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DoorDash from Application to IPO

blog.ycombinator.com

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Re: DoorDash from Application to IPO

#171

Post by darkwizard42 »

mbesto wrote: post #143
darkwizard42 wrote: post #26

Earlier quoted context omitted.

They just IPOed to the tune of $70B market cap... This comment really comes across as out of touch... The company just went public and based on their S-1 has been massively growing even pre-pandemic! (both huge measures of success)

> They just IPOed to the tune of $70B market cap... You must not be aware of what happened around the year 2000.

If you look at their S-1 there isn't a chance of this looking like what happened in year 2000. Way too much capital, way too low interest rates, and a real path to profitability

Re: DoorDash from Application to IPO

#172

Post by icedchai »

vincentmarle wrote: post #148

My 2 cts on the long term play of Doordash: The long term trend is that (primarily take-out) restaurants will decline and be replaced by ghost kitchens. The unit economics of ghost kitchens is much better than paying rent for prime real estate. You can run a ghost kitchen from a warehouse. This trend was already underway before covid [1] (see also Travis Kalanick's investments in this space) but has been 10x accelera…

I'm a bit skeptical. I've never ordered takeout from a restaurant I haven't been to first.

Re: DoorDash from Application to IPO

#173

Post by fuzzythinker »

icedchai wrote: post #172
vincentmarle wrote: post #148

My 2 cts on the long term play of Doordash: The long term trend is that (primarily take-out) restaurants will decline and be replaced by ghost kitchens. The unit economics of ghost kitchens is much better than paying rent for prime real estate. You can run a ghost kitchen from a warehouse. This trend was already underway before covid [1] (see also Travis Kalanick's investments in this space) but has been 10x accelera…

I'm a bit skeptical. I've never ordered takeout from a restaurant I haven't been to first.

That's because it isn't the norm currently, just like online shopping/mail orders wasn't the norm.

Re: DoorDash from Application to IPO

#174

Post by sokoloff »

SMAAART wrote: post #161
AlexandrB wrote: post #153

Earlier quoted context omitted.

Seems to me that it's both. I don't see VCs pouring billions in investments into new restaurants.

> I don't see VCs pouring billions in investments into new restaurants. Serious investors play in their niche: Restaurant investors don't invest in tech either. If your statement outlines a problem, how would you go about solving it?

I suspect that the 80th percentile best restaurant investor would be better off becoming a 20th percentile retail investor in tech.

Re: DoorDash from Application to IPO

#175

Post by graaben »

vpears87 wrote: post #103

Just eyeballing this, but trading at $180 gives DoorDash a market cap of $60 billion. The IPO priced it at $30 billion. Uber's market cap is $95 billion. Lyft's market cap is $14 billion. UPS's market cap is $120 billion. Delta's market cap is $40 billion. So with this naive analysis, I assume there is a lot of potential in last mile delivery. And moving things is more profitable than moving people. Or moving things…

I keep reading about how the long term play to justify the valuation is moving to last-mile delivery of retail, pharmacy etc. But there is a reason that Amazon distributes out of a central warehouse - it's much more efficient than sending individual drivers to a bunch of Walgreens around the city to pick up prescriptions.

Re: DoorDash from Application to IPO

#176

Post by standardUser »

vincentmarle wrote: post #148

My 2 cts on the long term play of Doordash: The long term trend is that (primarily take-out) restaurants will decline and be replaced by ghost kitchens. The unit economics of ghost kitchens is much better than paying rent for prime real estate. You can run a ghost kitchen from a warehouse. This trend was already underway before covid [1] (see also Travis Kalanick's investments in this space) but has been 10x accelera…

I had several bad experiences with ghost kitchens (low quality food) and now I look up ay restaurant before I order from them to make sure it has a storefront. Though usually you can tell by the absurd names most ghost kitchen places use.

Re: DoorDash from Application to IPO

#177

Post by jonas21 »

moxdahfox8 wrote: post #144

The dichotomy between this massive IPO making the founding team and investors rich and local restaurants shuttering in record numbers (partly due to losing 25% off the top to DD with no other options) is startling. A small case study on how inequality is growing in our country and tech like this is pouring fuel on the fire

Alternately, you could look at this as a dichotomy between local restaurants shuttering in record numbers due to inadequate government support for small businesses during a once-in-a-lifetime pandemic, and tech like this providing some of them with a lifeline to stay open (while also making the founding team and investors rich). A small case study in how the world is not necessarily a zero-sum game?

