January 2, 2025
As a small restaurant owner, you know your kitchen serves fantastic food, but are you reaching every potential customer?
Many small restaurants that have grown their revenue in recent years have done so by expanding their customer base by using third-party food delivery services, which have become essential partners for restaurants.
Recent data shows that 67% of Canadians regularly order through food delivery apps, and experts project the market will hit CAD 14 billion this year. Moreover, the number of users in the meal delivery market in Canada might increase to reach 22.1m users by 2029.
This guide discusses how third-party food delivery services operate, what they cost, and how they can impact your balance sheets. It covers insights about major platforms like DoorDash and Uber Eats and practical tips for choosing your third-party delivery partner.
Ready to explore how your small or medium-sized business can make the most of third-party food delivery services in 2025?
Let's dive into everything you need to know about effectively choosing and using these services.
Before we consider partnering with third-party delivery services, we must understand how these platforms function.
In short, these third-party food delivery services act as digital intermediaries, connecting your restaurant with hungry customers through user-friendly mobile apps and websites.
The first step for any restaurant is to sign up for third-party delivery services that can deliver their menus and offerings to customers.
When a customer orders through a delivery platform, the system immediately transmits the order details to your restaurant through a dedicated tablet or integrated POS system.
Your kitchen staff receives comprehensive information about each dish, including special instructions and delivery timing requirements.
This streamlined communication ensures accurate order fulfillment and timely preparation.
While your team prepares the order, the delivery platform's sophisticated dispatch system springs into action.
It automatically identifies and assigns your area's most suitable delivery driver, considering factors like current location and delivery route efficiency.
This automated matching process helps minimize delivery times and maintains food quality standards.
This is how a third-party delivery service becomes the bridge between you and your customers, fulfilling their orders.
Just putting yourself up on a third-party delivery platform isn’t enough. You have to compete with other restaurants and elevate the customer experience.
Success on delivery platforms heavily depends on your digital storefront presentation. When customers open these apps, they're greeted by an immersive display of your restaurant's offerings.
High-resolution photos showcase your dishes in their best light, while detailed descriptions help customers make informed choices.
Current prices, daily specials, and real-time availability updates inform customers and prevent ordering disappointments. The platform displays estimated delivery times based on your kitchen's preparation speeds and current delivery conditions.
Customer ratings and reviews provide social proof, while special promotions help attract new customers and encourage repeat orders.
This digital representation of your restaurant becomes a crucial touchpoint in building customer trust and driving sales.
The next thing that plays a major role in food delivery is the delivery network.
Behind every successful delivery lies a complex network of independent drivers who power these platforms. The system employs advanced algorithms to orchestrate seamless delivery experiences.
These algorithms consider multiple factors simultaneously:
The technology ensures drivers arrive at your restaurant just as orders are ready, minimizing wait times and maintaining food temperature.
Real-time tracking keeps customers informed throughout the process, from order confirmation to doorstep delivery. This transparency helps manage customer expectations and reduces support inquiries.
While primary delivery services offer extensive driver networks, many Canadian restaurants are discovering the advantages of hybrid approaches.
Combining traditional third-party delivery with dedicated delivery-as-a-service solutions from solution providers like iOrders gives restaurants greater control over their delivery operations.
This flexibility allows businesses to optimize delivery costs while maintaining consistent service quality across all orders.
As we discuss the benefits of these services in detail ahead, you will see how picking the right features at the right cost can help your restaurant thrive.
Partnering with delivery platforms opens doors to new opportunities and operational advantages for small and medium-sized restaurants.
Here's how these services can boost your business in meaningful ways.
Third-party delivery services instantly connect your restaurant to thousands of potential customers. Your restaurant appears alongside major brands in popular delivery apps, giving you the visibility you might need help to achieve.
This digital presence helps you reach customers who might have yet to discover your restaurant through traditional channels.
For example, a downtown Toronto restaurant can now serve customers in suburban areas without investing in extensive marketing.
The next benefit is the operational efficiency.
These platforms handle delivery logistics, from order processing to customer service. Thus, you can focus on what you do best: creating excellent food.
