DoorDash and Societal Arbitrage
themargins.substack.com
DoorDash and Societal Arbitrage
1–10 of 124 posts
Re: DoorDash and Societal Arbitrage
#2Favorite part of this was learning about the $6,000 golden shower curtains from the 2002 Tyco scandal.
Re: DoorDash and Societal Arbitrage
#3> A hidden loophole, meant for small businesses, co-opted by multibillion-dollar tech companies to avoid accountability, just because they can.
There are a lot of issues with this newsletter, but this bit at the end stuck out. The 'loophole' is for companies with
- total annual gross revenues less than $1.07 billion and
- less than $1 billion in non-convertible debt in the past three years and
- not a “large accelerated filer,” as defined in Exchange Act Rule 12b-2
The newsletter is trying to make this sound like it was meant for mom-and-pop shops, but how on earth can you have revenues of more than $1.07 billion without being a "multibillion-dollar" company?
Re: DoorDash and Societal Arbitrage
#4https://themargins.substack.com/p/doordash-and-pizza-arbitra...
The previous article should be required reading for anyone trying to understand how crazy this era is.
Re: DoorDash and Societal Arbitrage
#5I do remember well how Uber drivers in Moscow were very eager to drive themselves when it became clear that Uber pays for your ride in rush hours, and then Uber just left Russia.
Yandex, which never felt to such idiocy, then scooped their remaining business for a symbolic sum.
Re: DoorDash and Societal Arbitrage
#6https://themargins.substack.com/p/doordash-and-pizza-arbitra... The previous article should be required reading for anyone trying to understand how crazy this era is.
It’s also linked in the very first sentence of this article.
Re: DoorDash and Societal Arbitrage
#7Add to this that DoorDash, Uber, etc have given authority over wages and performance evaluations directly to the customers. (Through the practice of delegating tips and ratings to the end user.)
There's a clear imbalance of power there -- it costs the customer nothing to not tip or to leave a one star review. But those things could absolutely impact someone's earning potential as a worker.
Consider how many people seemingly enjoy being petty tyrants when given the opportunity, and the story gets worse and worse for the worker.
I always recommend that people always give five stars and a generous tip (until we outlaw typing). It's not my job to narc on your workers, Uber.
Re: DoorDash and Societal Arbitrage
#8Add to this that DoorDash, Uber, etc have given authority over wages and performance evaluations directly to the customers. (Through the practice of delegating tips and ratings to the end user.) There's a clear imbalance of power there -- it costs the customer nothing to not tip or to leave a one star review. But those things could absolutely impact someone's earning potential as a worker. Consider how many people se…
Uber essentially insisting you give everyone 5 stars just makes the railings meaningless. It’s much better for customers to defect from that game.
It’s the same issue with tipping. The larger the standard tip the more power you give to people that defect and tip nothing. Essentially, high tips simply subsidize freeloaders, it’s much better for society to avoid restaurants or services that use tips.
Re: DoorDash and Societal Arbitrage
#9To me, this is the key claim of the article:
This is not a genuine partnership, it’s extractive.
Is DoorDash extracting money from its users, the restaurants and the delivery drivers? Or is it actually providing something of value?
To me, the delivery apps like DoorDash and Uber Eats just work a lot better than calling up restaurants for delivery did in the pre-app era. Maybe the drivers are underpaid, maybe the restaurants are underpaid, maybe the food costs too much, but even if they end up charging more money, are they really going to go away like Groupon did? I don't think so, the underlying product is just too valuable. So, I don't agree with this claim. There's a real partnership here. It just hasn't settled down.
As long as the business space is real, DoorDash and Uber Eats and the others are just going to fight tooth and claw to win it. That means discounting the real price, that means raising money at whatever valuation they can get, that means turning the screws on all partners to squeeze out more money. All of this seems like craziness, and it is, but it's craziness in pursuit of winning a prize that really does exist.
Some industries, like the music industry, once they settle down it turns out that one of the players has very little pricing power. I think that might happen here for drivers and for the sort of restaurant that isn't differentiated. But like music, it won't just go away, it'll be a new business structure that perhaps dominates the industry.
Re: DoorDash and Societal Arbitrage
#10To me, this is the key claim of the article: This is not a genuine partnership, it’s extractive. Is DoorDash extracting money from its users, the restaurants and the delivery drivers? Or is it actually providing something of value? To me, the delivery apps like DoorDash and Uber Eats just work a lot better than calling up restaurants for delivery did in the pre-app era. Maybe the drivers are underpaid, maybe the rest…
The question is, if the prices were raised to sustainable levels, would the market be big enough to justify the amount of unsustainable spending that is going on right now to capture it?