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Doordash and Pizza Arbitrage

themargins.substack.com

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Re: Doordash and Pizza Arbitrage

#141

Post by MattGaiser »

walrus01 wrote: post #139
inquiryaccount wrote: post #51

This reminds me of a post I submitted a few weeks ago on HN. A friend of mine works for a restaurant group in NYC and they like many they have had to respond by offering delivery to folks in order to keep some revenue flowing. He and I were chatting and he mentioned that lately, a large majority of high value ($500+) orders were fraudulent with the fraudster ordering things that can be resold such as high-value wine,…

I bet the person physically receiving the wine/goods is some gullible, naive person who has been social engineered into thinking they're working for a legit business. It's like the 419 emails where they are trying to "recruit a remote working employee in our finance department" where your job is actually to receive fraudulent ACH wire transfers and send the money to some overseas destinations, go to a bitcoin ATM and…

Or, it is the age of social distancing. Just order it to a random address and steal it off the porch/lobby area.

Re: Doordash and Pizza Arbitrage

#142

Post by x3blah »

"Which brings us to the question - what is the point of all this? These platforms are all losing money. Just think of all the meetings and lines of code and phone calls to make all of these nefarious things happen which just continue to bleed money. Why go through all this trouble?

How did we get to a place where billions of dollars are exchanged in millions of business transactions but there are no winners? My co-host Can and my restaurant friend both defaulted to the notion "delivery is a shitty margin business" when discussing this post.

You have insanely large pools of capital creating an incredibly inefficient money-losing business model.

It's used to subsidize an untenable customer expectation.

Third-party delivery platforms, as they've been built, just seem like the wrong model, but instead of testing, failing, and evolving, they've been subsidized into market dominance.

The more I learn about food delivery platforms, as they exist today, I wonder if we've managed to watch an entire industry evolve artificially and incorrectly."

A contrary view, from 4 days ago, arguing third party food delivery market is not created by VC, the startups are not over-funded and that they are delivering splendid returns to investors.

https://news.ycombinator.com/item?id=23171915

Re: Doordash and Pizza Arbitrage

#143

Post by balls187 »

MattGaiser wrote: post #138
balls187 wrote: post #120

Keep reading the level of skullduggery these companies go through and keep saying to yourself "Tech is a meritocracy." Yeesh.

Merit for businesses is defined by consumer acceptance and consumers love these apps.

Perhaps because ignorance is bliss.

I recall blowback when it was uncovered that DoorDash was not providing 1:1 amount of tips to their dashers.

Re: Doordash and Pizza Arbitrage

#144

Post by akiselev »

imgabe wrote: post #127
ViViDboarder wrote: post #123

Earlier quoted context omitted.

Are you seriously arguing that the drivers would rather be underpaid than get paid a fair wage? The argument is not that these people shouldn’t be able to find work, but that they should get paid fairly for the work they do.

I am arguing that they would rather be paid some wage rather than have no job available. A backpacker who just wants to make enough money to get to their next destination probably doesn't want to deal with the overhead of taking on a full-time job and is happy to have the flexibility in exchange for less money. Fair is determined by the two people who are party to the transaction. If they both agree to it, then they…

How many transient backpackers actually work for these companies to fund their immediate journeys and what do they have to do with a debate on localized externalities that they never experience?

Re: Doordash and Pizza Arbitrage

#145

Post by crazygringo »

> That’s what is so odd to me about third-party delivery platforms. The business of food delivery clearly is not intrinsically a loser. Domino’s figured it out. Every Chinese restaurant in New York City seemed to have it figured out long before any platform came along. My friend is figuring it out.

Domino's and Chinese are very specific high-margin businesses. Basically the highest-margin restaurant businesses.

That doesn't, in any way, prove that food delivery in general is not a loser. In fact, if you have to specifically pick the two highest-margin examples as your examples... maybe the industry in general isn't all that sustainable.

Re: Doordash and Pizza Arbitrage

#146

Post by eitally »

peteretep wrote: post #88
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?

I've spent many thousands of dollars on app-delivered food over the last few years (Foodpanda, Uber Eats, Grab Food, Lineman, and Deliveroo). I use the apps because: - GPS tracking of the driver, and helpful notifications - Discovery of new restaurants - Detailed menu (and occasionally useful suggestions of menu items) - I don't have to create a new account or fuck around with giving some restaurant my credit card -…

That last bit only applies in dense downtowns. In the Bay Area, if I'm hungry right now and that happens to be roughly dinner time, I'm waiting 50-70 minutes for a food delivery.

Re: Doordash and Pizza Arbitrage

#147

Post by ChuckMcM »

I love this story, especially about ordering dough pizzas.

It reminded me of this twitter thread: https://twitter.com/meslin/status/1225834920611848192?lang=e...

In which the author tries to order the Uline "box of boxes", a box of twenty-five (25) 6" x 9" x 6" boxes, only to have Amazon deliver a 6" x 9" x 6" box containing some random product. The collection product from Uline has the same bar code as the box itself, so the pick up robot would scan the shelf for the box, find something that SOME OTHER VENDOR had put into a 6x9x6 Uline box, and pick that to satisfy the query.

Adding automation to a process that any human with visibility to the whole process would say, "Wait, that can't be right." ends up in misbehavior.

Re: Doordash and Pizza Arbitrage

#148

Post by olalonde »

I'm surprised a guy in finance can't see the potential efficiency gains and economies of scale a delivery company could have over all restaurants having to operate their own delivery service. I don't know about DoorDash specifically (not in the US) but it seems obvious to me that those services are here to stay and they can be run profitably.

Re: Doordash and Pizza Arbitrage

#149

Post by walrus01 »

dylz wrote: post #107
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 driver pays with a Doordash prepaid-reloadable card. When the driver GPS-checkins at the restaurant they're picking an item up at, the card is loaded with the exact balance the restaurant is "supposed to charge"

I wonder to what extent the back end software supporting this is identical to, or similar to, what Moviepass created.

Re: Doordash and Pizza Arbitrage

#150

Post by dylz »

thomk wrote: post #111
judge2020 wrote: post #101

Earlier quoted context omitted.

> - I don't have to create a new account or fuck around with giving some restaurant my credit card In case you need to in the future, i'd recommend privacy.com for merchant-locked cards.

How has your experience been with privacy.com?

Usually gets your Uber account terminated or not able to sign up in the first place with a prepaid.
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