LOCO CR, the Cedar Rapids-based food delivery service in the works for nearly four years, is now up and running, and its leaders say it will provide a superior experience for participating restaurants, drivers and customers as compared to nationally-based services.
Jon Sewell, founder and chairman of Go LOCO, said the new LOCO CR service is designed to operate similarly to CHOMP, a service that’s been operating in the Iowa City area since 2017.
LOCO CR – named as a contraction between “loyal” and “local” – began operations on Wednesday, Nov. 10 with a single local restaurant, The Blind Pig, but Mr. Sewell said other restaurants will be added into the mix over the next few weeks, leading to a formal grand opening celebration in mid-January, when up to 80 restaurants are expected to be participating.
Unique features part of LOCO model
Several features will set LOCO apart from national services like DoorDash, GrubHub and UberEats, Mr. Sewell said.
The service will charge a commission of 15% for local restaurants to accept LOCO orders – about half the 30% charged by the national providers, which can strain profit margins for local restaurateurs.
LOCO CR will also be fully owned by local restaurants, who are given the option to become investors under a cooperative model. About 30 investors are expected to be in place by mid-January, Mr. Sewell said.
Participants aren’t required to invest in LOCO to participate in the service, he said, but participating restaurants are required to be locally-owned – they can be a local franchisee of a national company, but corporate-owned chain restaurants will not be allowed.
LOCO’s delivery drivers will also be employed locally, in contrast with the independent contractor driver model employed by national services. Drivers will sign up for specific shifts, likely in four-hour increments, and will be expected to be available to deliver any orders placed during their shift.
In return, drivers will be guaranteed compensation of at least $15 per hour, a guarantee not offered by national services. Drivers will receive 100% of their delivery fees plus any tips, and if they earn less than $15 per hour over the course of their shift, LOCO will make up the difference.
Customer service will also be provided locally, Mr. Sewell said, initially through a cooperative service agreement with CHOMP’s existing customer service team in Iowa City. Restaurants will be able to respond to customer concerns more directly, while the standard solution for national delivery services is to “comp” customers if orders aren’t delivered on time or are inadequate.
Supporting local key factor
For customers, Mr. Sewell said, a key element is the concept of supporting local businesses — making a conscious choice to use LOCO CR over a national service.
“In a community like here, that sways people,” he said. “It doesn’t sway an undergrad student. They don’t appreciate how a town or city relies on other members of the city to keep it viable, doing business here instead of Amazon or whatever.”
In most other respects, the service will operate similarly to national competitors, with online-based ordering and a choice of local restaurant options that’s expected to grow to near 80 by mid-January.
LOCO delivery service will be available in the Cedar Rapids, Marion, Hiawatha and Robins areas, he said, with deliveries initially being offered from 11 a.m. to 8 p.m.
Local service years in the making
A locally-owned delivery service for Cedar Rapids has been in the works for some time. An effort to bring CHOMP to Cedar Rapids faltered in 2022 after a two-year run, spurred in part by a lack of local ownership “buy-in” in the Cedar Rapids market. LOCO itself was initially anticipated to launch in late 2024 under the leadership of Steve Shriver, but he was unable to continue due to other business commitments.
Mr. Sewell spent nearly 30 years in health care administration, and as the local franchisee of D.P. Dough in Iowa City, who employed his own delivery drivers in a competitive market, he says he’s well-versed in the intricacies of operating a food delivery service. He also helped establish a local food delivery service, NOSH, in Fort Collins Colorado, which has operated successfully for several years.
He’s been assembling a fleet of drivers in recent weeks. And with support from local restaurant owners like The Blind Pig’s Ryan Evans – who doesn’t offer delivery through any national services – and Tim Palmer of The Salsa Guy, he said he feels the service has a strong chance of success.
“I’ve put a ton of effort into it,” he said. “I absolutely know the model will work.”
Salsa Guy owner expresses his support
Mr. Palmer said The Salsa Guy will be joining the LOCO platform soon, primarily in order to support locally-owned businesses.
“As a small, locally-owned business, I much prefer to support the local economy and locally-owned businesses, keeping our economy thriving from a local basis,” he said. “If you look at the revenues from DoorDash, just in itself, they’re the 800-pound gorilla, almost $60 billion in revenues, and that money is going out of state and doesn’t come back. And quite honestly, I’m not sure that they’ve been as supportive of the restaurant industry as they should be, because obviously they dominate the segment. But there’s a lot of restaurants right now that live and die by Door Dash. It’s almost like they’re addicted to the revenue, and I can’t remember the last time they did anything to reduce the cost impact on the restaurant customer.”
LOCO CR’s lower commission rate for local restaurants is also appealing, Mr. Palmer said.
“That makes it a little bit more profitable, to say the least, and (with) all the incentives of keeping the dollars local, I think you’re going to see a lot of locally-owned small businesses gravitate towards that,” he said. “I’m not sure you’re going to see them abandon DoorDash, because LOCO is still new. They’re going to need to build their user base. But there’s a lot of people in the local economy that prefer to support small locally-owned businesses and restaurants.”
Mr. Palmer also noted he appreciates LOCO CR’s model of providing a “living wage” for its drivers.
“$15 an hour is unheard of in the DoorDash parlance,” he said. “Because of that local ownership mentality, they’re going to be able to recruit and retain a higher quality driver, and that’s all part of the service experience, too.”
More information
LOCO CR is in the process of assembling a local board of directors, hiring drivers and recruiting local restaurants. For more information, go to lococr.com, download the LOCO CR app on Google Play or the Apple App Store, or call LOCO CR at (888) 319-2824.
