Doordash and Pizza Arbitrage • Hacker News Board

Re: Doordash and Pizza Arbitrage

#381

Post by jeromegv » Mon, May 18, 2020, 1:36 PM UTC

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,…

Last week I noticed that my credit card number had been stolen. But only for UberEats, I had tons of UberEats transaction of $30-$50. It's not my UberEats account that was stolen because I logged in in my account and I had not ordered anything. So looks like there's a market to get those stolen CC and use it to order a bunch of stuff from restaurants. Perhaps you're right, it's to order things that can be resold (wine, etc).

And because it's the pandemic, i'm sure lots of people wouldn't notice those extra charges to their credit card right away because they already order through those apps. I haven't used UberEats in a year so it was easy for me to notice.

Re: Doordash and Pizza Arbitrage

#382

Post by naravara » Mon, May 18, 2020, 1:38 PM UTC

VHRanger wrote: post #367

jeroenhd wrote: post #348

Earlier quoted context omitted.

It's nog a bug, it's a feature. Doordash uses investment money to evaporate competitors, take over the market and then raise prices for restaurant owners once they gain control. It's a tried and proven concept. Paying part of the meal is part of that strategy. They know full well that large orders and large amounts of transactions cost them more money and they're betting on nobody actually doing this. They're selling…

Just a note: it's not a tried and proven concept. Predatory pricing hardly works in economic theory and is working disastrously for a lot of the companies trying it (eg. Ubers financials)

It only works if you have an easy path to monopoly once you price your competitors out. A company like WalMart or Amazon can leverage their returns to scale on logistics to actually price out Mom&Pops. That way, even after the drive the small stores out of business it’s just not worth it for anyone else to try to cut in unless they can also operate at WalMart scale and afford to bleed money for a while until WalMart gets tired of undercutting them.

But there are no appreciable logistical or operational efficiencies in how these delivery services operate. And there aren’t any barriers to entry. The workforce is completely fungible so they aren’t locked in. And just the fact that delivery services are popping up like mushrooms suggests it doesn’t take much to start one up.

In theory they could eke put some advantages to scale that keep out upstarts by using machine learning to optimize delivery routes or something. But I doubt that gets them the kind of efficiency gains they would need to actually turn a profit. From what I’ve seen, it looks like their main attempt to freeze out competition is just coming from flooding your search engine hits. I don’t know how sustainable that is either.

Re: Doordash and Pizza Arbitrage

#383

Post by legolas2412 » Mon, May 18, 2020, 1:38 PM UTC

_bxg1 wrote: post #183

dvduval wrote: post #16

Lose a few 100 million today for a monopoly next year. I make the assumption here that these delivery services are intent on dominating the search results so that independent restaurants are not able to compete. They are forced into using the services, or rather having a large majority of other orders coming from these services.

What's amazing to me is that they can all so brazenly pursue a strategy of "monopoly or bust" without any fear of regulatory action once they reach that endgame. I'm not sure whether it speaks more to the foolishness of VCs, or to the corruption of regulatory institutions.

I'm afraid that soon any regulation action will be seen as a death knell for the stock market, and all the monopolies will be judged "too big to fail". Then we'll have regulations not controlling, but cementing these monopolies

Re: Doordash and Pizza Arbitrage

#384

Post by EMM_386 » Mon, May 18, 2020, 1:38 PM UTC

patmcc wrote: post #272

SimonPStevens wrote: post #268

Earlier quoted context omitted.

I don't understand how this works. If your order to doordash cost $5000, why did they pay the restaurant $20,000? That would suggest their prices are 4 times cheaper to the customer. But I thought everyone complained they were more expensive. Surely DD are still keeping their commission from your order? What have I misunderstood?

Doordash seems to provide two different services. 1) Doordash has some deal with the restaurant, gets a commission on sales, fees, whatever. 2) Doordash has no deal with the restaurant, charges customer $x+y, buys food from restaurant at $x. In the second case, Doordash may be charging much more than the menu price, if it things it can find customers who will pay it.

It is exactly the opposite of your #2, check out the article.

Re: Doordash and Pizza Arbitrage

#385

Post by golergka » Mon, May 18, 2020, 1:41 PM UTC

mikeryan wrote: post #374

bufferoverflow wrote: post #355

Earlier quoted context omitted.

Why wouldn't the pizza place order $100K worth of pizza from themselves to themselves? They don't even have to make it.

A Doordash delivery guy actually has to pick up the food though right? This also does probably provide some legal cover as well.

He can pick up empty boxes and then immediately hand them back as the delivery address is the restoraunt address, no?

Re: Doordash and Pizza Arbitrage

#386

Post by bootlooped » Mon, May 18, 2020, 1:45 PM UTC

simias wrote: post #312

>I knew Doordash scraped restaurant websites. After we discussed it more, it was clear that the way his menu was set up on his website, Doordash had mistakenly taken the price for a plain cheese pizza and applied it to a 'specialty' pizza with a bunch of toppings. If that's really what happened (sounds plausible) that means that you should be able to trick DD even more by designing a website specifically in order to…

I'm not sure I would call a scraper crappy if it was fooled by a site deliberately designed to fool it. It would be like calling somebody's vision crappy if they were fooled by an optical illusion.

Scraping can be an adversarial exercise, but not typically in that manner.

Re: Doordash and Pizza Arbitrage

#387

Post by free_rms » Mon, May 18, 2020, 1:47 PM UTC

bvm wrote: post #303

kabacha wrote: post #198

Earlier quoted context omitted.

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.

Surely it's cheaper to just pay someone to do data entry at that point.

Cheaper, less sexy, and doesn't justify the jobs of several dozen engineers, a few managers and a director.

If you're the director, which would you go for?

Re: Doordash and Pizza Arbitrage

#388

Post by neap24 » Mon, May 18, 2020, 1:48 PM UTC

I've noticed the opposite phenomenon at a popular restaurant in Austin. The menu through DoorDash is priced higher than the normal price. Curiously, the restaurant's own, in-house delivery system is the same price as dining in. This is when I stopped using DoorDash...when I discovered that using the restaurant's own delivery system is just as easy and maybe cheaper.

Re: Doordash and Pizza Arbitrage

#389

Post by hnick » Mon, May 18, 2020, 1:49 PM UTC

AlexandrB wrote: post #360

hnick wrote: post #212

Earlier quoted context omitted.

It's the how that matters. Some countries have "interesting" taxi ecosystems. I had a friend whose taxi would drop her off to a certain part of the city she was in in Malaysia. She liked him and wanted him to bring her back home later because she felt safe. He couldn't. Apparently there were taxi gangs controlling territory and he could only drop off and GTFO. Or there's what I saw in Peru where a guy was selling TAX…

> Or there's what I saw in Peru where a guy was selling TAXI signs at a traffic light. This is literally what Uber/Lyft are doing. You don’t even need to leave the house.

I think that's an exaggeration. Uber/Lyft have some standards and questions before they let you join as a driver, not just a plastic sign you throw on the car. And if something goes wrong they have an audit trail. They at least know who picked you up before you went missing and where you were. You get none of that with a plastic sign.

Re: Doordash and Pizza Arbitrage

#390

Post by thedonkeycometh » Mon, May 18, 2020, 1:49 PM UTC

I think it is most likely a case of x-y, where they are artificially deflating prices (or simplifying the menu) to get traction for their service. Be aware that this may be a tactic to strangle competition. There's still a possibility of a Fraud action being brought if the owner is buying their own pizzas in bulk, indirectly, although it would be quite novel. And if they are using virtual phone numbers and other such things it would prove culpability. I'm surprised this isn't buried in some Terms of Service somewhere.