The built-in delivery infrastructure eliminates the need to hire, train, and manage your delivery staff. You won't need to worry about delivery insurance, vehicle maintenance, or route optimization.
Hence, you save a lot of money against a percentage of the commission that you pay.
Then comes the data, the new gold of today’s economy.
Most delivery platforms provide detailed analytics about your customer’s ordering patterns. You can see which dishes are most prevalent during specific times, track customer feedback, and identify peak ordering hours.
These insights help you make informed decisions about menu offerings, pricing, and staffing levels.
For instance, if you notice a surge in lunch orders from nearby offices, you can adjust your prep schedule to handle the rush more efficiently.
Delivery platforms offer built-in promotional tools that can help drive sales during slow periods. You can run time-limited discounts, create combo deals, or participate in platform-wide promotions.
These marketing opportunities come with the added benefit of the platform's extensive user base.
However, it's worth noting that while these tools can boost short-term sales, building direct relationships with customers often proves more valuable for long-term success.
The next benefit of these third-party delivery platforms is that you get to try out new markets quickly.
Third-party delivery services allow you to test new markets without significant upfront investment. You can experiment with delivery-only menu items or launch a virtual kitchen concept.
This flexibility lets you adapt to changing market conditions and customer preferences without committing to expensive infrastructure.
However, smart restaurants are increasingly adopting a balanced approach.
While using delivery platforms to reach new customers, many also implement online ordering systems from providers like iOrders.
Moreover, these solutions also offer commission-free ordering solutions that can significantly impact your bottom line when combined strategically with third-party services.
This hybrid strategy helps maintain better profit margins on direct orders while benefiting from the platforms' broad reach.
Third-party delivery services are undoubtedly beneficial. Now, let's introduce popular delivery platforms for 2025 that have helped many SMBs grow their restaurant businesses.
Understanding what each platform offers is essential when choosing a delivery partner for your restaurant.
Here's an overview of the major players in the Canadian market and their distinctive features.
iOrders delivers a comprehensive digital ecosystem designed to optimize restaurant operations. It provides restaurants with a fully integrated solution that maximizes operational efficiency and customer engagement.
You get a platform that goes beyond traditional ordering solutions by creating a white-labeled digital ecosystem that feels like a natural extension of your restaurant's brand.
iOrders provides:
Your restaurant gets a customizable online platform that enables customers to browse menus, place orders, and pay digitally through responsive websites and contactless QR code scanning.
Customers enjoy an easy-to-navigate and intuitive user experience that showcases high-resolution product images accompanied by detailed descriptions.
The platform empowers users to customize their orders with special instructions and supports multiple payment gateway integrations, ensuring a flexible and convenient ordering process for restaurants and their customers.
Delivery-as-a-Service: Offer your choice of payments and commission-free delivery service. It equips your restaurants with a comprehensive delivery solution featuring intelligent driver routing, real-time tracking, and GPS-enabled driver management.
Through real-time driver tracking and intelligent routing algorithms, the platform optimizes delivery paths to enhance efficiency and accuracy.
The system generates precise estimated delivery time calculations, ensuring customers have accurate expectations.
Moreover, you also have multiple delivery options and integrated communication tools that optimize the entire delivery process from order placement to customer receipt.
White-label, Native Mobile App: Guests can place an order for dine-in, pickup, or delivery and pay in one easy flow right on the phone screen.
It allows restaurants to create a branded mobile ordering experience with features like custom branding, user accounts, loyalty programs, push notifications, and seamless menu customization for iOS and Android platforms.
Their comprehensive restaurant management platform allows you to grow your business on your terms.
These services are designed to be flexible, scalable, and easily integrated into existing restaurant operations. They provide a complete digital ordering ecosystem that can be tailored to individual business needs.
With such integrated services, you can maintain a presence on major delivery apps while directing loyal customers to their online ordering systems.
DoorDash has become dominant in Canadian food delivery, particularly in major urban centers. Depending on your chosen service tier, their commission structure typically ranges from 15% to 30%.
