DoorDash and Societal Arbitrage • Hacker News Board

Re: DoorDash and Societal Arbitrage

#101

Post by lhnz » Tue, Nov 17, 2020, 4:00 PM UTC

JumpCrisscross wrote: post #78

Heliosmaster wrote: post #42

Earlier quoted context omitted.

Incentive are not aligned anymore. Example: I order a pizza through Deliveroo. The driver doesn't care about either the restaurant or me, so he chucks the pizza vertically in his box, ruining it. I get a shitty pizza, I won't order anymore from the restaurant. Compare this with me calling up the restaurant and having one of their employees delivering the pizza: the restaurant has all the incentives for me to enjoy th…

> I order a pizza through Deliveroo I used Deliveroo for the first time in London a few months ago. It was the worst delivery experience I have ever had. Deleted after two tries. My experience with Caviar, UberEats and ChowNow have been immeasurably better. As evidenced by their having live chat and phone support to Deliveroo’s e-mail only two-day turnaround support.

I had a positive support experience.

The delivery driver delivered me somebody else's order. Within 10 minutes, they had refunded me, and were re-preparing my original order (which I received 30 minutes later). I also got to keep the wrong order - I stuck it in the fridge.

Even though the situation was a bit of a mess, the live support worked well for me.

Re: DoorDash and Societal Arbitrage

#102

Post by remote_phone » Tue, Nov 17, 2020, 4:04 PM UTC

cmeacham98 wrote: post #25

remote_phone wrote: post #18

Earlier quoted context omitted.

Prop 22 was not the way to do it. I’m glad that terrible law was correctly voted down by California. It is clear that people want flexibility. The fact that Prop 22 had to have over 100 exclusions because it broke so many other industries reeks of bad code smell. It was a badly written law and badly written laws need to be reversed. In the end, drivers got better protections and guarantees but remained flexible and i…

Maybe you're not aware, but prop 22 actually passed and helps gig economy companies like DoorDash .

Yes I meant AB5, my mistake.

Re: DoorDash and Societal Arbitrage

#103

Post by winded_italics » Tue, Nov 17, 2020, 4:09 PM UTC

TeMPOraL wrote: post #54

fxtentacle wrote: post #51

"We know restaurant ‘partners’ are a flight risk because this is not a genuine partnership, it’s extractive." In my area, there's a pizza shop that is doing well. They also sell on Takeaway.com. But if you order through that - like I initially did - they'll give you a small business card that says "Did you know that our prices on Takeaway.com are 15% higher to compensate for the fees that they charge us?" And on the…

Clever, but how long until Takeaway.com and others add a clause in their contract against putting such business cards in their order? These companies have power over restaurants, because they can ruin a restaurant's reputation until it yields and accepts the new contract.

Takeaway needs the restaurants otherwise their service is useless.

Re: DoorDash and Societal Arbitrage

#104

Post by aaisola » Tue, Nov 17, 2020, 4:17 PM UTC

If we consider Doordash's approach to be similar to Amazon's then companies such as Chownnow and Ritual are more equivalent to Shopify. They want to arm mom and pop restaurants with the tools to enable delivery without the hefty commissions and fees. I know that personally I don't want to live in a world dominated by chain restaurants and sub-standard options simply because they are the only ones with power to negotiate favourable terms with Doordash etc.

Re: DoorDash and Societal Arbitrage

#105

Post by timecube » Tue, Nov 17, 2020, 4:22 PM UTC

tartoran wrote: post #66

TeMPOraL wrote: post #54

Earlier quoted context omitted.

Clever, but how long until Takeaway.com and others add a clause in their contract against putting such business cards in their order? These companies have power over restaurants, because they can ruin a restaurant's reputation until it yields and accepts the new contract.

How long until some actor emerges who provides a network of ordering sites hosted on the cloud that charge $30-50 a month for each restaurant and nothing more? As margins get thinner and thinner this is inevitable. And no marketing needed, if the service is good word of mouth would do it.

ChowNow is exactly this: https://get.chownow.com/

Re: DoorDash and Societal Arbitrage

#106

Post by boringg » Tue, Nov 17, 2020, 4:22 PM UTC

Am I the only one who has feels bad buying food with online delivery services but also feels an obligation to support the restaurants? Not only because the margins the companies are taking, but the guilt with how much to tip the driver (is the company providing them salary of some sort?).

However there is no other easy way to buy food without doing significant amount of research and then most of these companies are reliant on the online ordering for inbound sales anyways. It's a total cluster.

Probably a downvote here but I don't feel good making investment money on an extractive business like this - i.e. I'm not going to buy stock. Even though these services are lifelines during the pandemic, I wonder if they are a faustian bargain of sorts in the long-run understanding full well that in the short-run the alternative is to shutdown.

The sad future: I think the executives and staff will make off and the retail investors will be holding the bag as well as the shutdown restaurants and employees laid off.

The happy future: Some/most restaurants survive pandemic and ease off their online habits, stock stabilizes/investors take a hit and people go back into restaurants. Online delivery services companies market caps take a nose dive.

