. In other words, without nonowned
auto insurance, if a driver gets
in an accident on the job, you may
lose your pizzeria.
DON'T: Deliver without nonowned
auto insurance
This added expense for pizza
DECEMBER 2022 / PIZZATODAY.COM / 31
delivery caused most national pizza
chains to begin charging the customer
for pizza delivery. FREE delivery,
although never truly free, quickly
became a thing of the past. The fees
started as low as 50 cents and grew over
the next 20 years to reflect increasing
costs of delivery.
The next historical moment in pizza
delivery fees came with the advent of
third party delivery. Companies like
GrubHub and Doordash added a whole
new level to delivery charges. Delivery
fees, handling fees and higher menu
prices for delivered products are fees
passed on to the customer. It became
the new norm that if you purchased
food through a third party delivery
company, you may pay up to double the
price of picking the food up at the
pizzeria. The great news about third
party delivery companies is that they
'trained' consumers to expect to pay
more for delivery.
So, where does this leave you, the
pizzeria owner/operator? To Fee or Not
to Fee?
DO: Charge enough to make a
profit
Consider the costs, which vary
depending on the type of customer.
Dine-in, Take-out, and Delivery.
* Dine-in. Counter and table servers,
rent on the seating space, dishes,
maintenance, restrooms and parking
* Take-out. Your most profitable customer
*
Delivery. The added expenses of third
party companies, or if you DIY
(Do-It-Yourself) delivery, you have
the added expenses of delivery drivers,
non-owned auto insurance, driver
gas/mileage reimbursement, delivery
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Pizza Today -December 2022

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