DoorDash Buying Caviar from Square for $410M

If the target is to work only with Deliveroo or other delivery app then everything can be stripped apart from the kitchen and that kitchen can then be located where it's cheapest since no customers will ever walk in or even know where it is.

That's not a scam. That's an adaptation, an optimisation for a specific business model.

> That simply means real estate has not adjusted to it. It will.

Premium retail space is going to cost more than industrial space that may be located anywhere in a much wider area.

A lot has changed since then, and we’ve had several pretty negative encounters with them including one where the CS rep basically accused us of lying about not receiving our food. (I suspect it was misdelivered because the map software they used put our address as our neighbors house two doors down.)

My last experience with them: The app told us to contact them for an ETA on our food. The actual status of our order wasn’t clear. We had a dasher and then we didn’t have a dasher. There was no way to contact them. We tried “Contact the dasher” and the number didn’t go through. We tried to use the chat functionality (which is ridiculously buried under four or five levels of clicks and even then not immediately obvious” when it used to be basically automatic if you clicked “help”) and it wouldn’t connect us. We tried another number which also didn’t go through. The website had a message about difficulty placing orders at that time but ours was already placed.

So there we sat in limbo not knowing if the food would ever arrive and no way to contact anybody. Should we just go out to eat? We didn’t know. We did use their web form contact them, but the response came way too late to not have ruined our meal time. Eventually our order was cancelled and to their credit they gave us $50 credits but meh.

They can, and they do. One way some chains achieve this is by raising prices vs. in-store. By offsetting the cost, the economics makes more sense.

> It is a creative lie by omission. Same kind of lie that Grubhub had when it forgot about the $$ it charged restaurants for answering phones that Grubhub setup.

> There are maybe a dozen chains (McDonalds/Burger King/Chipotle/Qdoba/Subway/White Castle, etc) that can negotiate $1 fee. Your pizza place, your taco place, your take out sushi joint don't have this ability. If they did then the VCs would not fund DoorDash or GrubHub.

I personally know of chains that have less than 50 locations and have negotiated ~12-15% comm. I also know of a NYC deli with one location that runs at ~15-17 comm. Its about volume. You can negotiate anything with high enough vol.

Not sure what you meant by "creative lie by omission" or if you were referring to what I said.

> Have you heard of Shake Shack?

Shake Shack IPO'd in 2015. White Myers does sit on the board (chairman), they are different companies. Also, Shake Shack has only recently started going into delivery (check their latest 10-K) they are fledglings going from their own platform (OLO) to working w/Caviar/Dash/etc.

Again, successful, but not a barometer.

Restaurant wants to minimize dwell time, which is a time that the restaurant does not spend cooking food for a-la minute order. The closer the restaurant is to the customer, the smaller is the dwell time if the customer is always available. That's the reason why the restaurant wants to be where the customers are.

Delivery-only restaurants dwell time is always larger than the walk in restaurant unless the delivery drivers are immediately and always available when the food is cooked and the time to deliver the food to the customer is the same as time time to turn it over across the counter ( for the same type of food ) which means the restaurant will always make less money in the identical situations.

The only thing that the restaurant gets from the delivery only portion is marketing when its menu is available to people who do not know about it. And it competes with every single other restaurant available in the delivery order. All that for the 20-30% discount off every order. That's the math. It is groupon, all over again. And the arguments of those in awe of the business model are exactly the same. It does not work because the best slammed take out places have 20-30% operating margins.

Finally, there's a startup called Crave which is going to kill this entire DoorDash/Delivery/Deliveroo type model - it gives restaurants ability to dynamically price their checks via discounts ( think surge pricing backwards ) for a low, flat per sale price. Think of it as Yelp Cash, but more dynamic and less connected to Yelp.

This actually solves the problem of dwell time. By offering a dynamic discount based on how busy the place is the restaurant increases a flow of orders into the business.

Yes, those were the purple shirts! Thank you for reminding me the name.

The thing is delivery is not an issue. In the markets that have density, local places figured out delivery. My bodega will deliver whatever I order. For free. So will four other bodegas in the immediate area. The guy who owns the wine store will deliver for free. So will the taco joint. Or PR chicken shack It will be done by the kids of people who own those places. Or by their relatives. Or by their helpers. Yes, all of them would also try UberEats and Grubhub and Seamless and others. All of them will drop those services after a few month ( all of them did ) because they are in a real cut throat market and they know what starts costing them money.

So we get to the areas with less density, which is the burbs and near rural. Such as, say, Bucks County in PA within a 20 minute drive of Doylestown. There are probably about 100 places total to get food from, including Wawa, take out places, casual restaurants and "upscale" sit down places. The issue there is that general delivery is not profitable, which is why none of the places deliver outside 5-10 minute drive. Their customers have cars and driving 10-20 minutes is not a big deal for a customer. The max time they are willing to wait for food is cook time + round trip time. Delivery services can't compete there because they can't beat the cooktime + roundtrip time ~ delivery is free option