People think they're calling restaurants directly but Grubhub is getting a fee • Hacker News Board

Re: People think they're calling restaurants directly but Grubhub is getting a fee

#11

Post by MattGaiser » Wed, Jun 03, 2020, 12:06 AM UTC

gruglife wrote: post #3

I love this paragraph from the pizza arbitrage article, link below. If capitalism is driven by a search for profit, the food delivery business confuses the hell out of me. Every platform loses money. Restaurants feel like they're getting screwed. Delivery drivers are poster children for gig economy problems. Customers get annoyed about delivery fees. https://themargins.substack.com/p/doordash-and-pizza-arbitra...

> a search for profit

You may search, but you may not find. Usually the problem a business faces is that nobody wants what they are selling.

In this case, there is the very interesting element of an enormous number of people wanting the product, but only at a money losing pricepoint.

Re: People think they're calling restaurants directly but Grubhub is getting a fee

#12

Post by nickff » Wed, Jun 03, 2020, 12:06 AM UTC

rickpmg wrote: post #8

MaintenanceMode wrote: post #4

It's disheartening that there's so much due diligence required just to conduct the most basic transactions right now. I have a narrow list of vetted restaurants, where I understand the costs and to the business, the delivery model, the safety (food handling and Covid precautions), and I only take out from these particular places. I tried a new place recently, only to find out I had been duped by Grub-hub, even though…

>I tried a new place recently, only to find out I had been duped by Grub-hub So you found a new restaurant, the restaurant found a new customer, and grub-hub is cut out of the (future) picture. Didn't grubhub earn that commission in this case? I have no love (or hate) for grub-hub... but it seems like a business hired a salesperson on commission, knowing full well the parameters of the deal, and then gets upset when…

Thanks for offering a refreshing take on the situation; I had not heard anything like this view, and find it very interesting.

Re: People think they're calling restaurants directly but Grubhub is getting a fee

#13

Post by MattGaiser » Wed, Jun 03, 2020, 12:07 AM UTC

calvinmorrison wrote: post #7

gruglife wrote: post #3

I love this paragraph from the pizza arbitrage article, link below. If capitalism is driven by a search for profit, the food delivery business confuses the hell out of me. Every platform loses money. Restaurants feel like they're getting screwed. Delivery drivers are poster children for gig economy problems. Customers get annoyed about delivery fees. https://themargins.substack.com/p/doordash-and-pizza-arbitra...

The lure of more business for local restaurants. An uptick in orders and free advertising could certainly help! The lure of a weekend job for drivers. I've done it and made out pretty well on my motorcycle for a few hours on the weekend. consumers love apps and they love being able to have visibility into the status of their orders. They want to shop online for food and have it appear without of phone call, or to dis…

> A logistics company elsewhere caught charging this much would be laughed out of the room but in a new and exciting field there's a lot of room for markup.

I would argue that they are also the owner of many of the customers. DoorDash owns me as a customer simply because when I am hungry, I turn on the app and select from one of the offerings.

Re: People think they're calling restaurants directly but Grubhub is getting a fee

#14

Post by schoolornot » Wed, Jun 03, 2020, 12:07 AM UTC

If GrubHub brings awareness to your restaurant that turns into an order why shouldn't they be compensated? You may not like the commission. Don't like it, leave.

The only case I think is a step too far is if GrubHub uses their search rank to display results above a non-participating restaurant and attempts to extort commissions by displaying a proxy number anyway. Is there any evidence of this?

If a customer decides to store the proxy number in their address book thinking that it's a direct line and GrubHub charges the restaurant for each call, then that's a bit scummy.

Re: People think they're calling restaurants directly but Grubhub is getting a fee

#15

Post by toomuchtodo » Wed, Jun 03, 2020, 12:07 AM UTC

rickpmg wrote: post #8

MaintenanceMode wrote: post #4

It's disheartening that there's so much due diligence required just to conduct the most basic transactions right now. I have a narrow list of vetted restaurants, where I understand the costs and to the business, the delivery model, the safety (food handling and Covid precautions), and I only take out from these particular places. I tried a new place recently, only to find out I had been duped by Grub-hub, even though…

>I tried a new place recently, only to find out I had been duped by Grub-hub So you found a new restaurant, the restaurant found a new customer, and grub-hub is cut out of the (future) picture. Didn't grubhub earn that commission in this case? I have no love (or hate) for grub-hub... but it seems like a business hired a salesperson on commission, knowing full well the parameters of the deal, and then gets upset when…

A commission isn’t earned when you’re fraudulently impersonating a business.

