Las Vegas restaurant owners team up to take on big food-delivery services
Fed up with the fees charged by third-party delivery services, a group of Las Vegas restaurants is banding together to form its own service, Loco Co-op.
As many as 70 restaurants will be able to buy a share of ownership in the Loco Las Vegas franchise established by Kristen Corral, co-owner of Tacotarian, a plant-based Mexican eatery in downtown Las Vegas.
About 30 restaurants so far have indicated they wanted a share in the Las Vegas co-op, which would compete with app-based delivery services like Grubhub and Doordash, Corral said. The service should be operational here by April.
Loco was started in Iowa City, Iowa, where it quickly gained market share over the other delivery apps in town, and has been franchised to other cities like Omaha, Neb., Richmond, Va., Knoxville, Tenn., and Nashville, Tenn., according to the co-op. Loco is 100% owned and operated by local independent restaurants.
“When we came across the Loco Co-op model, which was already operating in several other cities successfully, we knew we could make it work here in Las
Loco was started in Iowa City, Iowa, where it quickly gained market share over the other delivery apps in town, and has been franchised to other cities
Vegas,” Corral said in a statement.
In Las Vegas, restaurant owners have complained about third-party companies taking as much as 30% per order for delivery, a popular service during the pandemic.
“The idea of food delivery apps as a necessary evil is something that people always say. But it’s only because no one has taken the initiative to create something better,” Corral said.
At the urging of restaurant owners, the Clark County Commission in August capped food delivery fees at 15% of the bill. But restaurant owners say the delivery companies aren’t complying with the cap and are adding other fees, some aimed at customers.
Additionally, the emergency order capping the fees restaurants can be charged will eventually expire.
Forming their own app-based service was the next logical step for restaurant owners.
“With the current model, I don’t feel like anybody is happy,” said Colin Fukunaga of Fukuburger, one of the businesses participating in the new service. “The restaurants aren’t happy about the fees. The guests aren’t happy because they’re charged with fees.”
Commissioner Tick Segerblom, frustrated that the third-party companies have wiggled around the cap, said the commission would consider giving Loco $100,000 to help get it started here.
“We get complaints about the delivery services violating the laws in effect, so we’re trying to crack down on them,” Segerblom said.
Fees for the new service will be based on mileage from the restaurant to the delivery location but won’t exceed 15% of the order. Corral said she expected
the delivery fees would decrease once the company grows. “Over time, commissions will get lower and lower,” she said.
Initially, the service will cover deliveries in downtown and the west side of Las Vegas, with a 6-mile maximum from the restaurant to the delivery location. Within six to eight months, Loco hopes to cover the entire county.
Loco will have a local board of restaurant owners, including Aaron Bradley of the Juicebox LV on Durango Drive. Bradley said the new service meant third-party companies can’t “bully restaurants” into depending on them for delivery.
“If you really want to support Vegas and see the restaurant scene thrive, you’ll support us,” Bradley said.
Drivers will be required to carry a food delivery card from the Restaurant Hospitality Institute, a food service school. Corral said she was partnering with the school to get drivers trained.
Loco will cover the expense of the $30 food delivery card for its first group of 15 drivers. They will earn $15 an hour in a combination of commission and tips, according to the co-op.