Re: DoorDash from Application to IPO

#178

Post by standardUser »

tempest_ wrote: post #168
bsder wrote: post #164

Earlier quoted context omitted.

> You can run a ghost kitchen from a warehouse. This trend was already underway before covid And it was already failing before Covid. Delivery requires proximity --every minute in delivery is a minute your food is shittier. And warehouses aren't proximate to residential in most places. Why do you think food trucks became a thing (and even they were declining)? They changed "proximate" to "immediate".

Yeah, I dont order from food apps too often because a lot food doesn't travel well. Most fried things are soggy by the time they reach you. Many people don't seem to care though.

This depends where you live. In NYC, I can get fried food delivered fresh almost every time. When I lived in SF, I wouldn't even dare order fried food because nothing was going to show up for at least an hour.

Re: DoorDash from Application to IPO

#179

Post by sxg »

tempsy wrote: post #67
sxg wrote: post #15

As a customer, DoorDash is just consistently a terrible experience. I have the DashPass, which was advertised as free delivery for many restaurants. Turns out it only works if you spend $12, and even then sometimes it doesn’t apply. If you check prices between the app and the actual restaurants’ websites, there’s often an extra $2-3 added on for each item on DoorDash (I don’t blame the restaurants). When it’s all sai…

The market doesn’t contemplate your reality and it doesn’t reflect you. Which is to say, pointing out that it’s expensive and you’d never use it without a coupon and for that reason find the business model not sustainable does not reflect how millions of other people think about and use the service, and how the market responds.

I agree with you, which is why I commented. I believe in the value of startups and their role in disrupting business to provide old services in a better way or to provide entirely new services. However, I also want startups to facilitate virtuous cycles so that all stakeholders move forward [1].

DoorDash fulfills the former but not the latter. DoorDash's business involves 3 stakeholders: restaurants, drivers, and end customers. DoorDash hasn't done well by drivers given the tip stealing scandal. DoorDash initially benefited restaurants by expanding their addressable markets, but as DoorDash now extracts substantial commissions and any modern restaurant is required to have a presence on DoorDash, they're essentially just rent-seeking. Regarding customers, this comment thread demonstrates how controversial DoorDash is. Yes, DoorDash provides a delivery service that didn't exist before, but they're also engaging in shady business practices (e.g. claiming free delivery with DashPass, the Chicago and Philadelphia fees designed to look like government taxes rather than additional DoorDash fees, and other dark patterns). In my opinion, DoorDash's net effect on the restaurant-driver-customer relationship is negative.

I think DoorDash has found a way to make a ton of money without actually creating a net good for the restaurant-driver-customer relationship. Kudos to DoorDash for finding a way to make tons of money, but I personally can't support any company that doesn't actually create a net positive value on society. I accept that I'm in the minority here as evidenced by DoorDash's market cap, but I hope my thoughts on this at least prompt a discussion about the value and role of startups in society.

[1] https://en.wikipedia.org/wiki/Virtuous_circle_and_vicious_ci...

Re: DoorDash from Application to IPO

#180

Post by ldec »

SMAAART wrote: post #158
moxdahfox8 wrote: post #157

Earlier quoted context omitted.

Small group of people (investors and early employees) pull in a ton of money while a big group of people (restaurant owners and employees) face worse economic outcomes. Similarly, private mkt investors get insane outcomes while retail investors end up buying at peak prices and less information. I'm not saying what DD did was unfair or unethical. We're just moving quickly to a very unequal society and this is a small…

Thank you for the explanation, so ok inequality of outcomes, but not inequality of opportunity. 2 more questions: 1. How is this a "problem"? 2. How would you go about solving it?

1. When this gets too extreme people start to ignore whether it is fair, logical or right, and respond with rage. People who have to close down, or feel poor, while they see a small group get crazy rich don’t care about economic theory, they just feel that something is wrong. Politicians use that rage to get elected and ‘fight for the people’, often implementing harmful policies to please angry crowds.

2. Australia has minimized this problem pretty well by having a pretty unregulated economy but a robust safety net.

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