High fees are spurring independent restaurants to explore homegrown delivery options.
Seeking to stay busy after retiring from a career in nonprofit health-care management, Jon Sewell opened a calzone shop in Iowa City, Iowa. After eight years in the business, he can tell you all about the joys of plying college kids with late-night cheesy goodness—and even more about the downsides of delivery apps such as Grubhub, which doubled the commissions it charges restaurants to 30% after it acquired a competitor that Sewell worked with. “If the true cost of the delivery service was borne by the customer, they’d never do it,” Sewell says.
In response, drawing on his experience persuading rival hospitals to cooperate, Sewell started Chomp, a delivery service that now works with almost 200 restaurants in Iowa City and nearby Cedar Rapids. Restaurants pay commissions of 15%, and drivers earn an average of almost $20 an hour. After Chomp gained traction, friends in Fort Collins, Colo., asked for help setting up a similar service called Nosh.
Last year, seeking to build on those successes, Sewell created LoCo Co-ops, a company that sells technology and know-how to restaurants interested in establishing delivery cooperatives. LoCo operates in Las Vegas, Omaha, and Knoxville, Tenn., with three more cities in the works. “There’s nothing that DoorDash, Grubhub, and Uber Eats do that can’t be replicated locally and operated at a much lower cost,” Sewell says. “There’s no need to send all this money to a bunch of venture capital-backed firms in California and Chicago who managed to figure out how to get between restaurants and their customers.”