DoorDash has rapidly gained market share in Canada, especially in urban areas. It's one of the major players in the Canadian food delivery market.
The platform offers three partnership levels:
DoorDash's self-delivery option lets restaurants use their drivers while still accessing the platform's customer base.
This feature works particularly well for restaurants with in-house delivery staff or wanting more control over the delivery experience.
Uber Eats stands out for its extensive driver network and sophisticated logistics system. Uber Eats has a significant market share in Canada, particularly in urban areas.
It benefits from Uber's existing infrastructure and customer base, allowing it to expand its food delivery services quickly.
Similar to other platforms, Uber Eats’s commission rates typically range from 15% to 30% of the order total.
Their pricing structure includes:
Postmates recently merged with their platform, expanding their reach and offering restaurants access to a broader customer base.
They excel in data analytics, providing detailed insights about customer behavior and ordering patterns.
As a Canadian-born platform, Skip The Dishes understands the unique needs of local restaurants.
Commission rates can vary widely but typically range from 15% to 30% of the order total. Factors influencing the rate include restaurant location, order volume, and contract negotiations.
SkipTheDishes offers:
Their strong presence in medium-sized cities and suburban areas makes them particularly valuable for restaurants in these locations.
SkipTheDishes wins on its user-friendly mobile app and website. They focus on local restaurants and community partnerships.
GrubHub's strength lies in its marketing tools and flexible service plans. It has a smaller market share in Canada compared to SkipTheDishes, DoorDash, and Uber Eats. However, it has a strong presence in specific regions and a loyal customer base.
GrubHub's commission rates typically range from 15% to 30% of the order total.
GrubHub provides:
Their platform emphasizes customer retention through personalized marketing campaigns and special offers.
Instacart is primarily known for grocery delivery. Recently, it expanded its services to include restaurant delivery. This partnership with Uber Eats allows customers to order food from various restaurants directly through the Instacart app.
Instacart's commission structure is complex and can vary depending on factors like the retailer, the service used (delivery or pickup), and the specific agreement.
It charges a percentage fee to the retailer for each order, and shoppers earn a portion of the order total as a tip.
Instacart's restaurant delivery service offers:
Their platform particularly suits restaurants selling prepared meals or specialty food items.
When selecting your delivery partners, you have to be vigilant about a few things. The following section highlights the factors you need to consider while choosing the right third-party delivery service for your restaurant.
Selecting the ideal delivery partner for your restaurant requires careful consideration of several vital factors because they directly impact your operations, profitability, and customer satisfaction.
Before signing any agreements, thoroughly examine each platform's presence in your area. A delivery service might be popular nationally, but local market penetration matters most. Check their coverage maps and driver availability in your specific location.
For example, while DoorDash might dominate downtown Vancouver, Skip The Dishes could have better coverage in suburban areas.
Then comes the cost structure because it directly affects your pockets.
Understanding the complete financial picture goes beyond introductory commission rates. The base commission rate often ranges from 15% to 35%, but that's the starting point.
You must factor in payment processing fees, marketing costs, and potential promotional expenses. Calculate your break-even point by considering your food costs, overhead, and desired profit margin.
Some restaurants adjust their delivery menu prices to offset these costs while maintaining profitability.
With iOrders Commission-free delivery service, restaurants maintain their prices without hindering their profitability and increasing the base of satisfied customers.
Next on the list is service performance.
Research each platform's reliability in your area by:
Remember that consistent delivery times and proper food handling directly impact your restaurant's reputation, regardless of who delivers.
Integration capabilities are next on the list.
Your delivery partner should seamlessly connect with your existing POS systems.
Consider how each platform:
Poor integration can lead to order errors and operational headaches that cost time and money.
Last but not least is the impact on your revenues and cash flows.
Beyond looking at commission rates, analyze potential revenue generation by:
Combining third-party delivery services with their online ordering system like iOrders offers the best of both worlds.
This hybrid approach lets them use delivery platforms for customer acquisition while maintaining higher margins on direct orders through commission-free solutions.
For example, you can do it by using third-party platforms during peak times to reach new neighborhoods and encouraging your loyal customers to order directly through your website or branded app.
