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Doordash and Pizza Arbitrage

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Re: Doordash and Pizza Arbitrage

#191

Post by argonaut »

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…

Restaurants have two advantages:

1) Drivers can do other work during down time (wash dishes, clean, etc.). I think some places don't even hire drivers, they just have whoever is free deliver the order.

2) They can eat the loss because it will be less than the 20-30% that delivery platforms take from the restaurant.

Re: Doordash and Pizza Arbitrage

#192

Post by gorbachev »

mlthoughts2018 wrote: post #38
MattGaiser wrote: post #31

Earlier quoted context omitted.

>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.

If anything, the market has shown that there's always a VC with too much money to spin up a new one of these every now and then.

I'm not sure if it'll last forever, but I'd be willing to bet I will be dead before that cycle ends.

Re: Doordash and Pizza Arbitrage

#193

Post by econcon »

Where I live in India, nearly 90% of the restaurants and hotels get their food from one place at rock bottom price.

And the restaurant/hotel the customer is dealing is responsible for arranging delivery and serving.

Re: Doordash and Pizza Arbitrage

#194

Post by almost_usual »

trixie_ wrote: post #179
mlthoughts2018 wrote: post #37

Earlier quoted context omitted.

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…

It works great. All those management middle men of thousands of delivery and taxi companies have been replaced with software. Razor thin margins are enough to keep the servers running and a small team of developers managing it - for the entire planet. It's difficult for any company to abuse their position as they're easily repalcable. So the margins will get lower, and more of the money paid by the customer will go d…

Uber is laying off 800 engineers tomorrow, they have thousands. All of them making salaries probably in the range of 250K-500k. Not really a small team of developers.

Re: Doordash and Pizza Arbitrage

#195

Post by Spivak »

lars512 wrote: post #154
masonic wrote: post #115

Earlier quoted context omitted.

I can fly into a city not knowing anything about how they do taxi What airports are you flying into where you could avoid signage/references to local taxis/buses/transit if you wanted to ? Heck, most have taxi stands right outside baggage claim, if not all exits.

The cost for a taxi is way less reliable, and harder to dispute. It's a common but unpleasant way to arrive to a new city to realise you've been shafted on the taxi fare.

100% my least favorite part of traveling in the pre-rideshare world. Has happened to me plenty of times.

If taxis just had upfront pricing and followed Google Maps it wouldn’t be a problem. I’d my happy to give them my business. I don’t really care too much about the app or whatever.

Like it could be super informal like $1/minute for whatever it says on Google Maps at the start and it would be fine.

Re: Doordash and Pizza Arbitrage

#196

Post by hnick »

ethbro wrote: post #114
astura wrote: post #104

Earlier quoted context omitted.

Yes, it's fraud. In general, knowingly obtaining money, goods or services you know you are not entitled to is fraud/illegal. Here's an example of someone going to jail for knowingly exploiting a glitch: https://www.inquirer.com/philly/hp/news_update/20071026_N_C_...

It seems like it would depend on who's initiating the action. While the restaurant preparing "partial" pizzas to ship to coordinated orders is obviously fraud, I'm not so sure "Asking the restaurant owner about their costs, then independently ordering a large number of pizzas" qualifies. It's not your responsibility if Doordash has shit code and auditing. And given VC-onomics, it's not even clear how you would be cer…

> While the restaurant preparing "partial" pizzas to ship to coordinated orders is obviously fraud

Does Doordash allow customer menu modification requests? "No cheese, no tomato sauce, no onion" etc. That would also then fall under shit code and auditing :)

Re: Doordash and Pizza Arbitrage

#197

Post by foxrob92 »

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.

>It's hard for a local pizza shop to compete with this kind of thing and the sheer scale of Uber Eats.

I mean, Uber Eats is losing cash at a phenomenal rate. So, more accurately:

>It's hard for a local pizza shop to compete with obscene amounts of venture capital subsidised delivery

Re: Doordash and Pizza Arbitrage

#198

Post by kabacha »

bb611 wrote: post #140
kevindong wrote: post #19

Very important note (near the bottom of the post) on why Doordash did what they did: > Note 1: We found out afterward that was all the result of a “demand test” by Doordash. They have a test period where they scrape the restaurant’s website and don’t charge any fees to anyone, so they can ideally go to the restaurant with positive order data to then get the restaurant signed onto the platform.

It doesn't fully explain why they priced a $24 pizza at $16. I wouldn't be surprised if they're subsidizing purchases, but just skipping fees doesn't explain that.

Web-scraping is hard man, especially with mom-and-pop restaurant websites that are often exported straight from microsoft word or some ancient "platform" that got reconfigured 20 times over.

As article pointed out it picked up full-toppings pizza as plain cheese.

Re: Doordash and Pizza Arbitrage

#199

Post by hnick »

ChuckMcM wrote: post #147

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 itsel…

Hah that box story is hilarious.

The actual automated fix should be during stock intake I assume. We ship international parcels with DHL etc and it's a clear stipulation there are NO BARCODES at all on the box apart from the mailing barcode that we generate. Being Amazon, nothing probably happened because they have more money than they need, but I assume they have similar rules and would be justified to ding the suppliers for this cost.

Re: Doordash and Pizza Arbitrage

#200

Post by Dylan16807 »

ethbro wrote: post #114
astura wrote: post #104

Earlier quoted context omitted.

Yes, it's fraud. In general, knowingly obtaining money, goods or services you know you are not entitled to is fraud/illegal. Here's an example of someone going to jail for knowingly exploiting a glitch: https://www.inquirer.com/philly/hp/news_update/20071026_N_C_...

It seems like it would depend on who's initiating the action. While the restaurant preparing "partial" pizzas to ship to coordinated orders is obviously fraud, I'm not so sure "Asking the restaurant owner about their costs, then independently ordering a large number of pizzas" qualifies. It's not your responsibility if Doordash has shit code and auditing. And given VC-onomics, it's not even clear how you would be cer…

> While the restaurant preparing "partial" pizzas to ship to coordinated orders is obviously fraud

How so? They're making the pizzas the way the customer wants them. The 'objective' tastiness is none of the delivery middleman's business. And there's nothing wrong with offering a bad pizza for $24, as long as the customer knows what they're getting.

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