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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?

#161

Post by MattGaiser »

jimktrains2 wrote: post #155
MattGaiser wrote: post #138

Earlier quoted context omitted.

> it's the job of the government to take over and make them And how that usually works is that the government offers to pay a very high price to someone willing to doing so. This isn't all that different as the government then pays 5x for the item.

It need not be a high unit price, often a sufficiently large order could do the same as well.

Depends on the timeframe. If you want 5 million masks next week and each machine produces 1 million a week, you need 5 machines. If you can wait 5 weeks, then one machine will do.

But yes, this certainly could be true.

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

#162

Post by dathinab »

MattGaiser wrote: post #86
dathinab wrote: post #65

Just a random idea: Maybe some people could setup a non-profit platform to connect delivery driver and restaurants and is focused on transparency? Operating such a platform shouldn't be to expensive. The major cost (I guess) lies in advertisement and paying people to actually do the delivery. I believe customer being able to see how much of the price goes to the platform, the delivery driver and the restaurant (maybe…

> paying people to actually do the delivery. I have both DoorDash and the Dasher app. I've seen the order I might regularly pay a $2.99 fee for (I don't as I have DashPass) be offered to drivers for $13 with a $4 tip. This was on a $30 order for two. How you pay for delivery is a major issue.

> Operating such a platform shouldn't be to expensive.

What I meant is the cost for the platform not the products and service on it. I.e. the costs to keep the app running and doing the bookkeeping on in the server.

The idea is that if it's hard to profitable operate platforms for food delivery if you properly pay the delivery person and the restaurant, then maybe it would be better to not try to do so and instead operate such a platform as a non-profit (or shared responsibility of a large group of restaurants) focused on connecting independent delivery personal and restaurants.

With that you would only have the service/app operational cost and if the area you cover is large enough you probably could have something like a fixed $1 or less cost per delivery (+food cost + delivery personal cost).

Naturally this also would mean you don't have money for doing much R&D or advertisement. So it would be in the responsibility of the restaurants to advertise that people can order online over that platform.

I.e. it would turn the whole delivery business conceptually upside down by putting the focus on the restaurants. Or you could say it's just going back to the roots.

I'm not sure if that could work in the US. But I think it has a chance of working in many EU countries.

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

#163

Post by john_minsk »

ramraj07 wrote: post #119
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…

I kind of agree, but on the other side - if 20-30% is too much there will be competitors which offer 2-3% and theoretically all restaurants will move there as well as customers to pay 20-30% less.

And tbh this should happen. UBER had to spend billions on marketing and getting their model "right". But now it is clear that such platform is essential for modern city. At some point UBER will have to get this money back with ride fees. Next competitor that can replicate UX of UBER, but raises less capital will be very well positioned to offer competitive pricing. And switching between these platforms is much easier compared to something like Facebook/Apple.

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

#165

Post by haltingproblem »

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…

With Google/Apple pay, I can order on most restaurant websites as easily as ordering on grub-less. Restaurant apps have a similar experience. Restaurants use third party services for apps/websites that provide experiences comparable to grub-less without the discovery platform. These services have a fixed price (<$100/mo) and reasonable card processing fees.

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

#166

Post by matthewdgreen »

crazygringo wrote: post #100
blancNoir wrote: post #81

Earlier quoted context omitted.

from the article "While neither Uber nor Grubhub turns a profit delivering food, they are nonetheless venture-backed and raking in mountains of cash: Grubhub reported revenue of $362.98 million during the first quarter this year, a year-over-year increase of more than 12%. Uber Eats’ revenue surged 53% from the same quarter a year ago, to $819 million. Restaurants, meanwhile, are facing utter devastation. The restaur…

Right, but "raking in mountains of cash" is skipping the "in the face of even larger mountains of costs". That's why this article feels deceitful -- using words like "raking in" and "surging" as if revenue before costs means anything at all. If you lose money on every order, you're not thriving in any sense. You're hoping to thrive some day in the future. The fact that they're venture-backed is irrelevant. Restaurant…

Most growth-oriented tech companies are “unprofitable” in the sense they invest their revenues into growth rather than dividends. This does not mean their core products necessarily make less money than it costs to operate them, without those massive growth investments. The real question people are asking here is: what necessary costs do the food delivery apps actually incur in operating their business that causes them to have such high commissions and fees and still lose money per transaction?

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

#167

Post by genericone »

true_religion wrote: post #152
pjc50 wrote: post #131

Earlier quoted context omitted.

The short term is too short: the investment won't pay back. Almost all profiteering reduces supply by causing hoarding and waste rather than use. Plus the dead weight loss of people killed by lack of PPE.

I agree if the disaster is truly short term, but is an 8 month rolling quarantine short enough to count?

If their supply chains are decimated, they won't receive new equipment for additional manufacturing.

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

#168

Post by krapp »

torstenvl wrote: post #87
krapp wrote: post #82

Earlier quoted context omitted.

>You couldn't order a taxi from an app Never needed to, I could just call them on the phone. >you couldn't figure out what the price was before ordering so there was no direct competition Sure I could, I would just ask them how much to get from point A to B. The price I was quoted was always accurate. >many localities had an anticompetitive licensing scheme on top of that Has no effect whatsoever on me as a customer.…

Calling on a phone works not so great in crowded and loud places. Quotes on the phone aren't in writing and I've never had them honored. "Oh that's just an estimate." Lack of competition has an effect on all customers. Nobody is exempt from economics.

> Calling on a phone works not so great in crowded and loud places.

Sure, but it works perfectly fine elsewhere, most people aren't calling the taxi from loud, crowded areas. Having an app is convenient but not having an app is hardly a horrible experience.

>Quotes on the phone aren't in writing and I've never had them honored. "Oh that's just an estimate."

The price I've been quoted has always been the price I paid. It's unfortunate that you appear to live in a wretched hive of scum and villainy but your personal experiences are hardly universal. There are plenty of places around the world where taxis work just fine.

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

#169

Post by haltingproblem »

john_minsk wrote: post #163
ramraj07 wrote: post #119

Earlier quoted context omitted.

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…

I kind of agree, but on the other side - if 20-30% is too much there will be competitors which offer 2-3% and theoretically all restaurants will move there as well as customers to pay 20-30% less. And tbh this should happen. UBER had to spend billions on marketing and getting their model "right". But now it is clear that such platform is essential for modern city. At some point UBER will have to get this money back w…

Good point. But Yes and no ;)

Grub-less et.al are as much about ordering and checkout as they are about discovery. I can rank and view all restaurants offering Sushi in my delivery radius. This is what makes them powerful.

Uber et.al are a marketplace. You are absolutely right in that they have zero switching costs but they have a two sided pool of supply (drivers) and riders (demand). This is hard to replicate.

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

#170

Post by randomgoose »

xenocyon wrote: post #153
mhh__ wrote: post #54

> why should I'm not a huge fan of moralistic takes on business. If you're selling something dangerous then that's wrong, but it's very easy to be blinkered from a high position. If people want to buy food in a certain way I can't really blame them - arguably the same with Uber and taxis, Uber has disrupted an industry which was fairly uncompetitive and politically charged (Their prevalence indicates the customers ap…

> prevalence indicates the customers appreciate their presence Focusing solely on consumers ignores negative externalities. There are many situations in which cost benefits from such externalities (slavery, pollution, human rights abuses, animal mistreatment) can lead to a favorable marketplace position vs competitors who do not exploit such externalities. What is more, many of these exploits (slavery, pollution, hum…

This is such a beautiful answer. I never thought of that, what we consider today as the absurd was knife the norm, so challenging the quo is so important
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