Solving Last-Mile Delivery Challenges in Restaurant Food Deliveries

The food delivery industry has seen tremendous growth in recent years, yet it continues to face significant challenges, particularly in last-mile delivery. For many small restaurants, the lack of a proper delivery system or app hampers their ability to efficiently serve customers, leading to delays, order inaccuracies, and poor experiences. Last-mile delivery, the final step from restaurant to customer, is critical, as it directly impacts food quality, delivery times, and customer satisfaction.

Both independent restaurants and multi restaurant aggregators face unique challenges in managing last-mile delivery. Multi restaurant delivery software for aggregators and food ordering systems for single-brand restaurants are key business models for streamlining delivery. However, each model has its own set of challenges when it comes to optimizing operations and minimizing costs.

In this blog, we'll explore the common last-mile delivery challenges faced by both types of businesses and how technology can help overcome these issues. By understanding how to improve last-mile delivery, restaurants can boost customer satisfaction while reducing operational costs.

Ensuring Food Quality in Last-Mile Delivery

Food quality is crucial in the last-mile delivery process, and customers expect a consistently high standard with every order. To maintain this, restaurants must adopt several key practices.

Firstly, proper packaging plays a significant role in preserving food quality during transit. Eco-friendly materials, such as biodegradable containers or recyclable packaging, should be prioritized over traditional plastic or polyethylene covers. This not only helps protect the environment but also ensures the food stays fresh and safe. Using sealed, insulated containers for hot and cold items is essential in maintaining temperature consistency, keeping hot foods warm and cold items cool until they reach the customer.

Additionally, proper packing ensures that food items don’t shift or spill during transit. Restaurants should use secure, well-sealed packaging to prevent leaks or damage to the food, keeping it intact and appetizing.

Finally, the delivery agent’s equipment is just as important. A clean, well-maintained delivery bag, designed for food delivery, helps maintain the quality of the food during the journey. It should be insulated to keep items at the right temperature and spacious enough to avoid squashing the food.

By following these simple yet effective steps, restaurants can ensure that every meal delivered maintains its quality, leaving customers satisfied and encouraging repeat business.

Challenges in Restaurant Order Management

In traditional manual systems, it's all too easy to miss orders, assign the wrong driver, overlook customer instructions, or forget food items—leading to delivery delays, errors, and customer dissatisfaction. The Restaurant Order Management System effectively addresses these common last-mile delivery challenges, particularly when managing multiple orders simultaneously.

Key benefits of using the order management system include:

Efficient Order Management

The system seamlessly processes multiple orders at once, ensuring there are no mismatched food items or toppings. Each order is carefully linked to its corresponding order number, guaranteeing accuracy before it’s handed off to the driver. This ensures smooth, error-free deliveries with the exact food items the customer requested.

Minimized Driver Wait Time

By organizing and prioritizing orders, the system reduces unnecessary wait times for drivers at the restaurant. It helps balance last-mile travel times and ensures faster deliveries.

Automation in Last-Mile Delivery

Auto Dispatch / Auto Assign Driver

In the manual dispatch system, the dispatcher can assign multiple orders to the same driver, but may sometimes overlook assigning orders to available drivers, leading to missed deliveries. In contrast, the auto-dispatch system automatically assigns delivery jobs to the nearest available drivers (on duty with no current jobs), ensuring timely and efficient deliveries without the risk of missed assignments. The system assigns the driver as soon as food preparation begins, ensuring the driver arrives at the pickup location just as the food is ready. This helps minimize driver wait time and reduces delays in picking up food from the restaurant.

Real-Time Delivery Tracking

Customers can track their delivery from the moment the order is placed until the food is delivered. The process is fully transparent, allowing customers to monitor both the order preparation and delivery stages in real time. Additionally, customers can view the driver's estimated arrival time (ETA) and track the driver's real-time location on a map, along with the last-mile delivery route and the driver's movements throughout the journey.

