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DoorDash Buying Caviar from Square for $410M

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Re: DoorDash Buying Caviar from Square for $410M

#111

Post by alfalfasprout »

Eridrus wrote: post #57
XMPPwocky wrote: post #8

For what it's worth, the general vibe I've gotten from couriers has been that Caviar is one of the best food delivery apps for them, and that DoorDash is among the worst.

As a user though, Caviar is the worst delivery service I have ever used though. Food is often cold & sometimes wrong across 3 cities. I have stopped using it, even when it is the only option for a restaurant I like.

Super interesting it varies by person. Caviar has had the best delivery experiences consistently and if I've ever had an issue like a squished pizza they immediately dispatched a new one or gave me a refund. Plus they are cheaper than Uber Eats (the consistently worst app for me) and Doordash delivering to Pacific Heights/Cow Hollow in SF.

Re: DoorDash Buying Caviar from Square for $410M

#112

Post by hnuser132 »

jonfw wrote: post #91
hnuser132 wrote: post #84

Earlier quoted context omitted.

While this was definitely not clear to the consumer, it ended up being a preferable model for the drivers as they would get a higher pay on most orders. Not saying that it should be that way, but saying they did that just to steal tips is not true. It was used to guarantee a minimum amount on orders that don't make sense financially.

What the company should have done, ethically, is to just increase base compensation for drivers. You shouldn't be able to dynamically change base compensation based on the quality of the tip that the driver is rewarded, that is pretty antithetical to the entire idea of a tipping economy.

That's a very valid viewpoint and what's done by Grubhub or Caviar I believe. But it results in lower pay for the drivers overall because the guaranteed minimum is lower than the one DoorDash usually offers.

Re: DoorDash Buying Caviar from Square for $410M

#113

Post by wpietri »

4ntonius8lock wrote: post #34
dewitt wrote: post #10

The price seems high for something Square presumably needed to unload. Who else would have been bidding it up? And why are food delivery businesses still in a bubble? That's not a slam on businesses in a bubble phase, either. Many industries go through one before settling into a steady, sustainable state. Just surprised that delivery is still in one, while related industries, like ride-share are cooling off.

I'm guessing like most things in the US: investors are looking to consolidate so they can get into monopolistic positions and extract resources from the market once they have it cornered. The risk of legislative intervention into such anti-competitive market manipulations is virtually zero. If they get big enough, next time they steal wages, they won't have to back down. Heck, if they get big enough, they can steal w…

I'm not sure why you're getting downvoted. The valuation of quite a number of hot companies doesn't make any sense unless they can extract oligopoly rents.

As an example, take Uber. The Economist recently asked whether it can ever make money. [1] And events in the months since don't make it any clearer. [2]

I think tech's wave of quasi-monopolies (Google, Facebook, Amazon) gave investors the notion that similarly dominant players could be established in non-tech fields if they were dressed up as technology plays. So we see absurd amounts of cash being poured into things like Uber and WeWork. Unlike the previous players, we also see them going to IPO while they're still losing money.

And sadly, I think you're right about regulatory laxness. Antitrust regulation has been out of fashion for a long time. And if we see it come back, it could well be more an authoritarian political tool than any actual attempt to ensure competitive markets.

[1] https://www.economist.com/business/2019/04/27/can-uber-ever-...

[2] https://www.economist.com/business/2019/04/27/can-uber-ever-...

Re: DoorDash Buying Caviar from Square for $410M

#114

Post by chipotle_coyote »

r1nkgrl wrote: post #107
aianus wrote: post #100

Earlier quoted context omitted.

The entire point of the tipping system is to have a high variance. The promise, but not guarantee, of tips is what is supposed to incentivize better service.

But in the case of the DoorDash, if you tip using the app, you tip long before you know what the service will be. It's like walking blindfolded into a restaurant and putting your tip in the hostesses hand before you even see any of the staff, or have any indication of service.

