Restaurant Delivery: In-House vs. Apps – Pros & Cons

Introduction

 

Food delivery isn’t just a service—it’s a strategy. With delivery booming, restaurant owners need to decide: Should you run your own in-house delivery or go with third-party apps? It’s a decision that affects everything—your profits, customer experience, and how your brand is perceived.

Third-party platforms like Uber Eats and DoorDash can get your food to a much larger audience, but they come with high commission fees and little control over how customers experience your brand.

According to McKinsey, the food delivery market has tripled since 2017, hitting an estimated $150 billion globally in 2021. Despite this massive growth, profitability remains a major challenge, as commission fees eat into revenue.

In-house delivery gives you full control—from the way your food is packed to the interaction customers have with your delivery team. But it also means investing in drivers, vehicles, and logistics. Many restaurant owners are now weighing whether to invest in their own delivery infrastructure or continue relying on services like Uber Eats and DoorDash. 

So, how do you decide? Let’s break down the pros and cons of each approach so you can make informed decisions that align with your business goals, budget, and customer service expectations.

 

Understanding Delivery Services

 

How In-House Delivery Works

Managing in-house delivery means hiring drivers, organizing logistics, and handling everything from order placement to drop-off. The upside? You control every aspect of the customer experience, ensuring that your food reaches customers just the way you want it to.

With in-house delivery, you get:

• Direct customer communication – No third-party intermediary means a direct line between your restaurant and your customers. You can handle special requests, resolve issues faster, and provide personalized service.
• Brand consistency – Your food is packaged and delivered exactly as you intended. You maintain full control over presentation, handling, and branding, which is crucial for creating a strong customer experience.
• Long-term cost savings – While the upfront investment can be high, in-house delivery eliminates the ongoing commission fees that third-party platforms charge per order. Over time, this can significantly increase profit margins.
• Better Quality Control – By managing your own delivery team, you can establish procedures for food handling, packaging, and customer interactions that align with your business’s standards.
• Data Ownership – With in-house delivery, you have access to valuable customer data, including order history, preferences, and purchasing habits. This information can help you personalize marketing efforts and build customer loyalty.

Challenges:

• Upfront investment – Launching an in-house delivery service requires a financial commitment. You’ll need to hire drivers, purchase or lease vehicles, invest in delivery equipment, and possibly expand kitchen operations to accommodate increased demand.
• Operational complexity – Managing a delivery fleet involves driver scheduling, vehicle maintenance, and real-time order tracking. You’ll need logistics software and efficient dispatching systems to optimize routes and delivery times.
• Staffing and Training – Hiring reliable delivery drivers and training them to represent your brand properly is essential. Unlike third-party services, where drivers work for multiple restaurants, your in-house team is an extension of your business and should be trained accordingly.
• Liability and Insurance – When handling deliveries yourself, you assume liability for accidents, food safety, and customer service issues. You’ll need proper insurance coverage to protect your business against unforeseen incidents.

Many restaurants invest in fleet management software to optimize delivery routes and reduce operational headaches. However, setting up in-house delivery should be something to incorporate into your business plan as it will require management and more money upfront.

How Third-Party Delivery Apps Work

Services like Uber Eats, DoorDash, and Grubhub provide a plug-and-play system for restaurants. They handle logistics, payments, and delivery, making it easier to focus on food quality rather than operations.

What you’ll get:

• Immediate Access to Customers – Your restaurant is instantly available to millions of users actively searching for food. This exposure can help attract new customers who may not have otherwise discovered your business.
• Simplified Logistics – No need to hire and manage delivery drivers. The app takes care of driver recruitment, order tracking, and real-time dispatch, reducing the logistical burden on your team.
• Built-in Marketing – Third-party apps promote restaurants within their platform, making it easier to attract new customers without investing heavily in independent advertising. High-ranking placements, featured promotions, and in-app deals can boost visibility.
• Flexible Operations – Since you’re not managing an in-house delivery team, you can focus on kitchen efficiency and food quality. This allows for smoother operations, particularly for businesses that don’t want to invest in full-scale delivery logistics.

The drawbacks:

• High Commission Fees – Apps typically charge 15-30% per order. For restaurants operating on thin profit margins, these fees can quickly add up and eat into revenue, making it harder to stay profitable.
• Lack of Control Over Customer Experience – Once food leaves your kitchen, you have little say in how it’s handled or delivered. Late arrivals, cold meals, or poor customer interactions can negatively impact your brand, even if the issue was caused by the delivery service.
• Increased Competition – Your restaurant is listed alongside dozens of competitors on the app, making it harder to stand out. Customers browsing the platform may opt for restaurants with better deals or higher ratings, even if your food is of higher quality.
• Reliance on Third-Party Policies – Restaurants must abide by the terms and conditions of each delivery platform, which can change over time. Policy updates, fee adjustments, or changes in ranking algorithms can impact visibility and profitability.
• Data Restrictions – Unlike in-house delivery, where you can collect and analyze customer data, third-party apps retain control over order history and customer insights. This limits your ability to build direct relationships and loyalty programs with repeat customers.

