How to Reduce Last-Mile Delivery Costs for Takeaway Businesses in 2025

Today, last-mile delivery is one of the fastest-growing processes in the global supply chain. In 2024, its market size is valued at USD 161.20 billion. It is expected to grow at a CAGR of 9.8% and reach USD 373.92 billion by 2033.

These operations consume 41% of total logistics costs, with retailers often covering expenses via free delivery offers. It reduces their profitability by up to 26%. By optimizing strategies, business owners can reduce the delivery costs and ensure high profit margins. Here is a practical guide to the strategies that actually work.

Major Costs Drivers in Delivery Operations

• Third Party Delivery Fees:Third-party platforms like Uber Eats charge around 15-30% commission per order. This results in reduced margins for profit.
• Fuel and Vehicle Maintenance costs:In takeaway delivery, fuel costs average $300–$600 monthly per vehicle while maintenance averages $125. These drive substantial fleet expenses amid volatile prices and high mileage.
• Inefficiency in Order Management:Poorly coordinated dispatch processes and communication delays lead to longer delivery windows. It also causes increased labor costs and reduced customer satisfaction.

How to Reduce Delivery Costs When Delivering Takeaway?

Use E-scooters

According to US Market News, an electric scooter has reduced operational and maintenance costs. It can save significant time and cost as compared to cars or motorcycles. Due to ease of maneuverability, riders can complete more deliveries within a short time period.

The e-scooters or e-bikes also have zero tailpipe emissions. So, they are not only budget-friendly but also eco-friendly.

Optimize Delivery Routes

An optimal routing plan can help deliver takeaways more efficiently. By collecting and arranging data about real-time traffic, rider schedules, and prioritized deliveries, a business owner can develop the perfect routing plan.

A report by the U.S. Department of Energy states that optimized logistics can cut fuel usage by 15-20%, leading to substantial savings. It also improves customer satisfaction rates.

Use Hybrid Approach

Rather than standalone in-house delivery services, smartly strategize a hybrid approach. It can help save up to 30% on delivery costs. For peak hours or long distances, use third-party delivery services.

For less busy hours and short distances, send your in-house riders. In this way, you can reduce delivery costs and also expand your range to longer distances.

Extend Delivery Window

Small businesses can extend their delivery window to cut down on their operational costs. As there is an increased time gap between receiving an order and delivering it, riders can deliver multiple orders at once.

This reduces total miles driven and idling time, lowering fuel consumption and vehicle wear. It also reduces the need for hiring more riders, thus reducing the labor costs.

Adjust Fees by Distance

By adjusting the delivery fee by distance, businesses can efficiently deliver takeaways. Set defined delivery boundaries, including the fee, delivery distance, and minimum order price for each distance.

For long-distance delivery, set a higher minimum order price and delivery fee. It can help cover fuel and operational costs easily and sustain a good profit margin.

Try XSTO’s ET300P2 Motorized Platform Cart 

Investing in e-scooters initially may look risky, but it can help reduce delivery costs for a lifetime. Switching from a car to e-scooters helped businesses save around $200 per month. Are you also looking for such budget-friendly options to reduce delivery costs?

The XSTO ET300P2 motorized platform cart can carry up to 661 lbs of weight in one go. It can efficiently move both on slopes and flat services to ensure a smooth delivery. The foldable cart is lightweight and comes with a foot control for easy maneuverability.

Conclusion

Starting a business at this time is not easy. There is a very high competition and the operational costs can make you lose hope. However, with proper strategies, your business can thrive while ensuring high profits and customer satisfaction.

For last-mile delivery, you can save the fuel and maintenance costs by shifting to e-scooters. For long distances, avail third-party delivery services.