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Doordash and Pizza Arbitrage

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Re: Doordash and Pizza Arbitrage

#451

Post by Spivak »

Traster wrote: post #246
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.

Can you imagine getting that call "Hi, little Pizza place, we've been fraudulently impersonating your business, dragging your brand through the mud and pissing off all your customers selling your pizza at a loss, clearly we're the sort of people you need to do business with"

I think there's a huge grey area between "hire a 3rd-party person to pick up your food and deliver it to you" and "impersonating your business."

Like DD, GrubHub, or whatever aren't pretending to be the restaurant (shady website bullshit notwithstanding). They're just saying that they can buy and drive the food to you on your behalf.

Re: Doordash and Pizza Arbitrage

#452

Post by BeetleB »

VBprogrammer wrote: post #426
Majromax wrote: post #399

Earlier quoted context omitted.

> My original comment said its not okay to steal from a company even if you don't like that company. Your original comment said it was wrong to exploit a bug, to which the parent poster retorted that this was a feature and not a bug. Here, you've gone further to claim that this behaviour is stealing, and I'd like to explore that for a minute: what possible moral or legal right does Doordash have to an operating profi…

Would it have crossed the line if the OP had tweaked the Italian places website (say for example setting a 0 height div) to include fake prices intended for the scraper to misinterpret? For me I think it would have. Which makes me pause to consider whether I find the whole scheme too close to the ethical boundary.

I disagree. In the case of this submission, the restaurant was getting negative reviews due to poor delivery (e.g. not keeping food warm) - all of which were the fault of DoorDash, and the restaurant had no control over it.

Doordash is exploiting and harming the restaurant so that Doordash can make money. I think it's totally fine to make changes to your own site to thwart this. Doordash is in full control of this. They're the ones scraping the site, and they're the ones who should pay the price if they do a poor job.

Re: Doordash and Pizza Arbitrage

#453

Post by hannasanarion »

mlthoughts2018 wrote: post #37
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.

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…

> the tech to spin up a competitor is extremely cheap and commodity.

This is the part that makes me the most mad. The delivery companies have almost no value as business entities, all of their value is in the technology, and the technology is not complicated at all.

The job that's being done by doordash and grubhub and all of them would be accomplished much more affordably, sustainably, and ethically with a marketing co-op, which is already pretty common in the food industry in America (Blue Diamond, Land o Lakes, Ocean Spray, Sunkist, Sun-maid, Tillamook, Welch's, etc). There's no need for a separate VC-backed for-profit here, a simple confederation of restauranteurs would work fine and be just as effective and way better for the whole marketplace.

Re: Doordash and Pizza Arbitrage

#454

Post by Spivak »

Barrin92 wrote: post #168
cletus wrote: post #166

Wow, 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…

I honestly don't know if I'm living in a different world than everyone else but I've been ordering food and taking cabs all my life and I've never had to deal with any friction. Like, you call the pizzeria, tell them what you want and then some college student delivers your stuff, and if you order for more than 20 bucks it doesn't cost you anything. Not even being facetious, but what problem do these apps solve? I al…

Being able to get food delivered from places that don't deliver.

I don't think the apps really add anything substantial for restaurants that have their own delivery network.

Re: Doordash and Pizza Arbitrage

#455

Post by Spivak »

Dylan16807 wrote: post #234
sneak wrote: post #222

Earlier quoted context omitted.

You forgot wear and tear on the car, and gas. 15/hr is decent without additional expenses. Take out gas and tires and brakes and maintenance and it's poverty level.

No I didn't, that's part of mileage.

And the standard formula for mileage compensation that everyone follows is super generous. If you're driving a car with even half-decent mileage and reliability you come out ahead.

Re: Doordash and Pizza Arbitrage

#456

Post by hannasanarion »

LudwigNagasena wrote: post #58
dvduval wrote: post #20

The restaurants need to work through their own trade organization where they band together and push out the delivery businesses that are costing them money, and then allow delivery companies to bid for their business.

