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What DoorDash pays, after expenses, and what’s happening with tips

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Re: What DoorDash pays, after expenses, and what’s happening with tips

#501

Post by Balanceinfinity »

gadabout wrote: post #442
Balanceinfinity wrote: post #419

It's a free country - the drivers can choose to take the assignments or choose not to. What they (and customers) are entitled to are accurate information so they can make choices about whether this is in their interest. It's easy to say "Door dash should pay more," (and they probably should), but that might cut customer usage by 40%, which means half of the people driving wouldn't be able to drive. The one thing that…

Curious, where does 40% come from?

hypothetical number - chosen for the sake of argument

Re: What DoorDash pays, after expenses, and what’s happening with tips

#502

Post by paulddraper »

dmode wrote: post #490
paulddraper wrote: post #190

Earlier quoted context omitted.

We can have those businesses. They just don't make as much money, so are inferior. Unless of course, customers don't tip. Then your suggestion is not an inferior competitor.

I mean Apple built a trillion dollar business by charging customers high prices with huge margins

Sounds like a good model for a computer hardware business.

Extending that to restaurants may be a bit of a stretch.

Re: What DoorDash pays, after expenses, and what’s happening with tips

#503

Post by lotsofpulp »

rchaud wrote: post #498
lotsofpulp wrote: post #379

Earlier quoted context omitted.

Oyo is worse than the others. They think they can offer the same type of hotel quality without employing all the quality inspectors of Marriott/Hilton/IHG/Hyatt/etc. I don’t think any educated adult could be dumb enough to fall for that. I have to assume any VC taking part in a business that needs additional human labor to scale and hence has significant marginal costs is simply betting on being able to dump the comp…

Oyo's top VC happens to be none other than Mayasoshi Son.

Yes, his current strategy seems to be find a magazine article worthy “leader” like the we work guy or the oyo kid and hype them up and hope he can dump it before there are no buyers. I don’t know what his strategy was in the past, but he commands quite a bit of money so maybe it worked at some point.

Re: What DoorDash pays, after expenses, and what’s happening with tips

#504

Post by [deleted] »

AlexandrB wrote: post #428
boh wrote: post #341

It's becoming abundantly clear the real innovation from on-demand services (including ride-sharing companies), is their ability to transfer more money from labor to capital with complex pay structures. For many if not most of these companies, its their only means towards profitability. For instance, any rise in revenue Uber experienced in the last 3 years was exclusively due to cuts in pay for drivers. Tech has long…

Most of the gig economy companies are Movie Pass but with a longer runway.

[deleted]

Re: What DoorDash pays, after expenses, and what’s happening with tips

#505

Post by umvi »

hardbop200 wrote: post #435
umvi wrote: post #423

Earlier quoted context omitted.

There's another disturbing trend I've seen on Facebook. It's where these moms become "entrepreneurs" but when you dig into what their business actually is, they basically host these paid sessions on how to be an entrepreneur (setting up branding, etc.). As far I can tell, no actual product or value is generated, it's like a "business virus": "I'm an entrepreneur!" "Cool, what does your business do?" "Help people get…

> As far I can tell, no actual product or value is generated, it's like a "business virus" I believe that is what the OP means by MLM (multi-level marketing)

Well at least with MLM there is some sort of product changing hands (knives, essential oils, etc.) Here, as far as I can tell, the purpose of the business is to create more businesses that create more businesses, etc. (but there is no actual product).

Re: What DoorDash pays, after expenses, and what’s happening with tips

#506

Post by xyzzyz »

Balgair wrote: post #463
boh wrote: post #341

It's becoming abundantly clear the real innovation from on-demand services (including ride-sharing companies), is their ability to transfer more money from labor to capital with complex pay structures. For many if not most of these companies, its their only means towards profitability. For instance, any rise in revenue Uber experienced in the last 3 years was exclusively due to cuts in pay for drivers. Tech has long…

I recently got into EconTalk and burned through a few of their podcasts [0]. Roberts mentions his 'distain' for the minimum wage a fair bit during the shows. Many economists do not like the minimum wage at all for many reasons. However, with these gig economy jobs, there effectively is no minimum wage. Yes, things are murky here about the definitions of wage, employee, boss, etc. But the effective hourly rates are al…

It turns out, that number is very low, so low that most people aren't rationally taking those jobs. Factoring in depreciation, I often hear that they loose money to work (not always, but damn close).

