Uber, Postmates Agree on $2.65B All-Stock Deal • Hacker News Board

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

#251

Post by Zenbit_UX » Mon, Jul 06, 2020, 12:55 PM UTC

jon-wood wrote: post #209

tyre wrote: post #24

Food delivery is a terrible business. M&A won’t make it better. I worked at LivingSocial in 2012/2013. We used to joke that “we lose money on every transaction but make it up in scale.” Takeout and Delivery was one of the last bets the company made. Basically food delivery. The customer service load is huge, the services aren’t really differentiated, and you have to both pay the driver enough for it to be worth it an…

I worked for five years at a grocery delivery company, and even there it was a nightmare trying to keep delivery routes profitable - that was with at least 5 hour's notice on what people had ordered, and pre-selected delivery slots, which meant we could peak at each driver doing 10-12 drops an hour if they were in an area with a high customer density. I have no idea how companies like Deliveroo expect to make a consi…

> Having said that, I do now wonder if you could make the model work by offering very cheap, or even free, delivery on the condition that you place the order a few hours in advance for a pre-selected delivery time.

You're right and you just described how that "Special Offers" section of über ears works. They give you a small selection of restaurants that another user near you has ordered from and a 5min countdown to place an order yourself, if you do you get free delivery and über benefits from the efficiency of a double or triple order for one of their drivers.

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

#252

Post by Zenbit_UX » Mon, Jul 06, 2020, 1:04 PM UTC

squeaky-clean wrote: post #116

csours wrote: post #31

Earlier quoted context omitted.

I saw someone online saying how they didn't get their ranch with their pizza, so they called up customer service and eventually got a whole new pizza out of the deal. I understand it sucks to not get your ranch, but come on...

I mentioned this in a comment above, but I worked at Domino's and this was 100% encouraged. My manager hammered it into my head that a mistake was just an opportunity to gain a more loyal customer. If someone called with a complaint, we would credit you for a whole new pizza. Drink and dessert too if we really F'd up. The reason being people will actually stop ordering Domino's if they're upset at a mistake in an ord…

Your manager was way too smart to work at domino's.

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

#253

Post by dannyr » Mon, Jul 06, 2020, 1:14 PM UTC

baxtr wrote: post #206

WrtCdEvrydy wrote: post #165

Earlier quoted context omitted.

The issue is mostly limited by requirements to get food there quickly. If we knew what we wanted ahead of time, scheduling delivery ahead of time would make it easy... since you could use a delivery route (to deliver 2-3 items nearby). A single winner may be able to make it work since you can do 1-2 pickups and deliver to two nearby homes.

Huh. Interesting! How about a food truck with a kitchen that drives a pre-defined route to delivers pre-ordered food?

Without the cooking part, Sprig was doing this back in 2014. Delivery staff drives around a neighborhood with a bunch of hot meals.

Sprig only offered 2-3 dishes.

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

#254

Post by sjg007 » Mon, Jul 06, 2020, 1:16 PM UTC

jon-wood wrote: post #209

tyre wrote: post #24

Food delivery is a terrible business. M&A won’t make it better. I worked at LivingSocial in 2012/2013. We used to joke that “we lose money on every transaction but make it up in scale.” Takeout and Delivery was one of the last bets the company made. Basically food delivery. The customer service load is huge, the services aren’t really differentiated, and you have to both pay the driver enough for it to be worth it an…

I worked for five years at a grocery delivery company, and even there it was a nightmare trying to keep delivery routes profitable - that was with at least 5 hour's notice on what people had ordered, and pre-selected delivery slots, which meant we could peak at each driver doing 10-12 drops an hour if they were in an area with a high customer density. I have no idea how companies like Deliveroo expect to make a consi…

If you have a good math and data science team you should be able to predict demand pretty reliably. I think membership fee programs may be the future here with a premium for faster delivery vs normal delivery. The key is to set expectations.

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

#255

Post by linuxftw » Mon, Jul 06, 2020, 1:21 PM UTC

TheSpiceIsLife wrote: post #186

cycomanic wrote: post #182

Earlier quoted context omitted.

I've said this in another thread, the business of all these "startups" seems not to be of making a sustainable business, but instead it's more of a pyramid scheme where one set of investors are trying to make money of the next round of investors (up to and after IPO). If we view it like that it makes sense, the merger/acquisition will increase stock prices because it seems like there is a holistic strategy. At some p…

It's a wealth transfer scheme. Wealth is transferred from ordinary folk via the IPO-retirement-fund axis to the plethora of agents involved in the whole scheme, from the employees bashing out code and UX, right through to everyone involved the M&A and IPO and the whole tax / tax agent / government tax agency cadre. It's not trickledown . It's deluge-up economics.

