Meals on food delivery apps can be 90% more than if bought from the restaurant • Hacker News Board

Re: Meals on food delivery apps can be 90% more than if bought from the restaurant

#51

Post by gallamine » Thu, Feb 27, 2020, 2:53 PM UTC

AlexandrB wrote: post #38

SN76477 wrote: post #33

Food delivery in its current form will be short-lived. It is a 4 party system where the company controlling the money is the only one that wins. Restaurants are asked to pay 30% of the ticket. The customer is asked to pay more than expected for their meal, a delivery fee, and a tip. For the customer, this can be nearly double for a simple $10 lunch. The driver that has to deliver it gets stuck with fuel, automatic, a…

> Restaurants are asked to pay 30% of the ticket. I was not aware of that. I can see the logic (“we’re providing a service for your business”, etc.) but it feels like double dipping. Especially since it seems as though that cost is passed straight onto the customer anyhow.

The reasoning is that restaurants are using this money for advertising - either they pay to mail out fliers or they pay for listing in the online aggregator. It's a very similar model to paid ads in search engines.

Re: Meals on food delivery apps can be 90% more than if bought from the restaurant

#52

Post by cik » Thu, Feb 27, 2020, 2:54 PM UTC

I find the niche answer to this fascinating. With kosher restaurants (captive audience) in my city:

1. They increase their prices on skipthedishes and friends, in order to account for the price difference.

2. They add a piece of paper to EVERY ORDER indicating that if you call or text your food would be 30% cheaper, which includes a flat $3 delivery fee, and no need to tip the driver.

3. Many of them run targeted sub-brands on these platforms, under 'regular' (re: non kosher) restaurants and do the exact same thing, thereby expanding their reach.

Re: Meals on food delivery apps can be 90% more than if bought from the restaurant

#53

Post by vector_spaces » Thu, Feb 27, 2020, 2:55 PM UTC

SN76477 wrote: post #33

Food delivery in its current form will be short-lived. It is a 4 party system where the company controlling the money is the only one that wins. Restaurants are asked to pay 30% of the ticket. The customer is asked to pay more than expected for their meal, a delivery fee, and a tip. For the customer, this can be nearly double for a simple $10 lunch. The driver that has to deliver it gets stuck with fuel, automatic, a…

I do consulting work in the grocery business and serve as a point of contact for software and tech purchasing for a handful of retailers and producers.

Uber Eats has been calling me every year to sell their platform to some of the stores I work with.

Grocery product margins are about 30 percent in the happy case (specialty foods), usually much lower. Uber Eats wants 30 percent of the basket on each sale they make.

The last salesperson who called, after I gave him that context, suggested this would be a new revenue stream. I remarked that we would lose money on each sale. He clarified that Uber Eats would only take 30 percent of what we sold through their platform, not all of the sales made by the store (how generous of them). I thanked him for clarifying and said I understood that.

He then suggested to me that customers who buy from us on Uber Eats might do so only once, and make the rest of their purchases in store.

I asked him why they would do that, and he uncomfortably said a few words about how Uber is working on something for grocery stores and said they would try back later.

They have reached out to me about once a year since 2016, and pretty much every conversation goes the same, and their pricing is the same.

It's ridiculous to me how they don't bother to understand the customers they engage, and that they train their sales people to continue goad businesses into working with them even after they've made clear they would lose money. Either way, it's very clear to me that this model is indeed going to be short lived. It depends primarily on weaknesses in labor laws and operators being swayed by their bizarre sales pitches enough to act against their own bottom line. In any case I certainly won't be sad to see it crash and burn

Re: Meals on food delivery apps can be 90% more than if bought from the restaurant

#54

Post by lowercased » Thu, Feb 27, 2020, 2:56 PM UTC

what I want is a simplish way to text a restaurant my main basic wants, have them call me back via voice to confirm and make any adjustments, then I go pick it up. or... maybe delivery (I don't live in an area where delivery is huge but maybe that a gotta-have in some places).