Re: DoorDash and Societal Arbitrage

#107

Post by dpiers » Tue, Nov 17, 2020, 4:34 PM UTC

labcomputer wrote: post #97

lacker wrote: post #9

To 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…

I don't know how driver pay compares pre- and post-appshare, but on the consumer side, my experience differs from yours. To me, it seems that DoorDash et. al. are delivering negative value to the consumer. My recollection is that most restaurants with takeout also had a delivery option, usually at a smaller percentage cost than DoorDash takes. But, more than that, delivery worked better . Restaurants typically only o…

I was raised in a family-owned independent sandwich shop where half of sales came through delivery. I also work at Uber, although not on the Eats side, so my opinion is informed but potentially biased.

Bandwidth is the biggest problem small restaurants have in managing a delivery service. If you don't have enough drivers to meet peak demand, you have to either decline orders or make customers mad when their order takes >1 hour to arrive (and disgruntled customers don't typically re-order or tip well). If you have too many drivers, they are making less in tips and you are probably spending more to bring their tipped wage up to minimum wage - and if it happens often they are going to quit.

I remember my dad disconnecting the phone at the store when they got too may orders to handle. We ended up using my mom and siblings as the flex/surge delivery capacity. If delivery apps had existed at the time, he would have gladly traded the headache of employing drivers and managing capacity for the ability to make and sell as many sandwiches as he could. In todays' world, if he got 12 orders going to different parts of town at the same time, he could accept all of them and know that if he could make the food, someone would be able to deliver it.

Delivery networks also increase courier efficiency by adding the ability to batch deliveries from multiple restaurants and avoiding the need to round-trip every order back to the restaurant when you are done. Couriers on Eats/DD can drop off one meal and be dispatched another from a restaurant nearby, and don't need multiple people who live near each other to order from the same restaurant at the same time in order to have efficiently batched trips.

There are efficiencies in the network model that can't easily be replicated by individual restaurants with their own drivers. The gold standard is Dominos but they are a behemoth that can't compare to any other restaurant - they are singlehandedly as large as Doordash.

Re: DoorDash and Societal Arbitrage

#108

Post by paulus_magnus2 » Tue, Nov 17, 2020, 4:36 PM UTC

It always baffles me, how do these companies get to get that far. OK, it is possible to get your friends to fund you after you describe the innovative idea, then perhaps it's possible to get an Angel to invest into your uber after you explain the losing business is only temporary to capture the market and the ultimate goal is a self-driving taxi.

Wishing for self-driving cars is easy, building them not so much. But Pizza delivery unicorn based on some arbitrage?? Come on, at least develop a fleet of food trucks in which the pizza is cooked along the way. Baking a Pizza takes 6mins, add 2-3 for preparation so the order can be prepared along the way. No need to get back to the restaurant. This gives you 2x efficiency of the delivery person ($15/h). Equipping a restaurant is probably $200k+, a food truck closer to $50k which gives 4x capex efficiency. Perhaps in the future the pizza can be made by a robot saving you one person (50%) of the personnel. There is room for efficiency.

Here in Europe during Lockdown take away pizza was €2 cheaper, around €8 instead of €12+. I cannot imagine how someone selling it cheaper is anything but a pyramid scheme / attempt to corner the market.

Re: DoorDash and Societal Arbitrage

#109

Post by TeMPOraL » Tue, Nov 17, 2020, 4:45 PM UTC

impendia wrote: post #83

TeMPOraL wrote: post #54

Earlier quoted context omitted.

Clever, but how long until Takeaway.com and others add a clause in their contract against putting such business cards in their order? These companies have power over restaurants, because they can ruin a restaurant's reputation until it yields and accepts the new contract.

> Takeaway.com and others add a clause in their contract against putting such business cards in their order? Possibly, buried in the fine print somewhere, but enforced by whom? Aside from the restaurants, only the drivers will see the food. Will they be ratting out the restaurants to their corporate overlords? I doubt it.

They can hire delivery-driver-equivalents of mystery shoppers - better paid workers whose primary job is spot-checking ToS compliance. Or they'll just pay someone to order random stuff from random restaurants and report what they get, under guise of quality assurance.

It's how trust-based arrangements are handled in other industries.

Re: DoorDash and Societal Arbitrage

#110

Post by ketzo » Tue, Nov 17, 2020, 6:48 PM UTC

labcomputer wrote: post #98

thrav wrote: post #70

Earlier quoted context omitted.

If a delivery driver gets a series of 1-star reviews, you can bet they’re getting kicked off the platform. + DoorDash actually does refund quite frequently for food issues.

The problem is that appshare all have fairly high turnover, even of "good" drivers. Just look at how much Uber spends attracting new drivers. The end result is that there is a constant stream of new, unrated drivers, who can ruin your pizza. With drivers paid by the restaurant, you tended to get the same delivery guy (or a small set of delivery guys) for years at a time.

Yet another reason that Prop 22 was a total farce... imagine thinking that a salaried employee would provide worse service than someone who's only gonna work at Doordash for 26 hours.