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DoorDash from Application to IPO

blog.ycombinator.com

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Re: DoorDash from Application to IPO

#231

Post by kazamaloo »

boberoni wrote: post #48

Congratulations to DoorDash! Their IPO is quite an achievement. I'm curious to see what the state of aggregated food delivery will be in, say, 2024. Not too far in the future, but long enough for losers to start giving up. My current understanding is that DoorDash-like start-ups are consistently in the red. The upfront expenditure on engineering and marketing for a 3-sided marketplace is huge. The business model woul…

Was asking the same question myself. I am also on the same boat -- flipping through the apps to compare the prices. I thought maybe we are the minorities and the general public just downloads a single food delivery app. The same goes for ride hailing apps, too. An aggregator app that combines every delivery app may disrupt the system. Or maybe they will go for restaurant exclusivity instead of user loyalty. I don't know.

Re: DoorDash from Application to IPO

#232

Post by nmfisher »

hardwaregeek wrote: post #225
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…

A good middle ground between a ghost kitchen and a full on restaurant is the food court model. Restaurants get to pay a little less for rent, keep some in person dining but mostly focus on takeout.

I relocated to Singapore earlier in the year, and I have to say that the hawker centres here are amazing.

I know the economics require a bit of government intervention (and it only really works in a dense urban environment), but I would love to see more governments embrace this model.

That being said, I also expect that implementing this somewhere like Australia would also require a lot more security to deal with drunks, thieves and generic shitheads. So a lot of it is cultural.

Re: DoorDash from Application to IPO

#233

Post by throwdbaaway »

rkho wrote: post #142
jannotti wrote: post #135

Earlier quoted context omitted.

Grubbhub, Seamless, Eat24, Foodler, DiningIn. They were all around and fairly large by then. But they didn't go big on spending VC money, so over time DoorDash wins. Pretty interesting, however it turns out.

Sorry I'm going to have to call on this. Until on-demand delivery companies like Doordash/Postmates came onto the scene, the vast majority of places I could have ordered delivery from were the standard fare of pizza, Chinese, Indian, and Thai food within a half mile radius from my home. What this generation unlocked was the ability to pay someone to grab you House of Prime Rib on Van Ness and deliver it halfway acros…

I think the problem is that this achievement is unlocked mostly by subsidy. Without subsidy, many would just go back to the standard fare of pizza, Chinese, Indian, and Thai food within a half mile radius.

We will first have to wait and see whether the on-demand delivery business model will work out in a cheaper country, e.g. GrabFood in Indonesia. Even in such country, my sense is that the restaurants are still getting charged too much to cover for the subsidy given the customers, while the delivery riders are still being paid too little and have to rely on infrequent big tips.

Re: DoorDash from Application to IPO

#234

Post by joegibbs »

ramphastidae wrote: post #228
standardUser wrote: post #176

Earlier quoted context omitted.

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.

I’ve experienced the same thing. It makes sense. Ghost kitchens are a purely profit-motivated enterprise. Local restaurants are for-profit, but also places where hospitality, socializing, community, etc. has value. I would expect the food to reflect that.

Plus, if you’re an actual restaurant it’s a lot harder to rebrand if people don’t like what you’re doing. They’ll notice it’s the same people, the same location and a similar menu, but if you’re a ghost kitchen that gets bad reviews you can just shut down Phil’s Mouthwatering Mexican and open up Tabasco Flavour Tacos the next day.

Re: DoorDash from Application to IPO

#236

Post by vadym909 »

sjg007 wrote: post #217
bussierem wrote: post #203

Earlier quoted context omitted.

I think the implication wasn't that DD was pouring fuel on to the fire of "restaurants closing", but rather that when they, a company that works with restaurants (many of which are closing) are doing so well that they can IPO to the tune of $60B and make their founders/investors VERY rich, this can pour fuel onto the fire of "tech companies making money at the expense of others". I feel that regardless of your feelin…

If DD didn’t exist it’s be someone else.. but if there was no delivery most people would pick up take out like before. I don’t mind paying a delivery fee. It’s kinda like the tip when you dine in person..

The 25% fee goes mostly to DD, not to the driver who delivered. DD and other app's value is removing the friction of ordering and paying. Of all the participants in the supply chain- farmer, cook, business owner, delivery guy- the ordering app (tech) took the most outsized piece of the pie.

To be fair though, not all tech is similar. I don't think people mind Amzn charging the seller 5-15% and paying the delivery guys whatever it takes. I hope food delivery apps become more reasonably priced- or then maybe Amzn comes after their margin!

Re: DoorDash from Application to IPO

#237

Post by sombremesa »

the_economist wrote: post #207
standardUser wrote: post #176

Earlier quoted context omitted.

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.

I was extremely excited about ghost kitchens and have had been disappointed by similar experiences with them all providing low quality food. I'm still optimistic that the supply will shape itself over time and eventually a market for high quality food ghost kitchens will emerge.

This seems unlikely to me because most good chefs seem very interested in interacting with their customers - in many cases it's the one redeeming factor in an otherwise brutal industry.

Re: DoorDash from Application to IPO

#238

Post by sombremesa »

joegibbs wrote: post #234
ramphastidae wrote: post #228

Earlier quoted context omitted.

I’ve experienced the same thing. It makes sense. Ghost kitchens are a purely profit-motivated enterprise. Local restaurants are for-profit, but also places where hospitality, socializing, community, etc. has value. I would expect the food to reflect that.

Plus, if you’re an actual restaurant it’s a lot harder to rebrand if people don’t like what you’re doing. They’ll notice it’s the same people, the same location and a similar menu, but if you’re a ghost kitchen that gets bad reviews you can just shut down Phil’s Mouthwatering Mexican and open up Tabasco Flavour Tacos the next day.

Don't even have to shut one down.

Re: DoorDash from Application to IPO

#239

Post by bamboozled »

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…

Do you actually know of any good "take out" only restaurants that don't have people eating there? I don't.

I live in a city so maybe that's the difference, but one things for sure, if people could be in there, sitting at a table enjoying food with their friends, they would be.

Re: DoorDash from Application to IPO

#240

Post by yding »

elpakal wrote: post #9

Love it! It's great to see initial skepticism from YC about how this wasn't working. I feel like you see IPO write-ups like these and it's always implied that everyone around them always knew they were going to make it. That said, I searched the entire article for the words "luck" and "lucky" and see none. No doubt the pandemic and WFH life helped them, and that's something even YC couldn't have predicted.

I remember when GrubHub was still significantly bigger and it looked like Amazon was going to make a serious play in the space.

Certainly the pandemic helped with mass adoption but they've also just built a more competitive product.

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