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Doordash and Pizza Arbitrage

themargins.substack.com

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Re: Doordash and Pizza Arbitrage

#71

Post by spurdoman77 »

Spooky23 wrote: post #17
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?

Same way they did in the 90s, lots and lots of dumb money. My son and i have a tradition when my wife attends a nonprofit board meeting every other month. She leaves and we order some five guys on doordash while we play a PlayStation game. I use a new email every time and usually get free delivery and a coupon. Doordash loses, Five Guys loses, and we get some dude to deliver a burger.

Though according to the article only doordash loses here, not fove guys. Doordash pays the difference netween menu and paid price.

Re: Doordash and Pizza Arbitrage

#73

Post by com2kid »

bvandewalle wrote: post #52

I said this in another post about Grubhub but similarly to this article I really don't get it. Those apps are all 25%+ expensive than ordering take out directly with the restaurant, they screw the restaurants and all those delivery companies lose millions. Did everyone really become THAT lazy that driving 10 minutes to get your meal is that much trouble?

> Did everyone really become THAT lazy that driving 10 minutes to get your meal is that much trouble?

Depends on density, and traffic.

Getting to a nearby restaurant to pick up dinner, even a close by one, would easily take 30 minutes+ round trip. If I want food from someplace more than a couple miles away, make that 45 minutes or more round trip for dinner.

Or I can order from an app and have food delivered.

The question then becomes, is saving almost an hour of time worth $20?

Re: Doordash and Pizza Arbitrage

#74

Post by chrisseaton »

ngngngng wrote: post #64

I don't understand why doordash, uber eats, deliveroo, and similar business are starting to exist. Restaurants have been running successful delivery operations independently for ages. And there are many software offerings to help businesses get set up with delivering food. Why do we need a centralized on? Is it just the benefit of being able to browse in one app/website everything available for be delivered to you?

> Is it just the benefit of being able to browse in one app/website everything available for be delivered to you?

Yes I think that’s a big part of it.

That’s a big part of Uber as well - I can fly into a city not knowing anything about how they do taxi and get an Uber.

Re: Doordash and Pizza Arbitrage

#75

Post by alteria »

MattGaiser wrote: post #47
alteria wrote: post #42

This is absurd. Can someone explain to me why DoorDash exists? They're #1 in share, but I get the impression that they basically bought their spot. Grubhub has been operating in the space forever, is public, and generally had been profitable until VCs came to town. How is DoorDash doing anything than Grubhub? Wouldn't this capital do better in other investments? From the outside it seems like they've duped investors…

DoorDash is winning in terms of market share for one thing. https://www.cnbc.com/2020/01/17/doordash-took-the-lead-in-th... I bet a big thing for DoorDash is DashPass. That would lead to people ordering food for anything as the price is basically the same as in restaurant then.

Definitely agree that they're winning (the Second Measure blog is fascinating), it just seems like they bought their way to the top at a very high cost.

DashPass is definitely keeping me a DoorDash user, it's benefits are significantly better than Uber Eats pass, but idk if that's sustainable for DoorDash.

Re: Doordash and Pizza Arbitrage

#76

Post by craigc »

This is the sad state of VC funding in this day and age.

I can’t help but wonder if movie theaters could have exploited a similar loophole with MoviePass before they went bankrupt. Something like this:

1. Movie theaters buy up MoviePass subscriptions

2. They use those subscriptions to pick different movies to see every day at their location

If they picked 30 movies a month that would be approximately $450 a month in revenue (at $15/ticket), $440 of which would have been pure profit.

Re: Doordash and Pizza Arbitrage

#77

Post by mumblemumble »

bvandewalle wrote: post #52

I said this in another post about Grubhub but similarly to this article I really don't get it. Those apps are all 25%+ expensive than ordering take out directly with the restaurant, they screw the restaurants and all those delivery companies lose millions. Did everyone really become THAT lazy that driving 10 minutes to get your meal is that much trouble?

For me, it's sometimes laziness, but usually not. The long and short of it is that delivery only happens when it's hard to leave the house for whatever reason. If getting myself to the restaurant is an easy option, then dining in generally is, too. Takeout only happens when I've been tasked with picking up burritos on the way home from work.

Re: Doordash and Pizza Arbitrage

#78

Post by imgabe »

6nf wrote: post #69
imgabe wrote: post #49

Just some back-of-the-napkin math if you wanted to do this "right". Let's say you hire drivers as employees and pay them $15/hr plus tips and reimburse them for mileage. You charge a $4.99 delivery fee. Drivers work set shifts and are paid hourly whether they are making deliveries or not. That means each driver needs to be making at least 4 deliveries an hour or you're losing money. That's not even really counting fo…

A bunch of delivery 'drivers' here in sunny Sydney just use a bicycle - and they're often just students or backpackers etc making a couple of bucks in the afternoon while getting fit. They're happy to make $10 an hour which would normally be illegal under Australian employment laws. It's hard for a local pizza shop to compete with this kind of thing and the sheer scale of Uber Eats.

Unfortunately in the US you get people screaming that those drivers are criminally underpaid and are being exploited by heartless capitalists. Because of course random Internet commenters are better able to judge the drivers' priorities and desires than the drivers themselves.

Re: Doordash and Pizza Arbitrage

#79

Post by [deleted] »

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?

[deleted]

Re: Doordash and Pizza Arbitrage

#80

Post by spurdoman77 »

ngngngng wrote: post #64

I don't understand why doordash, uber eats, deliveroo, and similar business are starting to exist. Restaurants have been running successful delivery operations independently for ages. And there are many software offerings to help businesses get set up with delivering food. Why do we need a centralized on? Is it just the benefit of being able to browse in one app/website everything available for be delivered to you?

Majority of times I order from these centralized sites becauae of convenience. Id like to support my local restaurant by ordering via phoning the restaurant directly, but it is pain in the arse compared to the convenient web ordering process.
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