Chef Shuttle: Looking For More Than Just Food Delivery

In March 2014, Ryan Herget was standing in the dispatch center for Chef Shuttle. He’d bought the name of a defunct food delivery business a month previously and was determined to make something out of the company. That’s when the name LaFrance appeared on the order list. He told the dispatcher he’d deliver the “Star of India” dinner to the family. He wanted to meet him.

“I knew that they’d taken USA Drug from one store to a regional powerhouse before they sold the chain,” Herget said. “I didn’t know exactly how, but I knew I wanted to be involved with them. They knew what they were doing.”

Three weeks later, Dale Capital Partners, a private equity firm run by Jason LaFrance, formed a partnership with the then 23-year-old Herget.

“It was obvious from that first interaction, he was someone who would hustle and work hard,” said Dan Andrews, COO of Dale Capital Partners. “[Herget] doesn’t just have the drive, but the vision to make the company grow.”

A mentorship from the firm was as interesting to Herget as the actual investment. “There are a lot of places you can go to get capital,” he said. “But I want to eliminate mistakes I don’t have to make. I want someone who can give advice with the money.”

EXPANSION PLANS
Chef Shuttle takes pride in the personal touch for all its customers, not just the ones with money to invest. Herget still delivers orders whenever he can, although that’s getting to be less and less frequently. With operations in Little Rock, Conway, Cabot, Benton, Bryant, Fayetteville, Springdale, Rogers, Bentonville, Memphis and Hot Springs, he does a lot more managing these days. Especially since he plans to expand into six to 10 more markets across the Southeast in the next 12 months.

The 2013 University of Mississippi graduate didn’t plan to own this kind of business. He came back to his native Little Rock with the plan to go into insurance. But soon after graduation, he began to see the potential for “last mile delivery.”

“Nobody wants to wait for what they’ve ordered,” he said. “They want it now. So the trick isn’t necessarily to deliver food from restaurants to people’s homes, that’s just the most obvious place to start. What we want to do is use this to build the infrastructure so we can deliver anything people want to their homes.”

Herget believes the real business he’s building is the proprietary system that tracks traffic patterns, weather and anything that’s predictable. Meal delivery (500-600 per day in Little Rock alone) keeps his systems busy from 11 a.m. to 1 p.m. for lunch and then from 6 to 8 p.m. for dinner. That leaves a lot of down time during the day for other options. He’s considering everything from groceries to dry cleaning to liquor store deliveries.

Not that they advertise it, but they have already been known to grab a gallon of milk for a customer on the way to their house. “We have people who have ordered from us nearly every single day since we started,” Herget said. “Many of them are homebound. When they ask for a little bit of extra help, we’re gonna do that.”

VALUING CUSTOMER SERVICE
It’s the attitude of going the extra mile for that last mile of delivery that Dale Capital and Herget believe sets Chef Shuttle apart from other deliver services. “I try to think about it from the customer point of view. What would make me want to recommend this business to my friends? We know the speed of our growth is because of referrals. Customer service has to be why,” he said.

The Chef Shuttle model is also the first in most markets to only charge customers a delivery fee and driver tip. Most other services add an upcharge to the menu. Chef Shuttle negotiates a commission from the restaurants to keep the service at a price point customers are comfortable paying.

A little over a year ago, there were five people running Chef Shuttle. Today there are 250 people on the payroll, mostly drivers. That speed of growth has presented some challenges, mostly how to keep customer service at top quality while hiring a lot of people at once.

Despite careful planning and counsel, there have also been a few unforeseen glitches, like the Arkansas Razorbacks’ football game against Georgia at War Memorial Stadium last fall. People were ordering, using the golf course as the address with notes like, “I’m on the ninth hole wearing red.” At one point, 40 of the company’s 50 drivers were wandering around the golf course trying to find hungry customers. Then the game let out, and they were stuck in stadium traffic.

“That was not our best day,” Herget said. “We were barely six months old. It was a mess. But we learned a lot about how to dispatch events like that. Now we’re prepared. Something like that won’t happen again.”

It’s the ability to learn and move forward that has investors so pleased. “We typically don’t invest directly in a business,” Andrews said. “But this partnership has succeeded beyond our wildest dreams.”

Herget is also slightly surprised by how quickly things have grown, but finds the work satisfying. “I get that it’s absurd to say that a food delivery business is changing people’s lives,” he said. “But we make a real difference for some of our customers. We deliver to a lot of people who are sick or homebound for some reason. We deliver to parents with newborns. We really do help some people. We make their lives just a little easier. I’m proud of that.”