 

3 Key Factors to Consider Before Offering Delivery

 

1) Location

Delivery thrives in urban areas where customers prioritize convenience. If you’re in a high-density city, delivery demand will likely be strong. In suburban or rural areas, customers may prefer picking up their orders.

2) Venue Type

Not all restaurants are built for delivery. Fast-casual spots and comfort food concepts tend to do well, as their menu items travel well and maintain quality during transit. High-end fine dining, on the other hand, may struggle, as intricate plating and temperature-sensitive dishes can lose their appeal in takeout containers. However, some fine dining establishments have adapted by curating takeout experiences that replicate the in-restaurant dining feel.

For example, Michelin-starred Casa Enrique in NYC partners with DoorDash, offering a delivery menu designed to maintain its high-quality experience, including cocktail pairings and specialty packaging.

3) Target Customers

Before jumping into delivery, consider who your customers are and what they want. According to TouchBistro’s 2023 Diner Trends Report:

• 45% of Gen Z diners order takeout weekly.
• 38% of Millennials do the same.

If your restaurant serves a younger, convenience-driven audience—like busy professionals, students, or families—delivery could be a major revenue driver. Research customer preferences and consider surveying your current diners to understand their expectations when it comes to delivery services.

 

Pros & Cons: Delivery Apps vs. In-House Delivery

 

Benefits of Delivery Apps

• Wider reach – Exposure to a vast audience.
• Lower upfront costs – No need to invest in drivers or vehicles.
• Built-in marketing – Apps showcase your restaurant to potential customers.
• Customer insights – Access to ordering trends and reviews.

Drawbacks of Delivery Apps

• High fees – Eats into your profit margin.
• Less control – Delivery quality depends on third-party couriers.
• More competition – Your listing is side by side with competitors.
• Operational complexity – Managing multiple delivery platforms can be a hassle.

 

Cost Breakdown: In-House vs. Third-Party Delivery

 

 

Which Option is Best for You and Your Business?

 

If you’re looking for rapid growth, broad exposure, and a lower upfront investment, third-party apps are a great way to get started. They provide instant access to a larger customer base and eliminate the need for hiring drivers or managing logistics. However, if maximizing profits and maintaining complete control over food quality and customer experience is your top priority, in-house delivery might be the better long-term strategy.

The Hybrid Approach

Many restaurants find success with a hybrid model, using third-party delivery apps to acquire new customers while encouraging repeat customers to order directly through their own delivery system. This approach helps maintain visibility on popular platforms while reducing commission fees on returning customers.

Restaurants employing this strategy often use exclusive discounts or loyalty programs for direct orders, enticing customers to skip third-party platforms in favor of in-house delivery. Additionally, branding efforts—such as custom packaging, direct marketing, and personalized follow-ups—can help build stronger customer relationships while keeping delivery costs under control.

By combining the best of both worlds, a hybrid approach allows you to reach a broader audience while gradually transitioning to a more profitable and sustainable in-house delivery system.

 

Food Delivery App Fees Breakdown

 

Key Takeaways

• Commission rates vary based on service level and exposure tiers.
• Additional fees apply for marketing boosts and priority placements.
• Pickup orders typically have lower fees than delivery.

 

Cost Breakdown: In-House vs. Third-Party Delivery Apps

 

Major Cost Factors

• Commission Fees: Apps charge 20-30%, while in-house delivery has none.
• Driver Salaries: Hiring drivers means fixed wages, but app drivers are paid per order.
• Vehicle Costs: Owning delivery vehicles adds upfront and maintenance costs.
• Logistics: In-house means setting up tracking and dispatch systems.
• Marketing: Apps provide exposure, but independent marketing is required for in-house.
• Payment Processing: Apps handle it, while in-house delivery requires credit card processing.

Final Thoughts

There’s no one-size-fits-all answer. The right choice depends on your business goals, budget, and customer base. Before making a decision, crunch the numbers and consider what makes the most sense for your restaurant.

Whether you go all-in on in-house delivery or partner with third-party apps, the key is ensuring that customers have a seamless and satisfying experience—because at the end of the day, that’s what keeps them coming back.