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Our restaurants are failing. Why should food delivery apps thrive?

latimes.com

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Re: Our restaurants are failing. Why should food delivery apps thrive?

#111

Post by gkop »

newacct583 wrote: post #27
haltingproblem wrote: post #6

They thrive because people are lazy - both restaurant and their customers. Restaurants can make a concerted effort to ask regular clients to order from their own websites/apps but rarely do even when they can make an extra 10-15% after giving the customers 10% off. Customers are lazy because inspite of all the talk of supporting local, they are too hooked on click-click-click and ordered. The delivery apps have hundr…

I think that's about the size of it. This seems like a "bad deal" to restaurants because they aren't really thinking of the problem correctly. Restaurants view having to sell a meal via GrubHub as selling a discounted meal, because the customer pays menu price but the delivery service charges a fee. So the restaurant makes less cash than they would to serve the same food to a table. And the reason they think this is…

Take out customers don’t order high-margin beverages in proportion to dine-in customers. In most of the US, restaurants cannot even sell the highest-margin beverages, alcoholic ones, to go. With the lost beverage margin, increased take out volume is at best a wash for most restaurants.

Re: Our restaurants are failing. Why should food delivery apps thrive?

#112

Post by tasty_freeze »

MattGaiser wrote: post #97
tasty_freeze wrote: post #88

Earlier quoted context omitted.

You misunderstand the difference between profiting and profiteering. Nobody is claiming companies should sell toilet paper at cost, but they are saying toilet paper shouldn't get 5x more expensive.

But that constricts the supply because if you want to make a short term investment (the length of the pandemic) to increase the supply of home toilet paper, you can't as that investment can't generate a return. Most production is based on demand being there for 5+ years the current prices. If home toilet paper demand will only be high for 2 years you can't make money. You also want prices to increase to discourage ho…

That is addressing a different point. The comment I was responding to claimed people were upset that companies are making a profit. I countered that profit is OK, profiteering is what has people irate.

What is the ideal pricing to achieve long term goals wasn't something I was addressing.

Re: Our restaurants are failing. Why should food delivery apps thrive?

#114

Post by coffeefirst »

JMTQp8lwXL wrote: post #18
haltingproblem wrote: post #6

They thrive because people are lazy - both restaurant and their customers. Restaurants can make a concerted effort to ask regular clients to order from their own websites/apps but rarely do even when they can make an extra 10-15% after giving the customers 10% off. Customers are lazy because inspite of all the talk of supporting local, they are too hooked on click-click-click and ordered. The delivery apps have hundr…

The home-grown app in Tulsa will never have the capital for marketing and sales reps that allow it to capture a healthy market share of restaurants. And if they do somehow make it, once they become the market leader, they're going to start asking for a larger portion of the pie. That's how business works, be it in Tulsa or SV.

> That's how business works, be it in Tulsa or SV

Um, no. Most businesses seek growth by trying to offer new/upsold products and services rather than trying to squeeze their customers for the same service.

Re: Our restaurants are failing. Why should food delivery apps thrive?

#115

Post by scarface74 »

haswell wrote: post #47
enitihas wrote: post #14

Earlier quoted context omitted.

Restaurants might not be lazy in their core business functions, but that doesn't make them non lazy on other matters.

You need to find a different word that isn't "lazy". Perhaps a better way to say this is: restaurants are good at being restaurants, but aren't always good at establishing an online presence. A big part of why these delivery services succeed is that they provide a function that restaurants aren't well suited to provide on their own. This isn't about being lazy, it's about an industry needing to adapt to the new expec…

A restaurants entire purpose is to provide food for people that’s more convenient than the alternative. If they can’t do that, there is no reason for them to exist. If they can’t survive, someone who can come up with a business model that meets the needs of consumers will take their place.

Times change and circumstances change. Businesses either evolve or get replaced.

The problem now is that delivery services are being subsidized by VC money or however Uber is getting new money after their IPO.

Re: Our restaurants are failing. Why should food delivery apps thrive?

#116

Post by dathinab »

kevindong wrote: post #20

> While neither Uber nor Grubhub turns a profit delivering food, they are nonetheless venture-backed and raking in mountains of cash The author acknowledges that the delivery services are losing money. And yet, the author is essentially saying that the apps should lose even more money because someone else is willing to fund the apps.