This is simply hard to believe. There are over a million driving for Uber. An overwhelming majority of them must be making money, because the idea that any significant fraction of a million of people is in the red at the end of a year simply is ludictious. Sure, they might be making less than they think after accounting for operating costs, insurance and depreciation, and they might be making less than they would had they got a regular job, but they cannot possibly be actually losing money.

Re: What DoorDash pays, after expenses, and what’s happening with tips

#507

Post by tmpz22 »

ravenstine wrote: post #465
Reedx wrote: post #242

Earlier quoted context omitted.

> the shitty no-tip orders just so they have a shot at getting better ones. Wait a second... Are people not giving a cash tip in these cases? I do no-tip and give cash instead (which I thought was preferred). Is that a bad strategy?

Most no-tip orders don't result in a cash tip, but some do. I'd say 1 in 5 no-tippers end up tipping in cash. People who use these apps aren't exactly the greatest customers in the world. It's only a bad strategy if most or all drivers pass on your orders. Some drivers take these offers in hope for cash. I chose to stop taking those offers because I found most people don't end up tipping me in cash. It was more profi…

As a user there is a strong pull not to tip after paying the premium for the initial service. For example an order for a $10 burger costs $20 and is delivered cold, I don't really want to tip for that. But then the driver shows up and its some down on his luck father lugging his son around because he can't afford child care, of course I'm going to tip every driver I see from then on (and feel ashamed for using the service in the first place).

Either consumer tolerance for convenience spending is going to break, or the prices will just keep going up astronomically as a perverse form of inflation (indirectly suppressing all jobs who's compensation isn't similarly skyrocketing).

Re: What DoorDash pays, after expenses, and what’s happening with tips

#508

Post by xyzzyz »

boh wrote: post #496
Balgair wrote: post #463

Earlier quoted context omitted.

I recently got into EconTalk and burned through a few of their podcasts [0]. Roberts mentions his 'distain' for the minimum wage a fair bit during the shows. Many economists do not like the minimum wage at all for many reasons. However, with these gig economy jobs, there effectively is no minimum wage. Yes, things are murky here about the definitions of wage, employee, boss, etc. But the effective hourly rates are al…

There's no such thing as "real" minimum wage since the factors that result in having minimum wage must be included (taxes/regulations/cost of living etc). Just as looking at the wages of illegal immigrants doesn't represent the "real" economy, the gig economy, whose companies largely operate under artificial, VC inflated markets, and depend on heterogenous labor markets,can't gage "real" wages. If you're wondering ho…

Average wage for a day laborer in mid 19th century US was roughly equivalent in purchasing power to what you today get in food stamps. The UBI is already here, you just have to go back to mid 19th century lifestyle.

Re: What DoorDash pays, after expenses, and what’s happening with tips

#509

Post by pyrale »

Balgair wrote: post #463
boh wrote: post #341

It's becoming abundantly clear the real innovation from on-demand services (including ride-sharing companies), is their ability to transfer more money from labor to capital with complex pay structures. For many if not most of these companies, its their only means towards profitability. For instance, any rise in revenue Uber experienced in the last 3 years was exclusively due to cuts in pay for drivers. Tech has long…

I recently got into EconTalk and burned through a few of their podcasts [0]. Roberts mentions his 'distain' for the minimum wage a fair bit during the shows. Many economists do not like the minimum wage at all for many reasons. However, with these gig economy jobs, there effectively is no minimum wage. Yes, things are murky here about the definitions of wage, employee, boss, etc. But the effective hourly rates are al…

The thing is, we had already been there. We know what happened then.

These economists say what they need to say to get paid.

Re: What DoorDash pays, after expenses, and what’s happening with tips

#510

Post by pyrale »

xyzzyz wrote: post #508
boh wrote: post #496

Earlier quoted context omitted.

There's no such thing as "real" minimum wage since the factors that result in having minimum wage must be included (taxes/regulations/cost of living etc). Just as looking at the wages of illegal immigrants doesn't represent the "real" economy, the gig economy, whose companies largely operate under artificial, VC inflated markets, and depend on heterogenous labor markets,can't gage "real" wages. If you're wondering ho…

Average wage for a day laborer in mid 19th century US was roughly equivalent in purchasing power to what you today get in food stamps. The UBI is already here, you just have to go back to mid 19th century lifestyle.

"Bad statistician drowns in 10-inch-average deep river."
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