Delivery apps are really payday lenders

We always say to our retail, specifically our food and restaurants clients, to migrate from aggregated platforms like Rappi or Ifood to their own e-commerce. Why? In third parties platforms, their value proposition and all the differential aspects of the brand are lost, to price competition. That they wish happens with their direct competitors, but instead, they compete with all the brands that deliver food (in general).

We´ve been doing more research into these delivery apps, finding more unpleasant aspects from the structure that affects not only brands but couriers too.

For small restaurants during the pandemic, the need to have a delivery service was so big, their only option was to join these delivery apps. But these giants instead of hearing and talking to them, establish a 30% commission on every transaction, did not structure a healthy and secure program for the delivery employees and became a monopoly that ruled by their own rules.

 As they are the only option for many, the engagement pitch makes their delivery service a savior, providing the infrastructure and people resources they do not have in exchange for a commission of every transaction. It sounds quite pretty and as if it was the perfect solution for the small business need. But as we said, and as they have shown, it seems their only purpose is to drain and gain all the profit they can "lending" the couriers.

Do not forget, as they did not care about talking with their users, all the logistics and operations needed to supply their products, were not taken into account. It has happened more than once the prices were different, specifically low, from the business margin, making the small business lose only to have more requests on their apps.

Only in Rappy, Latam unicorn of delivery app is looking to close the month with 11.000 orders per hour! Imagine the more than 50.000 businesses (between small and large) all competing for the attention of the platform's users with discounts and lower prices, and the startups and small local businesses trying to maintain their margins by paying the cap and identifying the needs, desires, and pains of their users. It is insane!

Now think if you are an established restaurant that has its channel for not only selling and delivering the products ( e-commerce )but with a product-market fit, community, and brand lovers. Are you willing to trust third parties delivery businesses to handle your value proposition?

That is why we believe so much in the generator model that we constantly talk about. These provide you to enhance your business from the raw materials, to process, to design, and delivery with the clients that are needed of your specifical solution.