Top Third-Party Delivery Services For SMBs In 2024

If you’re a small business (SMB), you’ve probably noticed that customer demand for deliveries isn’t going away. Since the pandemic, more and more people now expect:

• Grocery delivery to their doorstep.
• Meal delivery services that will ship premade meals to their home or office.
• Having their restaurant and takeout food delivered, rather than going out to eat.

All in all, fast casual and fast food delivery was up over 11% year-over-year in January 2023. And looking ahead to the next few years, online food delivery services are expected to grow at an annual rate of 13% through 2027, with market volume expected to hit US$1.65 trillion. 

Food and groceries may be the most in-demand products for local delivery, but every business is affected. Flowers, alcohol, prescription medicines, hobby supplies, plants, workout gear, cleaning supplies — you name it, people want it delivered. 

For local SMBs who want to increase market share and don’t yet have delivery services in place, that means it’s decision time. To attract new customers and maintain your current customer base, you must offer either your own in-house delivery service, or partner with third-party delivery companies. 

In this article we’ll explore how third-party food delivery services work, consider some of the most popular options, and finally explain the basics of third-party logistics. 

How do third party delivery services work?

Most third party delivery services work in similar ways:

• Customers download the provider’s app, which they use to place orders at a restaurant or store.
• The platform’s ordering system sends these orders to your business through a mobile device or your POS system.
• You connect with local delivery drivers who will handle your deliveries.

In exchange for simplifying the ordering and delivery process, these providers charge commission fees. Customers also pay a delivery fee, and a tip to the driver.

Business owners do have some flexibility when working with these service providers. If you want to use your own delivery drivers or accept pickup orders, you may have the option to use just the platform’s ordering system.

Third party delivery services do have many benefits, but which one should you choose? Here’s our pick of the options:

Top third party delivery services for 2024

Roadie

Roadie is a UPS company that aims to crowdsource the delivery process. The platform’s footprint includes 90% of American households, from New York City to Los Angeles. Same-day delivery services are available, but they may not be as fast as DoorDash or other companies for timely food delivery.

Roadie may be a good option if you prep meal kits or deliver produce to restaurants.

Customers must contact sales for more information, but according to their website they offer:

• Batched routes for streamlined, high-volume deliveries
• 2-hour delivery in select locations
• Same-day delivery in a 100-mile radius

Catering delivery options are available, with 5-9 small deliveries within a five-mile radius estimated to cost $11 per delivery. Roadie says businesses can save as much as 25% on delivery costs by sending 5+ deliveries daily.

Larger volumes of shipments help reduce the cost per delivery.

The volume options available are:

• 5-9  
• 10-19
• 20-39
• 40-79
• 80-99
• 100+ deliveries per day

Small businesses can scale operations with Roadie and the help of UPS’ optimized delivery system.

GoShare

GoShare’s website and mobile app help businesses deliver virtually anything from small parcels to large boxes. Companies can:

• Get a free shipping estimate in the app
• Set their pickup time
• Set a location
• Find a delivery professional to work with

Businesses benefit from an upfront pricing algorithm that helps them save up to 50% on delivery and provides drivers with fair compensation. Scheduling is available seven days a week from 5 am-11:30 pm.

Multiple delivery options are available:

• LTL
• Hot Shot
• Middle Mile
• Last Mile

DoorDash

DoorDash is rated 3 out of 5 stars by merchants and helps many expand their customer reach with online food delivery. Since 2013, the company has been responsible for $100 billion in merchant sales. You can add your business to the platform under multiple commission rates, depending on the level of in-app marketing you want:

• 15%
• 25%
• 30%

If customers opt to come into local restaurants to pick up their food rather than dine-in, the commission is 6% for all orders.

If you have a restaurant delivery service and want to list your restaurant on the app, you can use the Self-Delivery tier. Prices on this tier are lower and open the door to marketing on DoorDash. 

Don’t have an online ordering system?

DoorDash’s Storefront has 0% commissions and makes it easy for restaurant owners to add an online store to their website. You’ll pay standard debit and credit card processing fees.

Instacart

You’re probably very familiar with Instacart if you have a grocery business. But the platform also serves e-commerce businesses, retailers, convenience stores, and restaurants.

Along with third party delivery services, they offer:

• End-to-end fulfillment 
• In-store shopping options
• Advertising tools
• Analytics 
• Loyalty programs
• More

While Instacart is a well-known platform and a convenient option, they aren’t transparent about fees and pricing for merchants. You’ll need to contact them for more information on this front.

However, they do provide businesses with a wealth of tools to manage orders and deliveries, market their brands, and more. 

How well do users rate Instacart? The platform gets 4 out of 5 stars on G2.

GrubHub

GrubHub is a well-known third party delivery platform that offers more than just delivery services. The platform also empowers restaurants to market and promote their business through promotional tools and a branded ordering website.

GrubHub is part of the Just Eat Takeaway.com family, which has more than 365,000 restaurant partners.

Basic

• Rates starting at 5%
• Zero maintenance fees
• Branded ordering website
• Professional menu photoshoot (free)

Plus

• Rates starting at 10%
• All of the features of the Basic plan
• Access to Grubhub+ customers

Premium

• Rates starting at 15%
• All of the features in the Plus plan
• Access to loyalty and promotion tools
• The option to respond to reviews

GrubHub’s fees are mid-range, but you get access to a large customer base – more than 31 million active users.

What do users have to say about GrubHub? The platform has a rating of 4 out of 5 stars on G2.

Uber Eats for Merchants/Postmates

Uber Eats is one of the most well-known third party delivery services. In 2020, they acquired Postmates, further expanding their 3PL market share. Today, the platform is used by more than 825,000 businesses. 