I don't like calling because I'm always put on hold - call me back within 2-3 minutes, when you're actually calling me, vs me interrupting you. confirm the basics of what I texted you, but if you have a special going, or i ordered a 'wrong' size, etc. fix it. confirm price. send back via text.

you can 'own' the relationship then, without a middleman. you can confirm via voice, do your upsells, warn me of any delays, etc.

Re: Meals on food delivery apps can be 90% more than if bought from the restaurant

#55

Post by ghaff » Thu, Feb 27, 2020, 2:56 PM UTC

anonsivalley652 wrote: post #40

SN76477 wrote: post #33

Food delivery in its current form will be short-lived. It is a 4 party system where the company controlling the money is the only one that wins. Restaurants are asked to pay 30% of the ticket. The customer is asked to pay more than expected for their meal, a delivery fee, and a tip. For the customer, this can be nearly double for a simple $10 lunch. The driver that has to deliver it gets stuck with fuel, automatic, a…

And it's not a defensible business model because anyone can start such a company with very little expenses. I remember using waitersonwheels.com in the mid 90's and it wasn't any better than what's available now. Also, I know waiter.com has been around a long time and makes very good money. Perhaps the SF Bay Area is a unicorn where there are so many people with disposable income that their time is worth more than ov…

In general, food delivery doesn't work well well in rural areas. Where I live is more ex-urban than rural and I'm just 40 miles from a major city and almost next door to a couple minor cities. But I have very few delivery options.

I apparently have a few more these days through a couple of the online delivery apps although I haven't used them yet.

Re: Meals on food delivery apps can be 90% more than if bought from the restaurant

#56

Post by danShumway » Thu, Feb 27, 2020, 2:59 PM UTC

cik wrote: post #52

I find the niche answer to this fascinating. With kosher restaurants (captive audience) in my city: 1. They increase their prices on skipthedishes and friends, in order to account for the price difference. 2. They add a piece of paper to EVERY ORDER indicating that if you call or text your food would be 30% cheaper, which includes a flat $3 delivery fee, and no need to tip the driver. 3. Many of them run targeted sub…

> They add a piece of paper to EVERY ORDER indicating that if you call or text...

That's really clever, given that many of these delivery apps work by inserting themselves invisibly in front of the business.

Having a communication channel that you know will reach the customer and that you know the delivery app can't block is a way of getting around some of the constant fight of "how do I make my real site show up above Grubhub's when my name is Googled?"

Re: Meals on food delivery apps can be 90% more than if bought from the restaurant

#57

Post by buildsjets » Thu, Feb 27, 2020, 3:00 PM UTC

justanotherc wrote: post #7

This is why I have never ordered UberEats. Plus cold McDonalds is gross. Its not hard to order takeout and run down the road myself. To be honest I don't really get why this whole trend is so popular.

I had a terrible week-long flu a few weeks ago, and used Uber Eats several times. It was my first using a food delivery service, but I do use Uber for rides every few months or so. It was much better than trying to forage in my pantry. Cold McD’s is gross, but so is hot McD’s, so I ordered from our local Thai restaurant quite a bit. Phad See Ew reheats just fine.

Re: Meals on food delivery apps can be 90% more than if bought from the restaurant

#58

Post by JCharante » Thu, Feb 27, 2020, 3:01 PM UTC

pcurve wrote: post #47

SN76477 wrote: post #33

Food delivery in its current form will be short-lived. It is a 4 party system where the company controlling the money is the only one that wins. Restaurants are asked to pay 30% of the ticket. The customer is asked to pay more than expected for their meal, a delivery fee, and a tip. For the customer, this can be nearly double for a simple $10 lunch. The driver that has to deliver it gets stuck with fuel, automatic, a…

Compared to South Korea, the company's take is insane. SK's minimum wage is $7+ and it's not unusual for delivery person to make $3000+/month. Customers pay reasonable fee of a few dollars and no tip.

