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Doordash and Pizza Arbitrage

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Re: Doordash and Pizza Arbitrage

#31

Post by MattGaiser »

dvduval wrote: post #16

Lose a few 100 million today for a monopoly next year. I make the assumption here that these delivery services are intent on dominating the search results so that independent restaurants are not able to compete. They are forced into using the services, or rather having a large majority of other orders coming from these services.

>rather having a large majority of other orders coming from these services.

DoorDash has managed to change my behavior to the point that it is where I do when I am hungry, so I can see that being viable for a portion of the population.

Re: Doordash and Pizza Arbitrage

#32

Post by 9nGQluzmnq3M »

bransonf wrote: post #15

Reading the title, I anticipated this was going to be something along the lines of getting Domino's delivered for less than their delivery fee. (Side note, does anyone actually order franchise pizza on an app? They all already deliver for far less) But this was far more interesting. The fact that Doordash scrapes prices, and apparently doesn't verify... how does this happen? I'm not familiar with the reimbursement mo…

> The fact that Doordash scrapes prices, and apparently doesn't verify... how does this happen?

It kind of happens by default if your goal is "growth at any cost".

The video you mention is likely this one, and it's actually even more extreme: https://www.youtube.com/watch?v=bqPARIKHbN8

The fake restaurant in their garden shed, which never took customers or delivered any food, climbed up to #1 best restaurant in London (!) in TripAdvisor's rankings, purely on the strength of fake reviews and fake photos (artfully arranged closeups of bleach tablets etc). For kicks and video gold, they did open for their last night, serving 1-pound microwave meals from the supermarket.

Re: Doordash and Pizza Arbitrage

#33

Post by imgabe »

jabbany wrote: post #10
noad wrote: post #8

This is so asburd it feels like a story in bad movie. We have pushed finance & capital so far into the realm of fiction that it doesn't really make sense anymore. Artificial growth for the sake of artificial growth, just so you can get to your exit and leave someone else holding the bag. Ponzi schemes at massive scale. How did the startup/VC world become so entangled in all this bullshit capitalism?

I have a vague sense that this exact scenario with pizza was covered in the Silicon Valley sitcom...

It was, they use it to bankrupt another startup so they can acquire them (and their employees). I'm wondering now which one happened first...

Re: Doordash and Pizza Arbitrage

#34

Post by dangoldin »

This quote summarizes it all for me: "Amazon just bailed on restaurant delivery in the U.S."

If amazon, a "real" business with a reputation built on ruthlessly cutting margin can't get it to work why would anyone else?

Re: Doordash and Pizza Arbitrage

#35

Post by paulcole »

throwaway_dflka wrote: post #11
ed312 wrote: post #2

Do businesses have any recourse here? E.g. for the pizza situation - can a business ban DoorDash and its ilk?

It's an interesting question. I suspect there's some trademark arguments to be made regarding confusion as to who is providing the product and service and whose failures any mistakes reflect. That kind of attribution, and the product quality it promotes, is one of the central purposes of trademark law. But there's also the first sale doctrine--that after you sell your physical product, people can do with it as they p…

> But there's also the first sale doctrine--that after you sell your physical product, people can do with it as they please, including resell.

Yep! First sale doctrine applies to all transactions. This is why my gammy can resell her Oxy’s and it’s all nice and legal.

Re: Doordash and Pizza Arbitrage

#36

Post by Consultant32452 »

bransonf wrote: post #15

Reading the title, I anticipated this was going to be something along the lines of getting Domino's delivered for less than their delivery fee. (Side note, does anyone actually order franchise pizza on an app? They all already deliver for far less) But this was far more interesting. The fact that Doordash scrapes prices, and apparently doesn't verify... how does this happen? I'm not familiar with the reimbursement mo…

>does anyone actually order franchise pizza on an app

I do. I find the app to be a much nicer experience. I see all the available coupons/deals in a list instead of the 1-2 deals the phone person wants to guide me towards. With an app I can start and order and my family/friends can have an extended conversation to figure out exactly what we want on our pizza, what sides/drinks/etc. And in a pinch, we can completely start the order over from scratch if we change our plan mid-way. It would be rude to hold someone on the phone for that. Plus the app gives better real-time update on the status of my order. I know when it leaves the oven, when it gets picked up by the driver, etc.

Re: Doordash and Pizza Arbitrage

#37

Post by mlthoughts2018 »

dvduval wrote: post #16

Lose a few 100 million today for a monopoly next year. I make the assumption here that these delivery services are intent on dominating the search results so that independent restaurants are not able to compete. They are forced into using the services, or rather having a large majority of other orders coming from these services.

The problem is all these businesses (ride share, food delivery), have extremely low margins and the tech to spin up a competitor is extremely cheap and commodity.

Thus the “monopoly” you allegedly get later is deeply unsustainable at the profit level and scale required to recoup losses on any timescale that would work for investors, assuming you can even hold onto it in the face of constant reemergence of competitors.

This is what Naked Capitalism has been point out about Uber for years and years. Uber just keeps changing the story. First rideshare itself would be profitable. Then logistics and trucking would be a sexy new profitable area. Then self-driving cars, then food delivery.

It’s frankly just a Ponzi scheme at this point that was foisted onto unwitting retirement plan investors.

GrubHub / DoorDash / etc., are just more of the same.

You can’t take businesses like taxis or food delivery, with well understood economics, round trip costs, density requirements, low margins, etc., and just slap an app on top and make them somehow different than they really are.

Artificially increasing the supply of something that’s fundamentally not sustainable at that price just will not work.

Re: Doordash and Pizza Arbitrage

#38

Post by mlthoughts2018 »

MattGaiser wrote: post #31
dvduval wrote: post #16

Lose a few 100 million today for a monopoly next year. I make the assumption here that these delivery services are intent on dominating the search results so that independent restaurants are not able to compete. They are forced into using the services, or rather having a large majority of other orders coming from these services.

>rather having a large majority of other orders coming from these services. DoorDash has managed to change my behavior to the point that it is where I do when I am hungry, so I can see that being viable for a portion of the population.

Until the prices inevitably rise back up to the level they require to make up for the massive losses. Then that’ll just drive your behavior right back, probably much much faster than it took for DoorDash to establish this, meaning the “monopoly mode” profit time will be so short-lived as to recover next to nothing of the losses.

Re: Doordash and Pizza Arbitrage

#39

Post by xuki »

coderholic wrote: post #9
ed312 wrote: post #2

Do businesses have any recourse here? E.g. for the pizza situation - can a business ban DoorDash and its ilk?

The pizza business is the one making the profit here, at doordash's expense. It'd presumably be trivial for doordash to fix this, by checking the order amount against the cost. The article explains why they might not be doing that ("growth")

The problem is some customers received the pizza cold, and instead of blaming DoorDash, they blamed the restaurant. It's very misleading when DoorDash resell a product and pretend like the restaurant is actively participating in that process. I personally would not hesitate to ramp up the "self ordering", just to f* with DoorDash.
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