While most people associate this platform with food delivery, Uber Eats for Merchants serves a variety of businesses, including:

• Grocery stores
• Retailers
• Conveniences stores
• Pet stores
• Flower shops
• Liquor stores

Their platform connects your business with independent drivers, scooter riders, bikers, or even walkers who will take care of your deliveries for you.

Uber Eats for Merchants has a variety of pricing options for businesses, making their service more accessible. 

Here’s a breakdown of their pricing plans:

Lite

• 15% fee for deliveries
• 6% for pickup orders

Plus

• 25% fee for deliveries
• 6% for pickup orders

Premium

• 30% fee for deliveries
• 6% fee for pickup orders

Self-Delivery (use your own delivery staff)

• 15% fee for deliveries
• 6% fee for pickup orders

Uber Eats does charge hefty fees, but their app has about 85 million users. Each plan makes your restaurant discoverable in the Uber Eats app, so it’s an opportunity to greatly expand your reach. 

How do users feel about Uber Eats? The platform is rated 4 out of 5 stars on G2.

Which third-party delivery service is right for you?

All the services and apps we’ve listed above are well established, and highly regarded. The right choice for any business depends on its own unique circumstances. Here are some of the questions to ask before making a decision:

Does this work for me geographically?

Some delivery services have geographic limitations. For example, DoorDash only operates in North America. Check which service is best suited to your country, region, city or even neighborhood.

How does the cost structure fit with my business?

Some services charge a flat fee per delivery, while others take a percentage of the order total. Look for the option that will help you preserve your profit margins.

How fast and how reliable is this service?

Match the service to your market: Restaurant customers probably want delivery within half an hour, grocery customers may be happy to wait a few hours or even overnight. Check reviews and talk to your peers for recommendations. 

Does this work with my existing systems?

Seamless technology integration saves many sleepless nights. Consider how easily the service integrates with your existing systems, like point-of-sale or inventory management systems. 

How much flexibility do I need?

Do you need to offer custom delivery time windows? Order tracking? Proof of delivery? Make a list of which features are dealbreakers for you, which are nice-to-haves, and which are irrelevant.

Now that we’ve looked at individual delivery services, let’s take a deeper look at some background — you’re welcome to skip this if you just came for the reviews!

What is third-party logistics (3PL)?

Broadly, third-party logistics (3PL) means outsourcing logistics and supply chain functions like warehousing, order fulfillment and last mile delivery to specialized service providers. These are all complex operations, and for many businesses it makes sense to focus on what they do best, while letting an expert 3PL provider handle the logistics. 

The restaurant industry, for example, is organized around making food, not transporting it across town. Building up a fleet of delivery drivers or managing an in-house logistic system seldom makes sense, which is why many restaurants use Uber Eats or similar food delivery apps to manage their online ordering and deliveries.

A 3PL can be a network of:

• Individuals fulfilling orders for third-party delivery apps
• Fleets that partner with you for delivery

What are the pros of 3PL?

• Quick market entry: No need to build a delivery infrastructure from scratch, and no upfront capital requirement. You can get into the delivery market almost immediately, and scale up easily as delivery orders increase.
• Reduced overhead: No need to hire, train, and manage drivers, or maintain a vehicle fleet. This can be especially beneficial for small businesses with limited resources.
• Increased exposure: Being listed on popular platforms can introduce your business to a wider audience.
• Flexible options: Many services offer different commission tiers and services, allowing you to choose what fits your business best.
• Data insights: These platforms often provide valuable customer data that can help you tailor your offerings and marketing strategies.

Some providers, such as GrubHub, provide the entire ordering system for you. Customers can order food in minutes with a seamless process that transitions from your restaurant’s website to the 3PL backend. 

Disadvantages of third-party delivery

You can grow your own delivery service more easily using third party-delivery services, but there are downsides. Customers recognize this — in one survey, 70% said they’d rather order from a restaurant or food service directly, so that their money doesn’t go to middlemen.

• Loss of control: You have less control over the customer experience, from the time an order is placed to when it's delivered. But if drivers are unprofessional, a delivery arrives late or something is missing from an order, it’s your reputation that is at stake and you risk losing some of your customer base. You can make the best food, but if it arrives cold everyone will be unhappy. Without insight into the problems, it’s also hard to help your customers out.  
• Commission fees hurt profit margins. It's crucial to understand the fee structure and how it impacts your bottom line. In 2022, restaurant prices in the US rose 8.8%, so there’s not much room to pass delivery costs on to consumers. So for many businesses, their profit margins will shrink — will the increased turnover make it worthwhile.
• Brand dilution: Your brand is one among many on these platforms, which can make it harder to stand out. After all, the platform is promoting your competitors just as hard as it’s promoting you.
• Loss of customer loyalty: Customers may develop loyalty to the delivery platform rather than to your business. 
• Operational challenges: Managing orders from multiple platforms can become complex and may require additional software or staffing.

Legal and compliance issues with 3PL

Finally, there are some legal issues to be aware of:

• Data privacy: Make sure you understand who owns the customer data collected through the platform and what you're allowed to do with it.
• Liability: Who is responsible if an order is late, incorrect, or damaged? Make sure this is clearly outlined in your agreement with the service.
• Compliance with local laws: Different countries, or even cities, may have specific regulations around food delivery, especially concerning health and safety. Make sure both you and your third-party service are in compliance.
• Contractual obligations: Read the fine print. Some platforms may have non-compete clauses or other restrictions that could limit your flexibility.
• Payment terms: Understand when and how you will be paid, as well as any fees that may be deducted.‍
• Tax implications: Sales tax, VAT, or other local taxes may apply differently when using a third-party service. Consult a tax advisor to ensure you're in compliance.

By weighing the pros and cons and being aware of legal and compliance issues, you can make an informed decision about whether third-party delivery services are the right choice for your business.