The restaurants (that aren’t mega chains like McDonalds) are usually utterly incompetent in spheres of logistics and IT. I don’t see how this can end up well.

That's what federations and marketing co-ops are for. They're really common in the agriculture sector. Nut, dairy, berry, and fruit farmers buy into groups like Land O Lakes, Blue Diamond, Sun-Maid, Tillamook, and Welch's, and then those entities handle the logistics and distribution and pass back the profits.

Platforms like grubhub and doordash could and should still exist, but they shouldn't be separate VC-backed for-profits, they should be restaurant-owned.

Re: Doordash and Pizza Arbitrage

#457

Post by kevmo314 »

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.

> they're often just students or backpackers etc making a couple of bucks in the afternoon while getting fit

I did this in lieu of going to the gym daily a while back ago. Adds a bit of gamification and social interaction, although takes a bit longer for the same intensity. I can't imagine having to live off that wage though.

Re: Doordash and Pizza Arbitrage

#458

Post by BeetleB »

MattGaiser wrote: post #208
Barrin92 wrote: post #168

Earlier quoted context omitted.

I honestly don't know if I'm living in a different world than everyone else but I've been ordering food and taking cabs all my life and I've never had to deal with any friction. Like, you call the pizzeria, tell them what you want and then some college student delivers your stuff, and if you order for more than 20 bucks it doesn't cost you anything. Not even being facetious, but what problem do these apps solve? I al…

> I also don't know how "not having to talk to someone" is a perk. For us introverts it is.

I'm an introvert and please don't include me in the tiny subset of introverts who consider this a perk.

There's a spectrum within introversion, and this sounds more on the edge of that spectrum.

Full disclaimer: I too originally had trouble with calling to order pizza. But in retrospect it wasn't introversion: I just wasn't used to initiating conversations with strangers on the phone. The solution was trivial: Script the "opening lines" before calling. After a few of these, it all became natural.

Re: Doordash and Pizza Arbitrage

#459

Post by jyrkesh »

jeroenhd wrote: post #380
VHRanger wrote: post #367

Earlier quoted context omitted.

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)

Where I live, one company has taken over all meal delivery nationally. After destroying the competition, this company had started raising prices each year. They ask for a percentage (13%, rising each year) in an industry where the margins are already very thin. They money grab got a lot worse after they pushed out all the alternatives and just like with Google, everybody has to play by their rules or they'll be mostl…

This is the biggest problem with the reality of predatory pricing compared to the theory of it: after years of undercutting your competitors, you're finally ready to jack up prices and take a profit....just as a new competitor comes in with a new infusion of cash and undercuts your artificially inflated price. (Remember, you can't just turn any old profit, you need a large enough profit to offset the years of purposefully selling at a loss.)

Re: Doordash and Pizza Arbitrage

#460

Post by VBprogrammer »

BeetleB wrote: post #452
VBprogrammer wrote: post #426

Earlier quoted context omitted.

Would it have crossed the line if the OP had tweaked the Italian places website (say for example setting a 0 height div) to include fake prices intended for the scraper to misinterpret? For me I think it would have. Which makes me pause to consider whether I find the whole scheme too close to the ethical boundary.

I disagree. In the case of this submission, the restaurant was getting negative reviews due to poor delivery (e.g. not keeping food warm) - all of which were the fault of DoorDash, and the restaurant had no control over it. Doordash is exploiting and harming the restaurant so that Doordash can make money. I think it's totally fine to make changes to your own site to thwart this. Doordash is in full control of this. T…

I think that is a fair point which I wasn't really accounting for. Doordash should really get permission from restaurants before inserting themselves as a middle man, even on a trial basis.

Also, it occurs to me that if the artificially low prices resulted in doordash recieving more orders than would be usual, I doubt they would have disclosed that in their dealings with the restaurant. Though that is hypothetical and still suffers from the two wrongs don't make a right issue.

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