Route Optimization

The system automatically determines the best route for last-mile delivery, from restaurant pickup to the customer's address. It considers factors such as traffic, road conditions, weather, and historical data to optimize the route, ensuring on-time delivery. Additionally, the delivery app provides real-time navigation for the driver, from the restaurant pickup to the customer's location. For multi restaurant deliveries, route optimization and navigation are also essential for the first mile (from the driver's location to the restaurant).

Proof of Delivery

The driver app has features that allow the driver to take photos and upload them, as well as add notes during the delivery. These updates are instantly reflected in the system, where the dispatcher can verify the proof of delivery. Additionally, the delivery app ensures that the driver can only mark the delivery status when within a 100-meter radius of the customer's geo-location. This restriction confirms that the driver delivers only to the customer's designated address.

Communication Challenges with Customers in Last-Mile Delivery

Communication between the customer, restaurant, and driver is critical to resolving common challenges in last-mile food deliveries. Here’s how to address these issues and improve the delivery experience:

Customer to Restaurant Communication:

Customers must be able to contact the restaurant to modify their orders or provide special instructions. An online chat or chatbot-based support system can help customers easily communicate changes.

Restaurant to Customer Communication:

Restaurants need to notify customers about item unavailability or offer replacements. Direct messaging or call options ensure customers are promptly informed and can approve changes.

Driver to Customer Communication:

Clear communication between the driver and customer is vital for accurate location details and delivery timing. Drivers should have the ability to call or message customers directly to confirm the delivery address and route.

Multi-Channel Communication:

The customer app should allow calls or messages to both the restaurant and the driver, enabling easy interaction and quick resolution of any issues.

Push Notifications for Order Updates:

Push notifications should inform customers and restaurants of order status at every step, from order placement to dispatch, and last-mile delivery (e.g., when the order is picked up or nearing delivery).

By integrating these communication features into the food delivery system, businesses can ensure smoother, more efficient last-mile deliveries and reduce delivery issues.

Handling Order Returns, Cancellations, and Customer Unavailability

Proper structure is essential to manage returns, cancellations, and customer unavailability. For single-restaurant deliveries, the return process should be handled directly by the restaurant. In multi restaurant systems, a centralized food hub or business center is needed to manage returned items.

To streamline this, the system should offer online payment only, removing the cash-on-delivery option. The customer app should allow cancellations only before food preparation begins. Once preparation starts, cancellations should be restricted. In cases of valid returns or cancellations, the refund should be credited to the customer's wallet for future orders.

Other Miscellaneous Challenges in Last-Mile Delivery

There are several miscellaneous challenges in last-mile delivery. Here are the key issues that every restaurant and delivery driver needs to address in the delivery process.

Driver's Device Battery Challenges

One of the key challenges in last-mile delivery is managing the driver’s device battery. Drivers rely on their devices for navigation, order tracking, communication, proof of delivery, and payment collection. GPS navigation drains the battery quickly. To mitigate this, drivers should implement the following strategies to ensure proper battery charging:

Portable Power Banks: Providing drivers with portable chargers connected to the vehicle's battery ensures they can keep their devices powered throughout their shift, minimizing downtime and preventing battery-related disruptions.

Battery-Saving Features in Delivery App: The delivery app should integrate a power-saving mode with on/off settings. It should automatically disable certain features when the driver is idle. For example, if a driver isn't assigned to an order, background processes should be turned off to conserve battery.

Charging Stations: Installing charging stations in key locations (like delivery hubs or restaurants) where drivers can briefly charge their devices during breaks can help alleviate this problem.

Restrict Order Assignment on Low Battery: The dispatch app should prevent assigning new orders if the device battery is below 20%. It should also notify the driver with a low battery warning. The system should integrate this feature to check the driver's battery level before assigning orders.

Unpredictable Accidents and Vehicle Breakdowns

Unexpected accidents or vehicle breakdowns are common challenges in last-mile delivery, causing delays, disrupted schedules, and decreased customer satisfaction. Maintaining backup vehicles and drivers, along with ensuring regular vehicle maintenance through periodic reports, can help minimize breakdowns. To prevent accidents, drivers must adhere to road safety guidelines and use safety equipment, such as helmets.

