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

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

#271

Earlier quoted context omitted.

That assumes consumers actually have a choice to make in the situation. For example let's say you disagreed with how Comcast throttles the internet or behaves in monopolistic behavior. Your only option to make the moral choice is to simply not have internet at all in certain regions. A more topical one might be if you disagree with a company using sweatshop labor. Figuring out which companies engage in sweatshop labo…

Comcast is in a position to throttle the internet because voters voted against the interests of the consumers. Specifically, the voters restricted other market participants from competing with Comcast. So the consumers are not acting in their own best interest as consumers and they're not acting in their own best interest as voters. Why is Comcast on the hook? With regards to the sweatshop labor: if you care not to b…

For your first argument: Isn't that argument absolving companies of all blame possible? If a company for example chooses to dump waste in a local river and there aren't any laws preventing that, is that because of the consumers failing to act in their own best interest? I just want to establish according to your logic at which point a company should be blamed for immoral behavior.

It's also overly reductive and ignores things like voter suppression, extralegal affairs and abusing the court system.

For your second argument, you seemed to ignore my original point which is that it's generally impossible to actually establish the origin of said clothing due to the complex supply chain behind the scenes. Even if it's a trusted third party, that clothing is still being delivered via companies that deliver sweatshop clothing and sold in stores which sell sweatshop clothing. At a certain point some percentage of what you pay will go to support said sweatshops whether directly or indirectly, so how can you expect a consumer to operate in a full moralistic behavior when all of their actions are losses? At that point the only winning move is to not play, which is also not possible because, well, Capitalism.

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

#272
post #94
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.

The downside is that that one middleman often has incorrect menus, and if there are any issues it then becomes a he-said she-said they-said juggling act with the service, the restaurant, and the driver blaming each other for any problems. The drawbacks balance out the benefits of having one central service, in that way. But that's not everything.

The best part is actually just having a variety to order from. Before these delivery services, there were only a couple of pizza places and a couple of Chinese restaurants and nothing else delivered.

For a lot of restaurants, it never made business sense to deliver, and still wouldn't. But when the delivery service is spread out over many restaurants, it works rather well. That's good for both the businesses and the customers, despite the friction added by the middlemen. It's a real win for people who couldn't as easily go out to eat, due to health or disability or whatever, but also for everyone else.

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

#273
post #212

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 don't think you really understand how software works. No software has a "physical reason" to ask for money once they are done. It's really a terrible argument that you seem to try and turn into a quip against delivery apps. Your moat argument is the same that had people invest in uber 10 years ago, which we are seeing is failing in regions like EU where Uber is getting lambasted.

If you'd invented in Uber 10 years ago, you'd be rich. Let's say you paid $5 (though it's probably closer to $0.01 if you got in on their seed round in Sept 2010). With 250k shares, even at the "abysmal" price of $45/share, that's still a cool $10 million, before taxes. As a seed investor, you liquidated on the day of the IPO and what happens to Uber no longer particularly matters to you - you've already made a giant pile of money. It's interesting as a point of curiosity. Like updates on a friend/acquaintance's cat.

Of course, you'd have to be rich in order to have done that in the first place (an "accredited investor" as defined by the SEC), and this ignores the other investments you made in 2010 that went bust.

Later investors got screwed by the poor IPO performance, especially those that bought, hard, into the "moat" argument. Hell, softbank is possibly underwater on its investment.

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

#274
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…

If you look at the numbers delivery apps are not doing well they are yet to make a profit, its a failing business. They are burning investor money for instance in UK Deliveroo Lost $244 Million in 2017, $284 Million in 2018 perhaps the same in 2019. Delivery is at current rate an unsustainable profitability problem. And I dont think it would change unless we have drone deliveries.

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

#275
post #216

Earlier quoted context omitted.

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.

I would not be surprised if the US market had some level of collusion going on. It just doesn't make sense to me that they aren't currently competing on price. There are some other possible reasons tho, like food actually not being as "commodity"-like as we think it is (like rides are)

It's possible collusion is a factor, however another observation I've had could explain it: the VC-finance industrial complex - in that there are dominant incumbents who have so much profit that they simply buy any up and coming new competitors in the market, to which the founders and VCs are happy for that payday. Or you have two big companies doing mergers, giving multiple advantages including a bigger pool of profits/revenues to leverage and outbid their other large competitors in the market. This is the main reason that they're all able to continue to charge arguably unreasonable and unnecessary fees to restaurants, because the barrier to entry is heavily having enough funds to build such a platform - and the gatekeepers are in the VC industrial complex where most want unreasonable returns (requiring unreasonable, excessive fees and other grey or dark practices) and an exit event in 10 years.

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

#276
post #94
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.

And for that, Visa ask for about 1.5% of the transaction, not 20/30%

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

#277
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…

> If restaurants put any effort at all into fixing those things, there would not be such a strong demand for apps

What about the delivery part of the problem? Everyone does realize that Seamless etc. actually provide the delivery staff for many of the restaurants on the platform, right?

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

#278

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…

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.

VCs don't subsidize the transaction cost (unit economics), they subsidize the (customer) acquisition cost. That is to say, they don't want you losing money on the execution of the transaction, but if the sum total of net revenue from a customer's transactions don't equal the cost to acquire (market, etc.) the customer -- there's the subsidizing.

If you went to a VC with a model for a food service delivery taking less than 30% of the transaction, they'd more than likely pass. 30% is the bar that's been set, and your unit economics have to be as good or better than the existing players. They're not keen on investing in "just a cheaper version of something that already exists." -- If you're marketing yourself as "cheaper," it has to because some innovation has eliminated more cost out of the transaction than you have eliminated in net revenue.

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

#279
post #261
post #249

Earlier quoted context omitted.

I buy from Amazon instead of other retailers because Amazon has almost-always free shipping for Prime members, a consistent (and fast) website experience I know how to use, and great customer service. Some retailers have good websites (most don't), but I've always found issues like: slow shipping, having to create an account, spam from the retailer, poor customer service, etc.

...And now amazon is a habit, and you probably won't even consider going direct to a retailer.

[deleted]

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

#280

Does anyone think these food delivery companies are ever going to go away? I mean the restaurants don't seem to like them, the delivery people are pissed, vcs are burning money, and through all this these huge companies are still having a trouble turning a profit. This doesn't seem to be working for anybody except maybe the consumer who is just currently subsidized directly and indirectly through all the above partie…

In Portland there are efforts from local businesses to form their own delivery consortiums, such as https://www.pdxccc.com/restaurants.html

Oh, and I wanted to add a company I was looking for when I made this post.

https://atyourdoor.co/ does delivery for a lot of local distilleries.

I think this local consortium thing is the way a lot of smaller businesses will go.

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