Look out, DoorDash: Local meal delivery companies are teaming up

DoorDash, Uber Eats, and Grubhub have become synonymous with on-demand restaurant delivery. DoorDash alone accounts for 59% of U.S. business; Uber Eats has 24% and Grubhub 14%. But the big three have at least 550 competitors: small companies that cover a town or a segment of a state, such as GrubSouth in Alabama, Meals Now in Arkansas, Phoodiis in Tennessee, and Takeout Central in North Carolina.

With smaller companies having nowhere near the name recognition of DoorDash, or even Caviar (now owned by DoorDash) or Postmates (part of Uber), it’s hard for hungry customers to know who their local provider is—or that they even have one. Most locals do have apps, but they don’t have major advertising budgets or prominent placement in Google search results.

So, now these companies are uniting into a nationwide effort called LocalDelivery, with iPhone and Android apps and a website that provide national coverage, providing an experience more like that of meal delivery’s giants. When users open the app or go to the site, they’ll be paired with the nearest delivery service, or services.

“When they’re spending with us, the money is staying local,” says Chintan Patel, the owner of Meals Now, which he founded in 2019–about six months before the national providers came to town. “When you’re spending money with these big publicly traded companies, everybody else is benefiting except the community.”

LocalDelivery app and website
The new LocalDelivery app and website provide a national gateway to local services. [Photo: RMDA]

Smaller companies also claim they can provide better customer service than the nationals. “Typically, when you have a locally operated delivery service, there’s local ownership of any issue that happens,” says Andrew Simmons, CEO of OrangeCrate, a San Diego-based company that serves 39 U.S. cities. He claims that local companies are able to respond personally to complaints from customers or restaurants, and that their close ties to restaurant owners enable better communication.

Simmons serves as president of the Restaurant Marketing and Delivery Association (RMDA), a trade group of about 550 local food delivery companies in the U.S. that was founded in 1990, when hungry people ordered meals via landline phone, not an app. Together, these companies do about $550 million in business annually.


The RMDA is spearheading the LocalDelivery program, but the idea came from Zuppler, an online ordering technology provider that built the LocalDelivery site and apps. The idea literally came in a dream to the company’s chief revenue officer Ed Barrett about eight months ago, recounts Zuppler founder and CEO Shiva Srinivasan. “You’ve got local marketplaces, and then you’ve got one combined national portal that can rival a DoorDash,” says Srinivasan. “You’re talking about potentially adding about 65,000 restaurants in this national portal.”

That’s still far from DoorDash, however, which offers about 500,000 restaurants. (Grubhub has 320,000.) However, many of these are chain restaurants, such as McDonald’s and Wendy’s. Local delivery companies say they don’t have the clout to negotiate deals with national chains, but the RMDA is hoping that, as a united front, it can close such national deals for its membership. (Some smaller companies will pick up orders at chain restaurants, even though they don’t have a formal business relationship.)

LocalDelivery has a way to go to reach Srinivasan’s goal. Zuppler currently has about 8,000 restaurants in its system, the bulk of them in the U.S. Srinivasan hopes to onboard about 3,000-4,000 restaurants per month. And the service isn’t up and running just yet: The RMDA is previewing the app at its national conference on April 25, but it hasn’t yet set a launch date for the iOS App Store and Google Play.

LocalDelivery app
The LocalDelivery app will be available on Android and iOS. [Photo: RMDA]

For now, diners looking for a hometown option can visit the website and enter their ZIP code to be paired with a provider. I entered my code for Asheville, NC and was sent to the website for Takeout Central, which serves my city and seven others in the state. (However, I did not get any information about Kickback AVL, another Asheville delivery company.)


Local providers stake the moral high ground in the food delivery wars. In addition to keeping money in the community, they claim to offer better terms for restaurants. Meals Now, for instance, charges restaurants just a 10% fee on the cost of the order. Phoodiis charges 15%.

If you order from Grubhub’s app or website, the restaurant will pay a marketing fee of about 5 to 15%, plus a delivery fee of 10%, says the company. So, the hit could potentially be higher. DoorDash and Uber each have tiered programs for restaurants that start at 15%.

Are the prices any better for customers? Not necessarily. Meals Now, for instance, charges customers a 10% delivery fee. Phoodiis charges a 10% service fee, plus a delivery fee ranging from 50 cents to $10, depending on distance. “We have some customers that live out in the boonies,” says owner Jeff Sasse, who’s also treasurer of the RMDA. And drivers won’t make decent money if customers don’t tip generously.


ORANGECRATE CEO ANDREW SIMMONSI placed an order in Asheville with Luella’s Bar-B-Que (pulled chicken with fried okra and mac ‘n’ cheese) on a Sunday mid-afternoon from both DoorDash and Takeout Central. The base price for each was $12.45. For delivery with DoorDash, I paid a total of $22.16; with Takeout Central, it was $22.64. In each case, I accepted the recommended default tip: $3.50 with DoorDash and 20% ($3.46) with Takeout Central. Each delivered in just under half an hour. In essence, the services were identical.

“I think the consumer nowadays, most of them, realize that this is a luxury service,” says Simmons. “It does get rather expensive, but it’s the same expensive you’re going to have with DoorDash, Uber Eats, and Grubhub, as well.”

And what about the drivers? Is going local any better for them? That’s hard to tell, as pay estimates vary. Across the RMDA membership, drivers’ earnings range from $18 to $40 per hour, including tips, says Simmons. Chintan Patel estimates a broad range of $17.50 to $36, during rush hour, for Meals Now drivers. Sasse estimates $18-$20 per hour for Phoodiis. In a brand-new report, DoorDash says that drivers average $25 per hour across all the countries it operates in.

Local delivery drivers do tend to stick around, say the companies, which may be a sign that they are happy with the deal. “I have a lot of drivers who have been with me since the beginning,” says Sasse, who founded Phoodiis in 2017.


Whatever locals charge restaurants and pay drivers has to be sustainable in the short term: Small companies don’t have the luxury of subsidizing their business with VC money. DoorDash, in contrast, could afford to lose $468 million in 2021. Uber lost $496 million last year, although it doesn’t break out the numbers for its ride-sharing versus delivery sides.

In comparison, almost all RMDA members are in the black, says Simmons. “We were profitable within about two months of operation,” says Sasse, noting that Phoodiis balance sheet has continued to improve over the years. Patel says that he was profitable on “day one.”

And Phoodiis has developed good name recognition in its community. About 30% of its business comes from people who have taken the time to find and download the Phoodiis app. So, they aren’t just stumbling across the company on a web search. (OrangeCrate gets 68% of business through its app.) Sasse even credits the national companies with raising awareness of food delivery in his communities, saying that his volume increased after they came to town.

But it hasn’t all been bright. In 2019, competition from the national players caused North-Carolina based Takeout Central to close operations in Knoxville, Tenn. That same year, New Jersey-based Delivery Now pulled out of two counties in New York state.

However well business is going for local companies, they hope that forming a united front will allow them to grow much more–by reaching a larger audience and gaining the clout to deal with national restaurant chains. After all, their combined businesses are still just about 3% of the burgeoning food delivery industry in the U.S.

“As a group, LocalDelivery can really move the needle as one entity, because there’s 550 CEOs supporting it, and we can really compete with the big boys,” says Patel. “If we stack our technology, I think we can compete with anybody that’s out there.”


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