It's not that simple.

First we need to know why they don't turn in a profit. Potential reasons include:

- Because they pay to the people delivering (I don't think so).

- Because keeping the app running is to expensive, i.e. server costs (I don't think so to).

- Because they payed a lot upfront to create the app and are still paying it of (Maybe, still unlikely, this would have been their own mistake and go away after some time).

- Because they are spending to much on "external" cost, like advertisements (likely).

- Because they know they don't have to yet make profit so they take maximal advantage of venture capital by reinvesting much profits in R&D and similar (somewhat likely)

- Because they are selling a service for to little to the end customer, i.e. making losses to "kill of" competition by taking advantage of venture capital (I think that's the main point).

The thing is paying people to deliver stuff is expensive just the wage which needs to be payed can noticeable increase the price and doing much advertisement isn't cheap either.

So normally I would expect +

Or alternatively + +

But what we see is prices nut much higher then restaurant, not limited to close proximity, no or low min amount.

So someone has to pay for it, and by using a combination of intransparency and their (perceived) marked power they force a not small amount of the cost they have to operate somewhat profitable onto the restaurants...

Which is the actual problem I think.

Re: Our restaurants are failing. Why should food delivery apps thrive?

#117

Post by dehrmann »

vdnkh wrote: post #90
swiley wrote: post #68

Earlier quoted context omitted.

Yeah I feel like the “people shouldn’t profit from catastrophe” thing is a big part of why it’s still hard to get PPE (no one can justify extra manufacturing etc.)

> (no one can justify extra manufacturing etc. In cases where the free market isn't incentivized to make the supplies we need, it's the job of the government to take over and make them. "Profiting from catastrophe" as you put it will result in price gouging.

In the US, especially at the current federal level, the market is better at making a profit than the government is at governing.

Re: Our restaurants are failing. Why should food delivery apps thrive?

#118

Post by scarface74 »

coffeefirst wrote: post #75
MattGaiser wrote: post #15

Earlier quoted context omitted.

> payment processing (3%) + 2-3% overhead. Is that anywhere near enough to actually pay for a delivery? I have both the Dasher app and the DoorDash app. That delivery I pay $2.99 for leads to the Dasher often being offered $13 on a $30 order with a $4 tip.

Definitely not. But the problem is not that delivery realistically may cost $10-15 to pay for itself, it's that it's coming from the restaurant's margins and being hidden from the customer. If the fees were real, the restaurant wouldn't need to care about pickup vs delivery, but the apps would lose some business because $15 is a good reason to do pickup.

Whose fault is it that restaurants aren’t pricing their services correctly?

Re: Our restaurants are failing. Why should food delivery apps thrive?

#119

Post by ramraj07 »

orev wrote: post #37

Apps are doing well because they are solving a real problem — translating restaurants’ abysmal web sites, PDF menus, and awful online ordering experiences to apps that “just work”. If restaurants put any effort at all into fixing those things, there would not be such a strong demand for apps. Obviously this is different for different restaurants, and the skill set needed to run a restaurant is vastly different from r…

Apps are doing well because this is another one of those protective moat ideas where once they have established themselves they have no need to innovate further. Sites like grubhub have no physical reason to gouge 20-30% commission on top of charging both sides delivery fees (further on top of guilting customers into tipping more). In the end it's an app serving a few web pages and APIs (these filthy companies don't even deal with the credit card mess).

But because they have an insurmountable most (not earned via any sheer technical breakthrough, just through cunningness and being ruthless) they don't need to care if they have too many engineers,whether these engineers are any good, or if their nodejs ec2 instances serve 100 queries a minute. So they just keep it like that.

Companies like IBM needed decades to get into such a rot, modern VC funding and cloud computing have just accelerated this phenomenon.

Re: Our restaurants are failing. Why should food delivery apps thrive?

#120

Post by eplanit »

orev wrote: post #37

Apps are doing well because they are solving a real problem — translating restaurants’ abysmal web sites, PDF menus, and awful online ordering experiences to apps that “just work”. If restaurants put any effort at all into fixing those things, there would not be such a strong demand for apps. Obviously this is different for different restaurants, and the skill set needed to run a restaurant is vastly different from r…

Exactly. It's been a necessary thing since for a while now, in fact. This was an issue before C-19 -- it's just more obvious now.
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