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

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

#181

Post by bergstromm466 » Sat, May 16, 2020, 5:21 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…

They definitely are thriving. They will survive the lockdown, and it will help their market share. This always leads to monopolizing and later abuse of that monopoly position. We've got a beautiful history of labour movement, let's return to some earlier precedents.

In this world, your world, we have somehow become accepting of Amazon workers working in cages and peeing in bottles because they do not get sufficient breaks. A world where single mothers work three jobs to sustain their family.

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

#182

Post by blondin » Sat, May 16, 2020, 5:21 PM UTC

dvtrn wrote: post #107

blondin wrote: post #57

Earlier quoted context omitted.

what OP describes makes sense to me. but you are right, it is perhaps not laziness. it's a case of not knowing how to do it. i mean why isn't dominos, pizzahut, etc. teaching them how to do delivery? with everything going on, with these apps not helping restaurants, i decided to stop using these apps and go get my food myself. i only use apps when i get lazy like OP says.

To your point, Dominos is . Their pizza order tracker is open source [1]. The code is now two years old but I thought it was really cool of them to even do this in the first place. [1] https://github.com/nikolas/dominos-pizza-tracker (I’m still hunting the original article where this was announced, the first version they released I’m pretty sure was linked here on HN in the mid 10’s?)

oh wow, thanks for sharing!

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

#183

Post by BubRoss » Sat, May 16, 2020, 5:22 PM UTC

haltingproblem wrote: post #141

BubRoss wrote: post #125

Earlier quoted context omitted.

> Does a company indulging in non-coerced commerce (i.e. voluntary) make it virtuous? No, the reward is money/resources and the person wasn't implying the polar opposite of the article. You are creating a false dichotomy here by trying to split things into good or bad. There is a neutral position that you don't have to be invested in. > Why is questioning the efficacy, for society, of the economic models of any compa…

The parent opens with saying - I am not a fan of moralistic takes on business. I did not create the dichotomy, the parent did!

They are saying the exact opposite. They don't like assigning a moral judgement either way to a business that isn't hurting anyone. You were replying as if they had said that instead of something being bad, it was good. That is not the same thing. Treating something as neutral is not the same as saying something is an opposite.

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

#184

Post by kgantchev » Sat, May 16, 2020, 5:22 PM UTC

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…

I don't think the poster used legality as the moral compass, rather, consumer choice was the moral compass.

If consumers lack the moral conciousness on their day to day transactions, then how can we expect them to make the right moral choices when they vote?

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

#185

Post by Retric » Sat, May 16, 2020, 5:22 PM UTC

lotsofpulp wrote: post #157

Retric wrote: post #92

Earlier quoted context omitted.

IMO some price increase is a good idea to discourage hoarding, promote investment, and promote alternatives like a bidet. But, I think you achieve most of that with simply doubling prices, after that it’s generally more harm than good.

> But, I think you achieve most of that with simply doubling prices, after that it’s generally more harm than good. How can one make such a vast claim without knowing things such as cost of input materials, machinery, labor, etc?

The profit in a competitive market is usually ~5%. Double prices while selling out and profit increases by 21x if not vastly more which is a huge incentive. To the point where doubling the profit again is unlikely result in meaningfully increased production.

PS: And yea it’s more complex than that, you can generally skip out in advertising but may be paying significant overtime etc. But that’s rarely particularly important as there are so many inputs involved in ramping up production that you hit multiple different limits.

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

#186

Post by matthewdgreen » Sat, May 16, 2020, 5:22 PM UTC

scarface74 wrote: post #178

matthewdgreen wrote: post #175

Earlier quoted context omitted.

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.

It’s a ruthlessly competitive business with single-digit margins. A restaurant that prices its services higher often becomes an ex-restaurant.

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

#187

Post by dathinab » Sat, May 16, 2020, 5:24 PM UTC

vinay427 wrote: post #83

JCharante wrote: post #41

The industry in the US is ridiculous. In a different country my friends run a newish (7 months?) cafe where they aren't on any apps. Instead you can send them a facebook message or call, and they will dispatch a shipper to you. They will then send one of their baristas who aren't busy, or if necessary they've built up a list of delivery drivers who like to hangout near their restaurant, they "sell" the food to the sh…

This is definitely not limited to the US, for what it's worth. The type of informal arrangement you describe seems rather undesirable if we're trying to enforce safety and labor regulations, tax collection, etc. I'm sure there are some exceptions but where I live as well as in other western European countries in which I've looked into food delivery, there were companies that operate an app-based platform, similar to…

I have seen similar business model in Germany.

Basically small shops doing 40-80% of their revenue by delivery but limit delivery to places reachable shortly with a scooter and min amounts of 20€ or so.

This shops then have their own delivery person working part time for them and when they have many orders or orders at times where the delivery person doesn't work they order an external delivery person (and then often make very little profit with that delivery).

The only difference is that you pay the company and they pay the delivery personal.

Orders are mostly done per phone. And payment mostly done in cash. Through often the delivery personal has a mobile card reader, too.

Through we also have US stile apps, with similar problems (but better labor laws, so at least wrt. employee abuse they tend to be slightly less terrible).

(Ref: Germany, Berlin)

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

#188

Post by projektfu » Sat, May 16, 2020, 5:25 PM UTC

Diversity loss is a problem. A too-strong middleman will eventually cause roll up in the field to businesses with enough size to have bargaining power.

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

#189

Post by almost_usual » Sat, May 16, 2020, 5:29 PM UTC

kgantchev wrote: post #184

xenocyon wrote: post #153

Earlier quoted context omitted.

> 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…

I don't think the poster used legality as the moral compass, rather, consumer choice was the moral compass. If consumers lack the moral conciousness on their day to day transactions, then how can we expect them to make the right moral choices when they vote?

What? You don’t think people give more thought to who they vote for than buying a burrito?

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

#190

Post by crazygringo » Sat, May 16, 2020, 5:31 PM UTC

matthewdgreen wrote: post #166

crazygringo wrote: post #100

Earlier quoted context omitted.

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 the…

> This does not mean their core products necessarily make less money than it costs to operate them

Generally, yes it does. The up-front costs for building and marketing a platform so that it ultimately becomes profitable are enormous. In today's climate, the idea that a company could just "choose" to be profitable now and in the long-term rather than grow is disingenuous: over the following few years, other companies will eat their lunch and they'll fold.

But with delivery apps, answering your question is not hard. First, paying delivery people is expensive. Crazy expensive. That's obviously the main variable cost. Then there are huge fixed costs with creating and maintaining a multi-platform app, customer service to deal with late/missing/wrong orders, sales and support for restaurants, marketing, and all the normal business stuff.

That's your answer. Food delivery apps aren't spending half their revenue on frivolous side projects like space rockets or cities of the future, or questionably/fraudulently siphoning revenue to a founder. They're just trying to operate as normal businesses, and there's zero evidence to the contrary.