Bite Squad plans to swap out delivery fleet with Tesla Model 3s

Bite Squad wants to go electric.

The Minneapolis-based restaurant delivery service, which now operates in 30 markets around the country after a flurry of acquisitions last year, is taking the first steps to swap out its current fleet of hybrid vehicles to Tesla Model 3s. It plans to test out a handful of the battery-powered cars on the road in its home base of Minneapolis this fall.

If the cars perform as hoped, executives plan to begin transitioning the rest of the fleet of several hundred Toyota Priuses to Teslas over time. The delivery service also relies on drivers to use their own personal vehicles. Company-owned vehicles account for about 10 percent of the fleet.

"We think it could be a big game changer for us both in terms of cost and liability and safety," said Craig Key, the company's vice president of marketing.

The cars themselves are similar in price to a Prius, but would save the company on fuel costs, which are a big expense, as well as on maintenance for things like oil changes. In addition, Bite Squad hopes Tesla's assisted driving technology will lead to fewer accidents.

Tesla has promised to enable the cars down the road with full self-driving capabilities -- technology that is appealing to delivery firms such as Bite Squad. While Bite Squad executives say that self-driving component is an additional draw to using Teslas, they say it's going to be awhile before the company does driverless deliveries.

"Everyone is wondering when are the drones going to take the Pad Thai to their doorstep," said Key. "We're not there yet. That's not in the short term future for us."

In the meantime, Bite Squad is crossing its fingers it will have its Tesla Model 3s delivered by early this fall after placing its reservation for them late last year. The car manufacturer has not been able to keep up with demand for its cars and has a big backlog of orders.

"We're waiting on our order still," said Key. "We're at Tesla's mercy like everybody else."

In addition to transitioning to electric vehicles, Bite Squad is also working this year to roll out a number of digital payment options such as Apple Pay and Google Wallet. It's also exploring cryptocurrencies.