Reducing Last-Mile Delivery Costs

Last-mile delivery challenges can significantly impact a restaurant’s operational costs. On average, restaurants allocate around 10% to 20% of their revenue toward delivery expenses. Additionally, packaging for delivery, including containers, bags, and utensils, can account for 5% to 10% of the order value.

However, there are several strategies restaurants can adopt to reduce delivery costs while maintaining customer satisfaction. Here are some ways to optimize delivery expenses:

Reduce Fuel and Energy Costs

Restaurants should replace fuel-powered vehicles with electric vehicles (EVs). This will help save on fuel and other energy-related expenses. Electric vehicles are environmentally friendly, producing zero carbon emissions, which contribute to a cleaner environment. By switching to EVs, restaurants can reduce costs while making a positive impact on the environment.

Batch Orders

The system should automatically assign batch orders to a driver if they are en route for a delivery. If a new order is placed along the same route, the system should assign it as a batch order, allowing the driver to manage both deliveries on the same route. This reduces delivery costs and minimizes the need for multiple drivers. Manual assignment of batch orders may fail at times, causing delays for one of the orders. The system should calculate the optimal route and automatically assign any orders along the same path as batch deliveries.

Cash Tips for Drivers

The driver will receive additional earnings from customer tips. In the customer app, the tips module should be available in the cart during checkout. Customers can select a predefined tip amount or enter a custom amount in an input box. This tip amount will be added to the total order value, allowing the customer to process the payment. The tip will be an extra earning for the driver, so the restaurant can adjust the driver’s payout and compensate them with the tip amount. This boosts driver motivation and enhances their overall satisfaction.

Avoid Monthly Subscription-Based Software (SaaS)

Monthly subscription-based food delivery software is not suitable for medium and large-scale delivery restaurants. While it may work for small restaurant startups or a few restaurants in a multi restaurant system, it is not ideal for larger multi restaurant food delivery platforms. The high one-time setup cost, combined with ongoing monthly subscription fees, leads to additional expenses. Most companies charge 1% to 3% of the order value as maintenance fees, which can significantly reduce restaurant profits. To overcome this, single-brand restaurants should invest in building their own white-label online food ordering and delivery system, while multi restaurant aggregators should consider building their own multi restaurant platforms for their delivery services. This one-time investment eliminates ongoing fees, ensures a faster return on investment (ROI) within a year, and results in substantial cost savings every month.

Dynamic Delivery Charge Adjustment

The system will automatically increase delivery charges during peak hours, high-order times, and adverse weather conditions (e.g., rain). This helps restaurants boost revenue by capitalizing on increased demand while ensuring timely service.

Driver Welfare and Incentive Programs

Driver sustainability is a significant challenge for restaurants. Restaurants should invest in driver recruitment, training, customer relationship management, and delivery equipment such as bags, devices, and uniforms. If drivers leave, it can negatively impact revenue. To address this, restaurants can implement incentive programs, such as shift-based incentives, order-based incentives, peak-hour delivery bonuses, and holiday delivery bonuses. Additionally, restaurants should prioritize driver welfare by offering benefits like health insurance and birthday gifts. These investments help ensure driver retention and long-term delivery success, ultimately reducing overall costs for the restaurant.

Conclusion

Last-mile delivery in the restaurant industry presents numerous challenges, from maintaining food quality and optimizing routes to addressing communication breakdowns and reducing operational costs. However, with the right systems and strategies in place, these challenges can be efficiently managed, ensuring a smooth delivery experience for both customers and restaurants alike.

How Kopatech Overcomes Last-Mile Delivery Challenges

The Kopatech Multi Restaurant Food Delivery App offers a customized, white-label solution designed to overcome all last-mile delivery challenges, from order placement to successful delivery, while ensuring cost-effective operations. Our platform integrates key features such as real-time tracking, route optimization, automated order management, proof of delivery, and seamless communication between customers, restaurants, and drivers.

Whether you’re looking to optimize your last-mile delivery operations, Kopatech is here to help. Get in touch with us today to discover how our solution can transform your last-mile delivery process and elevate your restaurant delivery service to the next level.