Copyright © 2020 Albuquerque Journal
As restaurants scramble to offer online ordering and delivery in the coronavirus lockdown, most are relying on third-party providers such as Uber Eats to deliver food, but Lavu Inc. says it has a much cheaper alternative that virtually eliminates the middlemen.
The Albuquerque startup is known for its point-of-sale software system that allows restaurants to manage internal operations online. But with the pandemic now forcing all food services into takeout and delivery, Lavu has pivoted to focus almost exclusively on deploying its MenuDrive platform, which permits food establishments to almost instantaneously begin online ordering and delivery free of charge, with only a 4.5% commission that includes delivery service by a partner company. That commission is paid by the restaurant only when a customer sale is made.
Third-party providers generally charge much more, sometimes up to 40% of a sale for delivery service, and they usually manage the entire online system themselves, marginalizing a restaurant’s ability to have direct contact or follow-up with customers.
Until now, the Albuquerque restaurant chain Twisters used Uber Eats and Grubhub for online services. Last week, it installed MenuDrive at all its locations, said Twisters Chief Financial Officer and Business Director Saagar Grover.
“MenuDrive gives us full control over the customer business and experience,” Grover told the Journal. “With third-party providers, our sales continued in the coronavirus, but it’s much less profitable. The providers send us an order, their driver picks up the food, and we don’t even know who the customer is.”
That’s a problem because restaurants like Twisters want to establish direct relations to build a loyal online following.
“We want those connections and tracking points on customer ordering patterns and history,” Grover said. “Capturing and customizing that data is a huge opportunity that’s become a front-line priority for us in the coronavirus.”
Lavu already has point-of-service system customers in about 100 countries, but coronavirus forced it to refocus its marketing efforts on MenuDrive, said Lavu CEO Saleem Khatri.
“There’s about 900,000 restaurants in the U.S., and the overwhelming majority don’t have online ordering, so they use third-party providers that charge high commissions,” Khatri said. “We can now offer online service at a fraction of the cost. … We don’t charge any installation or monthly fees, just 4.5% when there’s an order, so we only make money when the restaurant makes money.”
Lavu uses a national partner for fixed-price, commission-free deliveries, which is included in the 4.5% customer sales fee that restaurants pay.
MenuDrive, a Pennsylvania startup Lavu acquired last year, is now adding self-service options for restaurants to install the system themselves in minutes, plus new marketing tools to build customer relations.
Restaurants have been hammered during the coronavirus pandemic, with sales down an average of 30% nationwide in March, Khatri said. But restaurants using MenuDrive actually reported that March sales climbed by 147% compared with average monthly sales in 2019, he said.