> Wealth is transferred from ordinary folk via the IPO-retirement-fund axis

Pretty much this. It's so infuriating to watch never-going-to-be-profitable businesses cash out on the backs of people's retirement accounts. It's one thing for a company's 401k to be stuffed with this crap, but when municipalities like CalPERS are investing in these indexes, it's outright criminal IMO.

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

#256

Post by kumarvvr » Mon, Jul 06, 2020, 1:21 PM UTC

0zymandias wrote: post #18

I am bullish on this as a recent shareholder. We are now in the consolidation phase of delivery service where fewer companies mean less competition, more efficiency and better economics. This is where Dara’s strength is. He has a history of great dealmaking and acquisitions. I expect Uber to thrive as the industry consolidates.

> fewer companies mean less competition, more efficiency and better economics

Can you explain this sentence? I always thought more companies, implies more innovation, and thus more efficiency.

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

#257

Post by eloisant » Mon, Jul 06, 2020, 1:22 PM UTC

the-dude wrote: post #222

user5994461 wrote: post #190

Earlier quoted context omitted.

A cheap pizza from Aldi is £1. A regular pizza with some toppings and maybe meat is £2-3 in most supermarkets. Could be £4 in higher end supermarkets. You see where this is going. Pizzas are worth nothing, supermarkets are making money on these (it's not allowed to sell an item at a loss in Europe). Domino produces for £1-2 and sell for £10-20. The accepted number in the restaurant industry is that food cost must be…

> (it's not allowed to sell an item at a loss in Europe). Do you have a source for this?

It's not a European legislation, but a law in some countries (including France).

This is dumping, and considered anti-competition.

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

#258

Post by badestrand » Mon, Jul 06, 2020, 1:25 PM UTC

duxup wrote: post #84

badestrand wrote: post #55

Earlier quoted context omitted.

> Margins are terrible, if they’re ever positive. It’s just a bad business. That's simply false. A lot of profit is made in the space and as soon as you have some significant market share it becomes a cash cow. Yes, it might not always work to start up in a already saturated market, but that shouldn't be a surprise.

Are food delivery services cash cows? I hadn't gotten that impression.

They can be, of course.

I worked in a food delivery company of the Just Eat group ~5 years ago, for 1.5 years. They take a comission of ~12% of the order price just by providing the platform to place orders. The technology is simple, then you have a sales team to acquire restaurants as partners and a customer service team to support when orders get lost or to update the menus.

Yes, there can be cut-throat competition in a market where a lot of money is sunk into marketing and the business is operating at a loss. But there are also consolidated markets where one platform captures >80% of all online orders and generates endless profits.

Just because a few VC-backed companies burn their many millions in a short time doesn't mean that there aren't large and very profitable food delivery services.

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

#259

Post by bluedino » Mon, Jul 06, 2020, 1:25 PM UTC

user5994461 wrote: post #190

squeaky-clean wrote: post #106

Earlier quoted context omitted.

> 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…

A cheap pizza from Aldi is £1. A regular pizza with some toppings and maybe meat is £2-3 in most supermarkets. Could be £4 in higher end supermarkets. You see where this is going. Pizzas are worth nothing, supermarkets are making money on these (it's not allowed to sell an item at a loss in Europe). Domino produces for £1-2 and sell for £10-20. The accepted number in the restaurant industry is that food cost must be…

You can't really compare a cheap frozen pizza to a chain pizza. They are bigger, for one.

I've read before that a Hot-n-Ready from Little Caeser's is sold for $5.55 but costs $3.50 in just ingredients. They don't make any money on those.

The breadsticks that they sell for $3.99, the cup of marinara for $1.99, the $13 veggie pizza and the $15 supreme pizza is where the money is made. Do you think there's an extra $10 in toppings on those supreme pizzas? Don't forget the bottles of soda..

http://www.unhappyfranchisee.com/little-caesars-what-franchi...

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

#260

Post by pessimizer » Mon, Jul 06, 2020, 1:29 PM UTC

AndrewUnmuted wrote: post #135

viburnum wrote: post #79

Clearly private industry has run out of profitable investments. Better to shift spending to public investments (science, education, err, the current public health emergency) than to waste more money on delivery boondoggles.

Unfortunately the recent trend of tearing down public statues probably doesn’t instill confidence that these kinds of corporate investments will be properly protected.

A statue isn't an investment these days unless it drives tourism. Statues of Confederate soldiers put up 70 years at the end of the Civil War were good investments at the time, because placing far cheaper signage displaying direct messages to black people from the local authorities would be seen as distasteful or possibly illegal (depending on the phrasing of the message.) A sudden unexplained affection for Nathan Bedford Forrest was a clear message, and cheap to maintain after an initial outlay.