Shuttle Delivery: turn your bitcoins into bites without leaving your home
Shuttle Delivery is a startup based in Seoul that provides food delivery services from restaurants to customers. Their increasing success, diversity, the international experience they create, and integration of bitcoin as a means of payment have attracted the intention of the Bitcoin Center Korea. We went to their office in Itaewon to know more about them. More specifically, in this interview, one can expect to learn about their history, what are the main challenges of the food delivery industry in Seoul, what can we expect from Shuttle Delivery in the future, and what does it take for a business to adopt bitcoin.
Interview with Jason Boutte and Florian Wermelinger, Co-founders of Shuttle Delivery
Hello Jason, hello Florian. Thank you for inviting us to your office for this interview. How did you come up with the idea of Shuttle Delivery? When did everything start?
JB: We were two separate startups at the beginning back in 2013: Y-Not Takeout and Bird Riders Food Delivery (BRFD). I was the founder of Y-Not Takeout, competing with BRFD for the same demographics. No company offered that kind of internet-enabled service before, despite the fact that there were companies listing restaurants that deliver themselves. We wanted to bring more than listings to customers.
I never thought that what we did was very innovative, we were just competing to get the best position by using strategies such as free delivery, securing the best drivers or asking restaurants to choose between the two service providers. At one point, we just realized it was better to merge and sat around the table to discuss this possibility. In 2016, Shuttle Delivery was born as a combination of the best of its two parents.
Was it difficult to set up? How did you convince the first restaurants and customers?
JB: At that time, many believed that this wouldn’t work. There were a few companies that had tried and failed, mainly because of a lack of drivers and insurance. First, many restaurants were very skeptical when I proposed our services. I had to convince them by offering a free service and arguing that they would pay no fees, it would just bring more customers. After a few months working with restaurants we were able to renegotiate the contracts and get more attractive packages, including the possibility to pay once at the end of the month and not for every single delivery at the moment of transaction.
What do you mean by insurance problems?
JB: To be frank, delivery drivers in Korea having crashes happens sometimes. Customers want the food within one hour or so. This creates stressful situations for drivers. It is these kind of things we need to manage carefully with the insurance agencies. This would already discourage some people in this kind of business.
How many restaurants are you working with?
FW: Currently, we work with 226 restaurants. The number that shows up in our apps is different for every customer. Because our application filters out the ones that are too far for delivery.
Do you offer all kinds of food? Or is there a focus on specific demographics?
JB: I think that it is fair to say that we have both a pretty decent number of internationals and Koreans that use our app. We strive for giving an international experience, so we try to diversify as much as possible.
In Europe, we have delivery services similar as yours but they can barely compete with UberEATS that has more resources. To what extent do you feel threatened by those major players?
JB: Uber has less presence in the taxi business in Seoul than it probably does have in Europe. But the main point is that we can differentiate ourselves from those competitors.
First, we had a first mover advantage, even though we could not fully reap the benefits because of a lack of resources inhibiting fast scaling.
Second, people like our customer service; our user experience. It is like a checkbox full of little things to fulfill: when you can satisfy all those small components (e.g. listing their favorite restaurants, having good customer service that can fix problems, etc.), people just keep using what they are used to. We do not need to have a strong and aggressive marketing strategy.
Another thing that makes Shuttle really special is the diverse team. Right now we have people from 12 countries working with us. We get a lot of interesting viewpoints and input from that, which a bigger, more corporate player here probably wouldn’t.
Finally, I do not see why we could not have our part of the pie. The market is big and the other major players would focus so much on scalability that the resources needed to take our small part of the pie would not be worth the return they can expect to get from it.
What is your growth rate?
FW: About doubling every year in terms of orders per day. I am very satisfied with our steady growth instead of having huge peaks. Scaling is not an easy thing, especially when you do not have significant financial resources behind. We keep growing a little bit every month and use our resources the most efficiently as possible.
JB: I honestly do not think that we would be able to sustain very high growth such as doubling every month. There is a significant amount of key performance indicators to satisfy simultaneously. Is it the number of orders, the customer appreciation, or the number of restaurants that matter? We are always facing dilemmas. As an example, at first glance it may seem logical that having more restaurants listed is better. However, if you choose some that perform a poor service, that will reflect mainly on shuttle delivery, not on the restaurant itself. When people order with shuttle, they also tend to associate the quality of the food to our brand.
What is the main difficulty when trying to scale?
JB: The delivery men. There will always be not enough or too many. It is difficult to reach the right balance, especially as the deliveries mostly occur at the same time, around 6pm.
Where do you see potential growth?
JB: In an ideal world, this business would be useful all-around Korea. Nevertheless, we should first try to reach more areas within Seoul. Currently our customers are concentrated in some parts such as Yongsan or Itaewon. From a business perspective, it thus makes sense to operate mostly there. We are working on covering Gangnam soon and we need to do some additional research to see what are the most promising and operationally efficient areas within Seoul.
We do not want to be a company that just lists restaurants that deliver. However, in relation with our good customer service strategy, we may consider some areas where the demand is not high enough (or if we cannot scale fast enough to cover those areas in a near future) and then expand to actually deliver there ourselves. We try to be as efficient as possible, to reduce pain both from the customer side and ours. We currently have 20 people working at the office and around 20 drivers.
Customers can pay for their delivery using Bitcoins. What are the benefits? Is there any disadvantage? FW: We want to provide the easiest checkout for customers. We have been looking at different options. The easiest at the moment is cash, especially as it is sometimes difficult for foreigners to get a Korean bank account. We decided to try Bitpay in order to offer bitcoin payments. Clearly, I was impressed by the simplicity of this means of payment and knew it would be a good feature for our website.
However, currently it is not a major payment system on our website, only a small fraction of the customers use this technology. We hope that it will become more of a common thing as the transactions fees are less expensive than, let’s say, with PayPal.
Sometimes bitcoins transactions take some time to proceed. How do you deal with that?
FW: Bitpay is taking care of that for us. They provide almost instant confirmation.
Are you planning to accept other cryptocurrencies?
FW: It depends on what Bitpay can propose and how many people will be willing to use those features. Some consider Bitcoin more as a store of value and are considering other cryptocurrencies for making payments. In fact, some architectures suggest lower transaction fees and higher speed which, for this kind of application with relatively small amounts, are preferred. Basically, if other cryptocurrencies are adopted by people, we will follow the move.
Was it easy to settle the bitcoin payment system?
FW: Bitpay does not do everything, we needed to set up the API and verify the payments when submitted. There are a few very easy integrations that can be used with Bitpay such as payment for a fixed price. However, on our platform everything is dynamic, prices change with the delivery settings and there is thus some computation behind. Consequently, some coding was required to implement this functionality.
Let’s imagine bitcoin becomes commonly used: would it improve your experience as a delivery service?
JB: Definitely. When you start a business you like cash, but now it has become really inconvenient to regularly have to deposit at the bank, and I am not even mentioning the payments in coins… Bitcoin would definitely improve the process on our side as well.
Would you then recommend restaurants and other stores to accept payments with bitcoins?
JB: I really like bitcoin. For me, this is like how the internet was back to the late 1990s; the infrastructure that enabled great companies such as Ebay, Yahoo, or Amazon. We don’t know which ones will survive, but some will definitely be huge. It makes sense that this is sustainable and has potential, we just need to evaluate which ones we can trust. So yeah, I am really excited and looking forward for blockchains payments and other applications to become the standard. I can therefore only recommend everybody to join the rapidly increasing community.
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