Re: People think they're calling restaurants directly but Grubhub is getting a fee

#16

Post by detaro » Wed, Jun 03, 2020, 12:07 AM UTC

rickpmg wrote: post #8

MaintenanceMode wrote: post #4

It's disheartening that there's so much due diligence required just to conduct the most basic transactions right now. I have a narrow list of vetted restaurants, where I understand the costs and to the business, the delivery model, the safety (food handling and Covid precautions), and I only take out from these particular places. I tried a new place recently, only to find out I had been duped by Grub-hub, even though…

>I tried a new place recently, only to find out I had been duped by Grub-hub So you found a new restaurant, the restaurant found a new customer, and grub-hub is cut out of the (future) picture. Didn't grubhub earn that commission in this case? I have no love (or hate) for grub-hub... but it seems like a business hired a salesperson on commission, knowing full well the parameters of the deal, and then gets upset when…

Depends if Grubhub did anything to "find" them. I.e. if some googles for a restaurant someone recommended to them, Grubhub buys the Google advertising spot for the name of the restaurant, places an ad directly above the Google Maps result and the restaurants website in the results, captures the click and demands a commission for it, what value have they added?

https://www.saddlebackbbq.com/how-google-doordash-grubhub-co...

Or if Doordash puts their phone numbers on the restaurants Google listings, replacing the direct one: https://support.google.com/business/thread/5820393?hl=en

Would you label a sales guy you hired to find you new customers a bad guy if he camped in front of your door, talked to people coming to visit you and claimed commission?

Re: People think they're calling restaurants directly but Grubhub is getting a fee

#17

Post by toast0 » Wed, Jun 03, 2020, 12:08 AM UTC

gruglife wrote: post #3

I love this paragraph from the pizza arbitrage article, link below. If capitalism is driven by a search for profit, the food delivery business confuses the hell out of me. Every platform loses money. Restaurants feel like they're getting screwed. Delivery drivers are poster children for gig economy problems. Customers get annoyed about delivery fees. https://themargins.substack.com/p/doordash-and-pizza-arbitra...

Food delivery is simply a terrible business. People must have seen how much waiters on wheels charges, and how much pizza places charge and said if we get costs down to pizza delivery and charge less than waiters on wheels, we'll make a bunch of money.

The problem is restaurants with enough delivery volume to justify their own delivery service can send a driver out with several orders, and can schedule the next round of orders to be ready just as the driver gets back. That's hard to do in the order whatever from wherever model, and one order per delivery run ends up with costs high enough that a lot of people would rather pick things up themselves.

Re: People think they're calling restaurants directly but Grubhub is getting a fee

#18

Post by gibolt » Wed, Jun 03, 2020, 12:08 AM UTC

rickpmg wrote: post #8

MaintenanceMode wrote: post #4

It's disheartening that there's so much due diligence required just to conduct the most basic transactions right now. I have a narrow list of vetted restaurants, where I understand the costs and to the business, the delivery model, the safety (food handling and Covid precautions), and I only take out from these particular places. I tried a new place recently, only to find out I had been duped by Grub-hub, even though…

>I tried a new place recently, only to find out I had been duped by Grub-hub So you found a new restaurant, the restaurant found a new customer, and grub-hub is cut out of the (future) picture. Didn't grubhub earn that commission in this case? I have no love (or hate) for grub-hub... but it seems like a business hired a salesperson on commission, knowing full well the parameters of the deal, and then gets upset when…

In a lot of cases Grubhub is creating websites that look official for restaurants. Few businesses are aware of this, as it siphons customers from many legit websites thanks to better SEO. There have been quite a few instances of this even with restaurants that they've never worked with.

Re: People think they're calling restaurants directly but Grubhub is getting a fee

#19

Post by MattGaiser » Wed, Jun 03, 2020, 12:12 AM UTC

MaintenanceMode wrote: post #4

It's disheartening that there's so much due diligence required just to conduct the most basic transactions right now. I have a narrow list of vetted restaurants, where I understand the costs and to the business, the delivery model, the safety (food handling and Covid precautions), and I only take out from these particular places. I tried a new place recently, only to find out I had been duped by Grub-hub, even though…

The due diligence is because the restaurants offer a terrible experience.

Most still do not have an independent online ordering function. They want me to call.

Most still haven't set up meaningful profiles on Yelp and other review sites. So I would need to root around to find contact information.

That is in addition to needing to give my credit card over the phone, not knowing how long the order will take, and needing to be concerned about the person hearing the order right.

The restaurants are barely trying to compete for customers.

Re: People think they're calling restaurants directly but Grubhub is getting a fee

#20

Post by yeswecatan » Wed, Jun 03, 2020, 12:13 AM UTC

schoolornot wrote: post #14

If GrubHub brings awareness to your restaurant that turns into an order why shouldn't they be compensated? You may not like the commission. Don't like it, leave. The only case I think is a step too far is if GrubHub uses their search rank to display results above a non-participating restaurant and attempts to extort commissions by displaying a proxy number anyway. Is there any evidence of this? If a customer decides…

  The redirect number can also appear higher in Google search results (including the Google panel for that business) than the restaurant’s own line. This leads some customers to call it even if they don’t intend to use Grubhub.