Zip Lunch, a food delivery Start-up, launched their venture in March 2020. The timing could not have been worse. The pandemic started just four days after they introduced their food delivery service in Toronto targeted at the customers who were corporate lunch-goers. The pandemic lockdown forced the corporate towers housing the offices to empty.
As per Bloomberg, the company tweaked its business model adapting to the new environment.
Four months into the pandemic, their Zip Lunch drivers delivered food to the white-collar workers at home instead of the office. The diversion allowed ZipLunch to grow while it remained committed to its original plan of serving food from its restaurant at attractive prices and with a low carbon footprint at its premises.
ZipLunch founders Maj Qureshi and Majidi Alnabih believe that ZipLunch meals are 55% cheaper than other similar apps offering food delivery services. Plus, their company’s environmental impact is 95% lower because ZipLunch procures its raw materials in bulk and passes on savings to its customers.
The company’s menu is limited and curated as per customer’s demands. They coordinate the delivery pick-ups to minimize travel distance, thus keeping costs and emissions low. It does not charge delivery fees from its customers, provided the order for lunch and dinner is placed before specific cut-off times. Another condition is that ordered menu items cannot be modified. This helps ZipLunch to fulfill bulk orders fast.
Around 30 to 50 customers are serviced by a single driver in a particular locality. Customers are given 30 minutes delivery window, which allows the driver to meet them at the curb. A grace of few minutes with a warning helps.
Qureshi, who is the head of operations, says,” if you are a busy person and a foodie, you will like variety. Our platform will work accordingly for your requirements. ZipLunch is not an on-demand platform”.
Qureshi and Alnabhi, who are high school mates, encountered problems in food delivery services as customers and set out to fix them by improving the services.
The existing service charges were high, and customers had dilemmas on what to eat. The co-founders wanted to offer cuisines from different cultures that reflected Toronto’s diversity. Plus, the eco-friendly option to serve employees of corporate clients.
During Covid-19 restrictions, restaurants shut down indoor dining and many platforms 100+ restaurants. ZipLunch cut its service charges to10% of the order, half of what it was charging earlier. The rates are back to normal now that dining is allowed, but its charges are still lower than industry rates of 25-30%.
According to Ashwin Jeyakumar, General Manager at Ravisoups in central Toronto and run by a family-owned chain,” Ziplunch costs almost the same as any other restaurant with a dedicated driver, but the service is worth it. They are more personalized, and the food, especially the soups, are well taken care of.”
One of Qureshi’s biggest regrets has been that they were not aggressive enough in the past 18 months. Now that the employees are going back to offices, businesses from corporate clients are picking up. The opportunity of serving more areas and grabbing marketspace when customers were working from home was wasted. “The covid presented too many unknowns, and we were cautious,” says Qureshi.
Today ZipLunch is competing with four other rival delivery services platforms in Toronto. Though the industry margins are tight, they are presently focusing on gaining market share. They are discounting menu items frequently, absorbing costs to boost orders.
ZipLunch revenue was growing at 22% M-O-M and doubled its income in the first half of 2021 compared to the same period in 2020. The founder’s mission is to put ZipLunch back on track and be profitable by the end of 2022. They are seeking fresh funds to spur growth in Toronto and expand to other cities in North America.
Qureshi says, “We are looking for funds from Venture Capitalists in Canada and USA since ZipLunch is incorporated at Ontario and Delaware. International investors have shown interest in our business model, and we are pretty excited about it as we enter a new era“.