And in Vietnam, Grab drivers can make the same as young professionals, leading some to start deliverying food or chauffering people around full time after graduating from post-secondary education. (~$600/mo, less than $1/hour from working at a cafe is normal).

Re: Meals on food delivery apps can be 90% more than if bought from the restaurant

#59

Post by jfengel » Thu, Feb 27, 2020, 3:04 PM UTC

anonsivalley652 wrote: post #40

SN76477 wrote: post #33

Food delivery in its current form will be short-lived. It is a 4 party system where the company controlling the money is the only one that wins. Restaurants are asked to pay 30% of the ticket. The customer is asked to pay more than expected for their meal, a delivery fee, and a tip. For the customer, this can be nearly double for a simple $10 lunch. The driver that has to deliver it gets stuck with fuel, automatic, a…

And it's not a defensible business model because anyone can start such a company with very little expenses. I remember using waitersonwheels.com in the mid 90's and it wasn't any better than what's available now. Also, I know waiter.com has been around a long time and makes very good money. Perhaps the SF Bay Area is a unicorn where there are so many people with disposable income that their time is worth more than ov…

You can start such a company, but there's an overhead in getting on the minds of users and restaurant owners.

Users don't want to have to keep multiple apps on their phone, or remember that the local Olive Garden uses OnlineFood but that the Greek place uses FoodNGo. We can have them order through the restaurant's web site and let them make the decision, but they're going to get frustrated if the drivers are fragmented across the different services. If every driver has every app, then it's really just adding overhead.

All people and restaurants want is somebody to get the food from point A to point B, without a lot of differentiation. Much like ride share services replacing taxis: people don't really care what they get, and multiple taxi services don't provide useful differentiators. I really think that taxis might have survived better if they had come together to develop an app instead of letting somebody else take that space.

As for prices... people are willing to pay to save time. If they really wanted to save money, they'd cook. People go to restaurants so they don't have to cook, but they still pay the time to go and sit and wait. Faced with a choice of $20 Olive Garden + $20 delivery fee, and wait at home playing video games, or $40 at the steakhouse sitting at a table waiting for their food, it might be a tossup. Lots of people do that today. If all they wanted was calories, they'd spent $5 at McDs.

Re: Meals on food delivery apps can be 90% more than if bought from the restaurant

#60

Post by AgloeDreams » Thu, Feb 27, 2020, 3:11 PM UTC

vector_spaces wrote: post #53

SN76477 wrote: post #33

Food delivery in its current form will be short-lived. It is a 4 party system where the company controlling the money is the only one that wins. Restaurants are asked to pay 30% of the ticket. The customer is asked to pay more than expected for their meal, a delivery fee, and a tip. For the customer, this can be nearly double for a simple $10 lunch. The driver that has to deliver it gets stuck with fuel, automatic, a…

I do consulting work in the grocery business and serve as a point of contact for software and tech purchasing for a handful of retailers and producers. Uber Eats has been calling me every year to sell their platform to some of the stores I work with. Grocery product margins are about 30 percent in the happy case (specialty foods), usually much lower. Uber Eats wants 30 percent of the basket on each sale they make. Th…

What is bizzare about all of this is that I honestly do think that when Amazon figures Drone Delivery all out they will basically eat everyone alive in the food delivery business. They totally will automate the storage and picking systems, do it in warehouses (that also do normal delivery and act as Go/ Whole Foods distribution networks) and the Drone systems will be AI piloted possibly with human oversight. (one human, 10 drones, they may also use fleets to ease air clearance)

Once they solve all of this you chop distribution to the store, shelf stocking, checkout staffing, picker payment, driver payment, property and lease fees, the margin will be higher, the experience faster, the costs lower.

I bet Amazon will mass produce the drones at a rather low cost over time, maybe produce UWB tracking devices (like Apple's Tags will use) so you can be hand delivered products without the landing pad they currently use. It's a real infinite game and that's okay if it all takes 10+ years.

I'm not saying this is a good thing for mankind, but might be a reality.