EVs boost Domino's pizza delivery as chain looks to attract drivers

How can pizza delivery be more "en-pie-ronmentally friendly?" A fleet of custom-wrapped Domino's electric delivery vehicles, emblazoned with this cheesy pun, has hit the streets of southeast Michigan to answer that question.

Now the EVs are serving up pizza and brand visibility across nine locations in suburban Detroit as part of a wave of electrification sweeping last-mile delivery.

Domino's franchisee Dally Investment purchased 25 custom-wrapped vehicles, a portion of the fleet of nearly 800 Chevrolet Bolt EVs that Domino's is launching as part of the company's goal to achieve net zero emissions by 2050.

While environmental and maintenance cost considerations influenced the decision, Dally operations director Wade Ross said marketing was a major factor behind the move as EVs help increase Domino's presence in neighborhoods and attract new drivers. The wrapping stands out from the personal cars pizza delivery drivers typically use.

"There are a lot of different driver jobs out there with DoorDash, Uber Eats," Ross said. "So, attracting good, qualified drivers has been difficult, and offering a company vehicle is a huge benefit that can attract drivers."

Previously, Dally required drivers to use their personal vehicles. It reimbursed for maintenance at a rate set by federal guidelines per mile driven daily. Now the stores can provide an alternative; drivers don't have to worry about wear and tear, Ross said. "Everything is paid for in a sense by the company."

Domino's faces stiff competition for drivers from delivery and ride-hailing services. Rising inflation has seen many Americans take up food or grocery delivery through services such as Instacart, DoorDash, and Uber Eats as a way to earn extra cash, according to a recent survey by LendingTree, an online financial services marketplace. At the same time, upsurges in gasoline prices have put pressure on driver wages and resulted in intermittent driver shortages.

More visibility has also meant a unique opportunity to gain loyalty through more customer interactions and questions. With driver wages so dependent on tipping, this has been critical, Ross said.

"Face-to-face interaction with customers and talking about our cars, brings more of a positive atmosphere," he said. "It's bringing in more customers, repeat customers and giving us an opportunity to sell our brand."

Food delivery technology has become more competitive since the pandemic, driven by evolving consumer needs. For instance, Domino's launched a pilot program for autonomous pizza delivery robots in Houston in 2021, and Uber launched a similar robotic food-delivery program in Santa Monica and West Hollywood, Calif., last year.

And there's another chain using EVs for pizza delivery. American West Restaurant Group, a Pizza Hut franchise system in California, partnered with ElectraMeccanica to buy a fleet of electric Solo Cargo delivery vehicles.

Last-mile distribution is where electrification was expected to happen first, Aakash Arora, automotive economics expert at Boston Consulting Group, told Automotive News.

With its return-to-base routes, delivery services using EVs are less hindered than other businesses by a lack of public charging infrastructures. Dally has installed five EV chargers at its stores.

EV delivery also benefits from other factors. The cars are limited to mostly urban and suburban driving, where EVs are more efficient. And they can be charged overnight, when electricity rates are lower.

These opportunities mean that franchises find "everything makes the economics of electric vehicles better," Arora said. "It's a win-win for the franchisees and for the communities they serve."

Amazon's partnership with Rivian and FedEx's with BrightDrop are examples of electrification in last-mile distribution beyond food delivery. Uber's deal with Hertz, which is building electric fleets with Tesla, General Motors and Polestar, is serving similar expansion in the realm of short-term rentals.

Ross said he has seen the wave of EV popularity in the U.S. and "being a part of that definitely should be attracting a lot of not only drivers in general, but also customers who are happy to see that we're doing these things."

Implementation of electrification requires franchises to ask "tactical operational questions," Arora said. These questions include where and how routes are being driven to manage range capabilities and when, where, and how the vehicles are being charged.

Answering these questions for Dally has been a process of adjustment and "introducing new systems," Ross said.

A full charge can take six to 10 hours, requiring a constant rotation to keep pace with seven-day weeks and up to 17-hour days, Ross said. Preparing for busier periods, such as holiday weekends, requires even more "coordinating, preparing" and trust in the staff to keep the charging rotation running smoothly, Ross said.

Dally has also noticed a decrease in the miles it can get out of a full charge when weather conditions require more vehicle systems, such as heating and fans, to be on throughout the day. Heating and air conditioning are known EV "range killers," which can cause actual mileage to fall short of estimates.

"I'm not sure I'm looking forward to the dead of summer, when it is 90 degrees outside and the AC is cranking," Ross said. "Is that going to have as much of an impact as in the wintertime with the heat? I don't know that for sure."

Overall, the EV transition has been worth it, Ross said. "Drivers are loving them. They drive wonderfully and we attract a lot of attention."