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Uber, Postmates Agree on $2.65B All-Stock Deal

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Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#101
post #94

Earlier quoted context omitted.

You're assuming that domino's makes a profit on food delivery rather than breaking even on it. But domino's also makes the food, so if they break even on the deliver, that's fine, they made money on the food. Scaling the delivery part of the business also scales the food part. If you aren't making the food, you have to make money on the delivery alone because scaling your delivery service scales someone else's food b…

I imagine the end goal is the same as with Uber's main business. Automation

Bubble

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#102

Earlier quoted context omitted.

But as your customers learn that wasting support time pays off, the game is surely over!

It turns out that human beings are often inclined not to lie for selfish gain, and there is often a certain degree of social pressure not to lie for selfish gain.

In my experience, it depends what the size of the gain is and/or which environment you are in.

Certain countries I've been to, it's perfectly normal to assume the opposing party is lying for selfish gain, and in return you expect it and act accordingly. In these places, there are no stores with return policies that will just take a customer's word for it.

Certain places have a higher trust society, and that allows some stores to be able to offer returns for refunds leniently...as long as the proportion of scammers stays low. However, even in these "high trust" places, I see that while people are hesitate to lie for selfish gain in small transactions, there is plenty of unscrupulous behavior in large transactions concealed by plausible deniability, aka white collar crime. A lot of it is in the form of you scratch my back, I'll scratch yours with someone else's money. There's almost no way to prove it unless it happened to be written down or recorded on audio/video.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#103
post #38

What I find interesting about the food delivery business is that there's clearly a market for this but nobody's happy. - Restaurants (rightly) complain that the drivers provide a poor service. For example, pizza delivered cold because the drivers have no heat bags. I've even heard of a pizza box mounted vertically on a delivery bicycle. - Customers are unhappy because food can be delivered cold through no fault of th…

I foresee a future where the entirety of listings on food delivery apps will be ghost restaurants - those whose menu and processes are optimized for delivery. Many high street brick-and-mortar restaurants will shut, but those that remain will likely make being "not available on any food delivery app" a unique selling proposition.

You're suggesting that the act of eating out, or walking for takeout is going to stop for a sufficient percentage of the population that regular restaurants are going to disappear?

That people are going to pay a premium to have their food always delivered and that people actually want to be in their homes / offices all the time, rather than get out of their current place to go and do something?

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#104
post #42

Earlier quoted context omitted.

I had a few friends in customer support. This happened all the time. If you spend too long going back and forth with a customer, the salary-based calculation of what it costs the company doesn’t make sense. So you give it to them free. But then it’s not like you have any margins that those come out of.

But as your customers learn that wasting support time pays off, the game is surely over!

Businesses are free to, and often do, ban highly unprofitable customers. Compensated product only makes business sense if its value is less than expected future margins plus the risk cost of the reputational hit to the company.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#105
The future of Uber is clearly diversification. Drivers doing everything. I absolutely love that I can order food from distant restaurants because they have driver routes programmed to cover large distances and a business model that supports longer wait times for the customer in exchange for cheaper prices, wider restaurant selection, and of course more customers served. The local establishments can't compete with the 1 driver to 1/2/3 customer(s) model.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#106

Earlier quoted context omitted.

You're assuming that domino's makes a profit on food delivery rather than breaking even on it. But domino's also makes the food, so if they break even on the deliver, that's fine, they made money on the food. Scaling the delivery part of the business also scales the food part. If you aren't making the food, you have to make money on the delivery alone because scaling your delivery service scales someone else's food b…

Yeah, but the delivery companies take 20-30% of the gross food order. So while they aren’t technically vertically integrated, they have the pricing of vertical integration (assuming typical restaurant margins).

> assuming typical restaurant margins

I think Domino's margins blow typical restaurant margins out of the water. I don't have hard numbers, but worked a variety of delivery jobs from 2010-2014. Domino's was the only place with the attitude that their food was worth pennies to produce.

Most places didn't offer discounts to their employees, not even for food that was mistakenly made and had to be trashed. Domino's was the only one that would just allow employees to make themselves a pizza for lunch or to take home for dinner (but no feta cheese, we had limited quantities of that).

Call and complain about any Domino's order, even over the dumbest thing, and they're supposed to give you a credit for a new order. It was drilled into my head as an employee. If someone complains, give them something free, and they're pretty much guaranteed to order from Domino's again in the future more times than they would if you had never made a mistake.

Also an individual driver could do far more deliveries than an app-based delivery worker can. The routing software they used at the time was really good, and would group 2 nearby orders for one trip by a delivery driver. There was never any waiting unless there were no orders at all. From what I hear with my friends who work UberEats/GrubHub, a lot of time is wasted at the restaurant waiting for the food to finish. McDonalds (at least in my area) is a big offender, marking orders as ready for pickup when they haven't even started making them yet. Having all food coming from a single storefront, and being able to take multiple deliveries at once is a big deal.

As for why places like Pizza Hut and Burger King can't do it as well, I guess it comes down to the tech and management. When Burger King tried offering first-party delivery services it was a massive shit show. I worked there for a bit, as they were the only store paying drivers 100% of the delivery fee. It ended up being a terrible deal because I would average 1-2 deliveries per hour during the lunch and dinner "rush", while a great day at Domino's could have me doing 10 per hour. Pizza Hut wasn't as terrible as when BK attempted it, but I feel like it only worked because they have a limited menu and not because they're actually competent.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#107

Earlier quoted context omitted.

> Is this really just a case of people not willing to pay what the service truly costs? I think so. If a driver spends an hour on delivery, they have to make $15 in NYC or ~$8 elsewhere (USA) to be worth their time. For a single person, that can be the price of the whole meal again. I've run into this when seeing the fees reflected on a final checkout page, and decided to cook for myself instead.

A single person isn’t really an efficient use for delivery. When I’m ordering for four people it’s $80+ so paying $20 for delivery is totally fine. And most places I order from are <10min drive.

Maybe it's due to my childhood, but even as someone who could easily afford a $25+ meal, it would hurt me emotionally to pay that much for delivery. Very few restaurants even offer a meal worth $25 in the first place (compared to what I can make at home), even in SF/NYC/London, and on top of that you don't know how long the driver is going to take, what kind of measures they are taking to keep it warm, and/or if they tamper with the food.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#108
post #38

What I find interesting about the food delivery business is that there's clearly a market for this but nobody's happy. - Restaurants (rightly) complain that the drivers provide a poor service. For example, pizza delivered cold because the drivers have no heat bags. I've even heard of a pizza box mounted vertically on a delivery bicycle. - Customers are unhappy because food can be delivered cold through no fault of th…

Self-driving vechicles something like https://www.starship.xyz/ but food delivery would be killer.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#109
post #94

Earlier quoted context omitted.

You're assuming that domino's makes a profit on food delivery rather than breaking even on it. But domino's also makes the food, so if they break even on the deliver, that's fine, they made money on the food. Scaling the delivery part of the business also scales the food part. If you aren't making the food, you have to make money on the delivery alone because scaling your delivery service scales someone else's food b…

I imagine the end goal is the same as with Uber's main business. Automation

Uh, considering they've been doing well prior to tech, and AI being a thing, I think that's non-factual

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#110
post #97
post #32

Earlier quoted context omitted.

Jump bikes still exist. Not sure what you're on about.

I'm not sure where you're located, but the Jump bikes in Seattle are now operated by Lime (even though you still rent them in the Uber app for some reason). https://www.geekwire.com/2020/jump-bikes-return-seattle-lime...

Uber paid $170 million for a stake in Lime haha. The math works.
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