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Doordash and Pizza Arbitrage

themargins.substack.com

291–300 of 534 posts

Re: Doordash and Pizza Arbitrage

#291

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?

Amazon just invested £500m into Deliveroo based in Europe...

Re: Doordash and Pizza Arbitrage

#292

Earlier quoted context omitted.

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…

From what I can gather, it is a ring of people behind this operation likely getting a commission for each 'drop' back at base https://www.google.com/maps/place/101+bowery+st/@40.7176021,...

Told the police about it? Someone would be eager to chase that case.

Re: Doordash and Pizza Arbitrage

#293
post #224
post #140

Earlier quoted context omitted.

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.

They are taking a loss on every order, but they are hoping to make up for it with volume.

You can't make up for it in volume if each order makes a loss and you get no benefit from having more orders (they still pay each time the full price to the restaurant!)

Re: Doordash and Pizza Arbitrage

#294
post #203
post #116

Earlier quoted context omitted.

At that point door dash still thinks the pizza will cost much less, so if it's only the total the customer paid that's authorized, then how does the full cost of the order get paid?

In the article it makes clear that doordash calls the restaurant from their call center to make the order and gets the correct total verbally. Ostensibly this is what gets loaded to the delivery worker’s card. Since this was part of a “demand test” door dash is more interested in capturing a large number of orders than per order profitability. Once their digital marketing muscle has doordash originating 10%+ of order…

> Once their digital marketing muscle has doordash originating 10%+ of orders to the restaurant they have the leverage

How would they know what percentage of orders isc coming through them?

Re: Doordash and Pizza Arbitrage

#295
post #247

Earlier quoted context omitted.

That's capitalism as its finest. Saudi money (via SoftBank) is paying for poor people's food (and also subsidizing their transportation, via Uber).

Frankly, after all these years I still don't get it. Are the Saudis that gullible? How much more they need to lose to understand they're being duped?

Matt Levine's column Money Stuff touches on these questions every once in a while.

Until WeWork really blew up, it wasn't too hard as an investor to keep up the impression that the track record of Softbank was good enough.

(That's not to say that you couldn't re-interpret the track record in a negative way, even before WeWork. But nothing really forced you to.)

Re: Doordash and Pizza Arbitrage

#296
so they have two possible endgames:

1) find a sucker (aka retail investors) that buy a loss-making stock

2) become a monopoly and squeeze everyone to get higher margins (kind of how booking.com pushes hotels to increase their standard prices so that booking can offer a discount; which you also get if you call the hotel itself).

Re: Doordash and Pizza Arbitrage

#297
post #219
post #177

Earlier quoted context omitted.

Not all distribution centers validate weight, don't recall if Amazon does but I would be surprised if they don't. High speed scales are expensive.

Thinking about this more, I'm surprised this couldn't be caught when the items got delivered to Amazon. I find it extremely unlikely that a picking robot accidentally found an item with the same barcode if they weren't already in the wrong place. Seems like when the items arrived at the fulfilment centre, they got mis-scanned and ended up comingled. Presumably that's the stage where you can check weight and volume -…

It's not unusual for warehouses to deal with items with multiple barcodes.

For a technology example, you might get a network card with a UPC barcode, but also a MAC address barcode, and a manufacturer's part number barcode. A wholesaler/ manufacturer sells boxes of 20 items to resellers? The outer box will have a barcode. That box got sent by courier? Three barcodes on some mailing labels.

So at a goods-in station, the usual response to "multiple barcodes, some don't make sense" is "Keep trying until you find one that does make sense"

Re: Doordash and Pizza Arbitrage

#298
post #247

Earlier quoted context omitted.

That's capitalism as its finest. Saudi money (via SoftBank) is paying for poor people's food (and also subsidizing their transportation, via Uber).

Frankly, after all these years I still don't get it. Are the Saudis that gullible? How much more they need to lose to understand they're being duped?

They've only really known oil for 3 generations, so yes.

And they're also desperate. The future where the world doesn't need their oil (or they've run out) isn't a distant future anymore. It's coming, and coming faster and faster. They need to diversify anyway they can if they want to avoid going back to just being a desert. And so they're jumping at pretty much any deal they see

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