How does the author know it isn't the driver that will get the short end of the stick here? To put it differently, what would happen if the restaurant mistakenly charged the driver who is picking up the food more than listed and then the driver pays that mistaken amount with Doordash's credit card? Will they be penalized/fired once Doordash discovers the accounting error?
Doordash and Pizza Arbitrage
331–340 of 534 posts
Re: Doordash and Pizza Arbitrage
#332Wow, that was great. And honestly good on them for profit-taking on this arbitrage. The author likes to pin this on zero-interest rates ("ZIRP") and that certainly explains why the system is awash with cash but I'd say he's missing a key point here. When I moved to NYC (~10 years ago) I didn't order delivery at all. Honestly it's a huge pain. To call someone up and try and communicate an order to someone who probably…
This is like the iPhone SE conversation - there was always a big group of people who would tell you that the reason they buy the iPhone SE is because it's the smallest iPhone. But its very clear that the company making iPhones is certain that people buy the iPhone SE because it's cheap. It's the same here. Everyone will always tell you that these knew gig economy companies are so much better! Their service is better,…
I think you're both right, there are two separate types of customers making the same choice. One group is more price-conscious, the other is more effort-conscious. I'm personally in the other group - I have less time and patience than money to spend on deliveries, so I'll pick an option based on seamlessness. E.g. I've been ordering food for years on aggregator websites instead of calling the restaurants, because this way I can input my order on a computer (vs. talking to a busy person in a noisy room over crappy cellular connection, which often enough ends in errors), and I can prepay the order. I don't carry much cash on me, and I don't enjoy the hassle of using it. And while some restaurants will allow paying by card on recepit, it usually involves one or two payment terminals shared between a bunch of drivers, which leads to longer delivery times and all sorts of other problems (I've had drivers forget or not be informed about the need to take a terminal with them). I'll gladly accept 10-20% higher price to avoid dealing with any of that.
It's a similar story for rideshares; I think the major benefit they offer over regular taxi is seamless payment that (almost) always works, and is always available.
Re: Doordash and Pizza Arbitrage
#333Earlier quoted context omitted.
> 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.
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.
If you are a tourist you will get charged more if you hail a taxi from most Indian airports.
Re: Doordash and Pizza Arbitrage
#334How does the author know it isn't the driver that will get the short end of the stick here? To put it differently, what would happen if the restaurant mistakenly charged the driver who is picking up the food more than listed and then the driver pays that mistaken amount with Doordash's credit card? Will they be penalized/fired once Doordash discovers the accounting error?
It would be illegal to penalize the drivers, at least financially. I doubt the driver is given the choice of not buying the food based on price. If Doordash did have some way to penalize them, they could just bounce over to Grubhub or others. Doordash is advertising food at a given price - they must sell it at that price, regardless of price of purchase.
Re: Doordash and Pizza Arbitrage
#335Earlier quoted context omitted.
So a pound is 453g. I checked my order history and my last orders are around: - 350g - 600g - 200g - 500g - 5kg - 120g a box with empty packing would fit within a pound for most of these. I don't intend to nitpick your back of the enveloppe calculation, just that it's not as simple as it seems. I don't know if I am the typical amazon shopper, but on my 35 orders in the last 6 months the above pattern is repeating wit…
I think an important part of the equation would be knowing the weight of the boxes you're using as well.
This is called a "tare weight", FYI.
Re: Doordash and Pizza Arbitrage
#336Just 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…
> Domino's and lots of other places do it, but they probably aren't paying $15/hour and they also have one central location and more predictable demand. One thing to note about Dominos is that people pay at the door, so they would need to look the delivery guy in the face as they stiff him on the tip. Not required for the delivery apps and fewer people tip there.Because people tip, you can pay lower wages. I had a re…
In the UK tipping delivery drivers is basically unheard of, except maybe if they're delivering on Christmas Day or something. Despite that people I know who've worked as drivers for Dominos say its one of the best unskilled jobs available, the pay is good, it comes with some benefits if you're working enough hours, and they generally take care of their employees.
Re: Doordash and Pizza Arbitrage
#337In another form of arbitrage with “substitute goods”, we’ve noticed restaurants with completely different menus on delivery sites than directly. We ordered anyway and the packaging was totally different. Someone is fulfilling orders for a fancier restaurant with generic food. I ended up throwing it out because I wasn’t comfortable with it.
Re: Doordash and Pizza Arbitrage
#338Earlier quoted context omitted.
What was the deal? You pay 5,000, the owner gave you back your 5,000 and kept the 15,000 as profit from door dash? The owner made a massive profit and the shelter gets free food and it didn’t cost you anything?
> The owner made a massive profit and the shelter gets free food and it didn’t cost you anything? We’re in the midst of a pandemic. The restaurant stays afloat, nothing more. The shelter got a donation, and I got promises of comped deliveries and catering. It cost me $5,000; it cost DoorDash over twenty thousand.
This seems very unethical. The fact that you don't like Softbank or DoorDash or the gig-economy or that you're sending pizza to homeless people is irrelevant. The fact is you're exploiting a bug to personally benefit at the expense of investors.
Why wouldn't you apply the same principals of ethical hacking, where you would notify the party of the exploit?
Re: Doordash and Pizza Arbitrage
#339Earlier quoted context omitted.
> Domino's and lots of other places do it, but they probably aren't paying $15/hour and they also have one central location and more predictable demand. One thing to note about Dominos is that people pay at the door, so they would need to look the delivery guy in the face as they stiff him on the tip. Not required for the delivery apps and fewer people tip there.Because people tip, you can pay lower wages. I had a re…
In the UK tipping delivery drivers is basically unheard of, except maybe if they're delivering on Christmas Day or something. Despite that people I know who've worked as drivers for Dominos say its one of the best unskilled jobs available, the pay is good, it comes with some benefits if you're working enough hours, and they generally take care of their employees.
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Re: Doordash and Pizza Arbitrage
#340Earlier quoted context omitted.
> Domino's and lots of other places do it, but they probably aren't paying $15/hour and they also have one central location and more predictable demand. One thing to note about Dominos is that people pay at the door, so they would need to look the delivery guy in the face as they stiff him on the tip. Not required for the delivery apps and fewer people tip there.Because people tip, you can pay lower wages. I had a re…
In the UK tipping delivery drivers is basically unheard of, except maybe if they're delivering on Christmas Day or something. Despite that people I know who've worked as drivers for Dominos say its one of the best unskilled jobs available, the pay is good, it comes with some benefits if you're working enough hours, and they generally take care of their employees.
> In the UK tipping delivery drivers is basically unheard of
For you it might be.
I tip delivery drivers and I received tips when I worked. Tips made up >20% of my pay.
Rich people generally would not tip, poor people would.