Our restaurants are failing. Why should food delivery apps thrive? • Hacker News Board

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

#171

Post by thatcat » Sat, May 16, 2020, 5:10 PM UTC

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…

I know an EE in the toilet paper manufacturing. The production rate wouldn't change in the time frame you want it to because it is impossible. You'd have to bring in new machines, set them up on the line (the rest of the line has to stop), and trouble shoot any issues - this reduces production in the short term. For any temporary price increase it just isn't going to happen.

So, raising the price on TP does nothing to increase supply in a 1 month time frame and reduces availability to the poorest. Instead, reduce demand with a bidet and limit customer purchases.

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

#172

Post by throwaway2048 » Sat, May 16, 2020, 5:10 PM UTC

thatcat wrote: post #158

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…

Continuing with that logic; the prevalence of beggars on street corners indicates that their patrons appreciate their presence in the space.

Also everyone loves customer service on airlines, the fact that it keeps getting worse is gold plated proof

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

#173

Post by haltingproblem » Sat, May 16, 2020, 5:12 PM UTC

crazygringo wrote: post #74

This article is misguided, based on a false premise. Food delivery apps are not thriving, if thriving means making big profits. GrubHub's stock price isn't much different from where it was 5 years ago. UberEats isn't expected to turn a profit for another five years as they continue to lose money on every order. There are no monopolies here taking advantage of restauranteurs. There's an entire ecosystem of food delive…

Grubless charges 20-30% for just ordering and checkout. In addition restaurants have to opt-in to promotions ($10 off $15) which are then passed on to them.

Delivery fees are on top of that if the restaurants choose to use Grub-less' delivery network. I dont know the breakdown but most I know use their own. Uber-eats is different.

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

#174

Post by coolswan » Sat, May 16, 2020, 5:13 PM UTC

softwaredoug wrote: post #3

Our city has some local restaurant driven “drop points” for getting lots of restaurant prepared meals at a margin better for restaurants. Please see if your city has something similar as an alternative to grubhub, etc

That's great; what city is this?

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

#175

Post by matthewdgreen » Sat, May 16, 2020, 5:14 PM UTC

scarface74 wrote: post #118

coffeefirst wrote: post #75

Earlier quoted context omitted.

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?

The market’s.

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

#176

Post by slfnflctd » Sat, May 16, 2020, 5:16 PM UTC

basch wrote: post #94

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…

Theres a nice friction removal for the customer. One account, only typing your credit card number in once, a consistent place to make a complaint or get a refund. Visa, Amazon, Apple, Google, or Paypal sort of provide that function, but being able to shop many restaurants with a single identity has its benefits. Something that wouldnt be fixed just by restaurants with nice websites.

One nice theory I've seen floated - which I believe has happened in some places - is for several local restaurants to split the cost of building & running a combined web store and/or app. If word gets around enough that this is a faster or cheaper overall experience, people will migrate. The only catch there is if the stores want to also continue taking GH/DD/UE orders, in which case the menus and branding might have to be different.

In the long run, I honestly think kitchen-only setups optimized for efficiency & food safety will grab a big share of the market. They can experiment with vertical integration, and avoid all the hassles & limitations of sit-down dining. They will be able to more, better, faster and cheaper. It might be hard to copy & paste the entire thing from one city to another, but the core functions should be quite portable.

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

#177

Post by nerfhammer » Sat, May 16, 2020, 5:16 PM UTC

aloukissas wrote: post #144

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…

But is there really competition? All platforms seem to charge the same outrageous fees to the businesses, we're not seeing competition driving fees down. It's more like a coordinated oligopoly with price-fixing.

Is it possible that delivery itself is actually inherently expensive?

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

#178

Post by scarface74 » Sat, May 16, 2020, 5:17 PM UTC

matthewdgreen wrote: post #175

scarface74 wrote: post #118

Earlier quoted context omitted.

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

The market’s.

How is “the market’s” fault that an individual restaurant won’t price its services correctly? Unlike VC funded startups, they can’t keep losing money and pawn off their business to the public.

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

#179

Post by spaced-out » Sat, May 16, 2020, 5:18 PM UTC

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…

I think you're underestimating how much it costs to maintain a global, distributed application that has a lot of money running through it 24/7.

You'll need legal teams to write up you contracts/TOS, and keep them updated in the face of changing laws and regulations. Site reliability engineers to keep everything running, and dedicated development teams for bug fixes and unavoidable application changes (say you realize there's a bug exposing customer data, you need that fixed now, not whenever you can find a contractor). Don't forget phone support.

When you factor in the cost of running the delivery app, plus about $10-15 per hour to pay the driver, which has to account for driving to the restaurant and to the customer, I'm not sure how much cheaper food delivery can be. It's already a competitive marketplace, and there's even small, regional apps, but I haven't seen any that are significantly cheaper in general (excluding things like temporary specials, deals with a restaurant chain, etc...)

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

#180

Post by nerfhammer » Sat, May 16, 2020, 5:20 PM UTC

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…

But aren't there like 2 dozen competing apps trying to do this? Shouldn't that drive prices down? Or is actually legitimately expensive to provide this service?

We've been told that evil VCs subsidize service to run at below cost to drive competitors out of business. Uber is often accused of this. Why aren't we seeing that phenomenon here? And Uber is literally one of the competitors.