This strategy helps build customer loyalty while maximizing profitability across all orders.
In the next section, we will explore common challenges with third-party delivery services. This will help you better understand how to protect your business while maximizing the benefits of these partnerships.
Running a successful restaurant means facing challenges head-on. While third-party delivery services can boost your business, they come with their own set of hurdles.
Here's what you should watch out for:
Your restaurant's reputation is everything. When you work with third-party delivery services, you place part of your brand experience in someone else's hands.
This means your perfectly plated dishes might look different after a 20-minute delivery ride. Plus, your restaurant appears alongside dozens of competitors on delivery apps, potentially diminishing your unique brand identity.
Let's discuss numbers, as they matter for every business. Third-party delivery services can significantly reduce your profits.
Here is how:
Take control of finances in your hands and consider iOrders commission-free online ordering system to maintain healthier profit margins while offering delivery options to your customers.
Managing deliveries adds another layer of complexity to your daily operations:
Third-party delivery services present significant challenges, but with the right strategy and tools, you can minimize their impact on your business.
The key is finding the right balance between using these services and maintaining direct control over customer relationships.
Now that we are aware of the challenges of using third-party delivery platforms let’s understand the legal and compliance considerations a restaurant must consider while using them.
Entering the world of third-party delivery services means navigating various legal requirements and compliance standards.
As a restaurant owner, understanding these obligations helps protect your business and ensures smooth operations.
Operating in Canada means adhering to strict data protection laws, particularly PIPEDA (Personal Information Protection and Electronic Documents Act).
This legislation affects how you collect, store, and handle customer information through delivery platforms.
You need to understand precisely who owns customer data when orders come through these services - is it your restaurant, the delivery platform, or is it shared?
This distinction becomes crucial when handling customer disputes or building your marketing database.
Liability issues also require careful consideration. If a customer gets sick from your food, who bears responsibility - your restaurant or the delivery service? What happens if the food arrives damaged or at an unsafe temperature?
These scenarios demand clear guidelines in your service agreements. Some delivery platforms offer liability protection, while others entirely burden the restaurant.
Each municipality in Canada has its own set of regulations governing food delivery services. Your local health department likely has specific guidelines about food temperature control during transport and packaging requirements for delivered meals.
Some cities require special permits for food delivery operations, adding another layer of compliance to consider.
Food safety regulations don't stop at your restaurant's door. You must ensure that delivery partners maintain proper food handling standards throughout delivery.
This includes appropriate vehicle cleanliness, adequate food storage during transport, and temperature maintenance for hot and cold items.
Service agreements with delivery platforms can be complex. In addition to commission rates, these contracts often include clauses about exclusive partnerships, marketing requirements, and dispute resolution procedures.
You'll need to understand cancellation policies and notice periods. Some platforms require significant advance notice before terminating services.
Tax considerations add another layer of complexity. GST/HST applications vary depending on how the delivery service structures its fees.
Some platforms include tax in their displayed prices, while others add it separately. You'll need to account for these transactions in your books properly and ensure compliance with tax reporting requirements.
In this guide, we have explored almost everything in detail about the third-party delivery options for restaurants and how to choose the one that suits your needs.
It’s time to wrap up things.
Making the right delivery service choices can significantly impact your restaurant's success in today's digital-first world.
While third-party delivery platforms offer immediate access to a broader customer base, they also come with challenges that affect your profits and operations. The key is finding the perfect balance that works for your business.
As a restaurant owner, you must consider your profit margins, operational capacity, brand identity, and, most importantly, your long-term growth strategy.
Each delivery option - third-party platforms or in-house delivery - has its place in the market. The best approach often combines different solutions to maximize benefits while minimizing drawbacks.
Remember, the right delivery strategy isn't about following trends - it's about making smart choices that support your restaurant's growth and success.
This is where iOrders steps in as your strategic partner. Their comprehensive restaurant management platform allows you to grow your business on your terms.
iOrders work beyond just delivery.
Tired of sharing your profits with third-party delivery services?
Sign up with iOrders today and keep more of your hard-earned money.
