Bite Squad, the Minneapolis-based restaurant delivery service, expanded into the western Twin Cities suburbs Tuesday.
Nearly 130,000 households in Maple Grove, Minnetonka, Plymouth and Eden Prairie will now be served. Right now, the company delivers to Minneapolis’ downtown and Uptown neighborhoods; St. Paul; and parts of several first-ring suburbs including St. Louis Park, Richfield and Bloomington.
“This is the largest and most specific expansion we’ve had,” said Kian Salehi, co-founder and chief executive of Bite Squad.
The company expanded into 20 cities nationwide last year on top of five markets where it already had service.
Bite Squad delivers orders from more than 400 restaurants in the Twin Cities. Nearly 100 more are being added with the western expansion, including BLVD Kitchen, Peoples Organic, Buca Di Beppo and R Taco.
The service was one of the first to offer real-time delivery technology similar to Uber’s, so customers can track the driver’s progress to their home or office. Customers also receive e-mails or texts to pinpoint the precise arrival time of the food.
Most orders usually arrive within 40 minutes of ordering, Salehi said.
Salehi founded the company in 2012 when many competitors such as Restaurant Connection did not offer order tracker, real-time GPS or notification. Restaurant Connection is no longer operating in the Twin Cities, but plenty of newer competitors such as DoorDash, Postmates, Google Express, Amazon, Instacart and FlyBuy have joined the market.
Bite Squad had a record second quarter and is seeing sustained year-over-year double-digit growth.
“If you’re growing by less than 20 percent in this business, it means you’re failing,” said Salehi.
Part of the success, according to Salehi, has been lowering delivery fees. What used to be $4 to $8 is now free to $5 in most instances. As long as the restaurant is within 4 miles of the delivery, the fee is $5 or less.
“We’re continually trying to drive prices down,” he said. “Few are willing to pay $7; $5 is a sweet spot, but $2 or $3 is best.”
Although Bite Squad partly determines the delivery fee from each restaurant, it does not charge customers more for any food item than what is being charged in the restaurant.
Dathao Phan, co-owner of KihnDo restaurant in Minneapolis, said her restaurant considered Bite Squad for years but waited until May to start doing business with them.
“So many people in Uptown want delivery that we had to get with the program,” she said. “We’re hoping to get new customers to try the restaurant.”
Bite Squad’s related businesses haven’t fared as well. Gift Squad, with a focus on locally delivered flowers, closed two years ago. Its liquor delivery program with France 44 and Surdyk’s has not expanded.
More than 100 new jobs for drivers will be created for the expansion. Unlike some of its competitors, Bite Squad’s drivers are employees, not contractors, and they receive training and performance management to meet the needs of customers and restaurants.
The company currently employs about 400 drivers.