Third party delivery is here to stay. But if restaurants seize the opportunity to turn the national for-profit model into a local public utility, they can protect the interests of small businesses from tech investors who want to squeeze as much money out of them as they can.
LoCo Co-ops was created by Jon Sewell, a restaurant owner in Iowa City, Iowa. Sewell started a delivery co-operative when the behemoth online and mobile food-ordering company GrubHub bought out the OrderUp! service that had been operating in Iowa City and proposed to double the commission rates it charged local restaurants. The rate hike would deal a harsh blow to restaurants in Iowa City, and rumors held that some may even have to close their doors in response. Seeing an opportunity to help, Sewell set up a model familiar to him from his background as a health care executive: a business owned by a collaborative group of the main stakeholders, the way hospitals shared mobile MRI machines. Sewell approached other restaurant proprietors in town to become co-owners of what became the city’s first delivery co-op. After refining the concept with the launch of a second delivery co-op in Fort Collins, Colorado, Sewell founded LoCo Co-ops to share this locally owned model with communities of restaurant owners across the United States and internationally.
LoCo believes in creating a fair and sustainable alternative to the companies that are currently setting the tone of food delivery nationwide. We believe that restaurant owners themselves should be involved the decision-makers for how their food is delivered, and that they should also be charged commission rates that are fair—unlike the current national rates, which are way above most independent restaurants’ margins. Lastly, LoCo believes that food delivery is an extension of the onsite service restaurants provide. When delivery is handled by an off-site, third-party company, customer service suffers. LoCo focuses on providing a quality customer experience and aims for total customer satisfaction, just as any restaurant would.
If you are looking to develop a co-op in your town or city, we’re here to help!
What Food Delivery Apps Don’t Want You To Know
• They take a huge bite out of restaurants’ profits for each order they deliver. Restaurants make an average of 4-8% in profit, and after paying exorbitant commission rates and fees to a third-party delivery app—up to 30 percent!—they often lose money.
• The money that third-party delivery funnels away from local economies benefits national corporations and their stockholders, and no one else. Why do we trust billion-dollar tech companies with the survival of our local businesses?
• They don’t pay living wages to their drivers. Delivery drivers for the big three delivery platforms make an average of only $4-8/hr, and despite skimping on labor costs and milking restaurants dry, these companies still fail to make a profit, year after year.
• They collect and abuse your customer data to set up “ghost kitchens,” fake restaurants created by outside marketing departments that pretend to be local so they can siphon even more money away from small businesses.
110,000 independent restaurants closed in 2020 alone. We must make a change to save
our local restaurant communities
Meet the LoCo Management team
Jon Sewell CEO and COO
Jon had a 30-year career as a Health Care Executive in the nonprofit Hospital sector before retiring. During this time, Jon set up over 20 multi-hospital co-op ventures. For the past seven years he’s owned a restaurant in Iowa City, and for the past three years has successfully set up two Third Party Delivery Service co-ops with a total of 70 restaurant partners in Iowa City, IA and Fort Collins, CO. He has a Bachelor’s degree from the University of Michigan, Ann Arbor, and an MBA from Wayne State University in Detroit.
Kyle Brown, CFO and CTO
Kyle is a co-Founder of Cater Nation which was formed in 2009. At Cater Nation he has negotiated most of the company’s national restaurant partnerships and led technology integrations with platforms like Concur, Trustpilot and Twilio. His CFO and CTO roles for the company have drawn on his 30-year career in telecom finance and accounting. He has a BSBA from the University of Florida and an MBA from Stetson University.
Amelia Sewell, Lead Field Operations Manager
Amelia has worked in the food service industry for 15 years, during which time she received her Bachelors in Business from University of Colorado. She has been a restaurant General Manager and has helped launch both the Iowa City and Fort Collins co-ops. She understands all of the various operational components of operating these entities and was personally responsible for bringing up the IT platforms. Amelia will be our first Field Operations employee and will train others to initiate co-ops nationally.
Sandy Ting, Field Support
Sandy received her Bachelors in Business Finance from the University of Iowa. She has worked in the restaurant industry for over 25 years co-founding Ting’s Red Lantern with her parents. She has served in various leadership positions in the service industry and understands the importance of customer service as well as the bottom line.
Dustin Gwee, Field Support
Dustin is the founder of Dome School, an online tutoring service that aims to support students as they transition to a remote-learning environment. He was a managing partner in a restaurant located in Iowa City where he managed business operations and back-end IT. Dustin also serves as Board Treasurer for The Creative Corridor Center for Equity, a non-profit that aims to develop systemic approaches to achieve racial equity. He has held roles as an Auditor and Analyst for Raytheon Technologies and received his BBA in Accounting from the University of Iowa, Tippie College of Business.
Shiva Srinivasan, Advisor
Shiva co-Founded our technology partner Zuppler and serves as its CEO. Shiva has been instrumental in growing Zuppler as a complete order fulfillment solution for restaurants, groceries, hospitals, universities and hotels since its founding in 2009. A technologist by heart, Shiva is passionate about building efficient teams and processes, strategic partnerships and a global solution.
Joel Silverstein, Advisor
Joel is a long term Asia Pacific based executive with extensive experience in fast-moving consumer products, hospitality as well as entertainment streaming, and retail. He is a former senior executive with KFC, Pizza Hut, and Outback Steakhouse as well as DIRECTV International. Joel managed a large Pizza Hut division in the USA previously with more than 650 restaurants & delivery units. His company, The East West Hospitality Group, currently has an active advisory practice with leading international restaurant & hotel groups as well as venture capital and private equity funds.
Will Braverman, Field Support
Will is a recent graduate of the University of Iowa Tippie College of Business with a focus in finance. He’s helped a student-led startup raise over $175,000 through business competitions at universities such as the Wharton School of Business, Massachusetts Institute of Technology, and UC Berkley to name a few. He is bringing with him a background of financial modeling from his previous role as an equity research analyst for the University of Iowa endowment.