That's true, although to be fair, there's only so much a delivery driver can do service-wise compared to a waiter. Your only interaction with the driver is picking up the order. The driver isn't responsible for the time the restaurant takes to get the food to them, and isn't even entirely responsible for the time it takes to get the food from the restaurant to you -- there's traffic, weather, and the possibility that DoorDash demands they batch orders (something I've heard but haven't confirmed). I'm not sure it's fair to hold a third-party delivery driver responsible for the correctness of the order, either, rather than the restaurant.

Re: DoorDash Buying Caviar from Square for $410M

#115

Post by chipotle_coyote »

notyourday wrote: post #71
pradn wrote: post #54

Earlier quoted context omitted.

New types of restaurants are popping up: 1) Ghost kitchens that only serve via delivery apps. You can save on rent by setting it up in an area with no foot-traffic. You can also get economies of scale. 2) Restaurants with dedicated entrances for delivery drivers. Baar Baar in NYC has a separate place where delivery workers can wait. In other restaurants, they have to wait in the limited dining area. One hopes that th…

> 1) Ghost kitchens that only serve via delivery apps. You can save on rent by setting it up in an area with no foot-traffic. You can also get economies of scale. You can't. This is the kind of a mistake that all first time entrepreneurs make. Delivery costs too much money. Logistics of getting your labor force to your kitchen is a nightmare. > 2) Restaurants with dedicated entrances for delivery drivers. Baar Baar i…

I'm not sure why all the downvotes here, either. In the SF Bay Area, several companies have tried to be "delivery only restaurants" and they've mostly all been failures -- some spectacular VC-assisted flameouts, some quiet fades.

Re: DoorDash Buying Caviar from Square for $410M

#116

Post by SilasX »

jonknee wrote: post #109
SilasX wrote: post #93

Earlier quoted context omitted.

Every pizza chain.

They make money selling pizza (super high margin), not at delivery.

It's a distinction without a difference. It's not like they lose money by offering the delivery service, so they've found some model where delivering food is profitable, it's just that the model involves a tight coupling with the food producer.

It might be more accurate to say that food delivery as a separate business from producing it is hard to profit on.

Re: DoorDash Buying Caviar from Square for $410M

#117

Post by chipotle_coyote »

It's odd, in that I never really thought about Caviar as a competitor to DoorDash -- but that's because I know them mostly as the company that bought Zesty (just before Caviar itself was bought by Square). Zesty specializes in catered group meal delivery. The company I'm at now uses Zesty once a week; the company I was at before used them five days a week, and the company before that used a competitor (ZeroCater, I think) five days a week.

As far as I know, DoorDash wasn't in that space before; I wonder if that's part of the reason for the acquisition. (The alternative is that they may not be interested in that side of the business at all and shut it down.)

Re: DoorDash Buying Caviar from Square for $410M

#118

Post by 4ntonius8lock »

wpietri wrote: post #113
4ntonius8lock wrote: post #34

Earlier quoted context omitted.

I'm guessing like most things in the US: investors are looking to consolidate so they can get into monopolistic positions and extract resources from the market once they have it cornered. The risk of legislative intervention into such anti-competitive market manipulations is virtually zero. If they get big enough, next time they steal wages, they won't have to back down. Heck, if they get big enough, they can steal w…

I'm not sure why you're getting downvoted. The valuation of quite a number of hot companies doesn't make any sense unless they can extract oligopoly rents. As an example, take Uber. The Economist recently asked whether it can ever make money. [1] And events in the months since don't make it any clearer. [2] I think tech's wave of quasi-monopolies (Google, Facebook, Amazon) gave investors the notion that similarly dom…

> And if we see it come back, it could well be more an authoritarian political tool than any actual attempt to ensure competitive markets.

I think for there to be political will to redistribute the power that concentrates in monopolies, there needs to be a clear rallying cry.

When you look at the trust busters of the 20th and 19th century, they had a clear rallying cry from the masses: improve working conditions.

I wonder if with automation taking over, the new rallying cry will be UBI? I mean, to pay for such a thing, you need to redistribute social wealth, which is now concentrating in monopolies.

People notice the concentration of money, and the lack in other parts, more than the particulars of how markets work. Then the rallying cry brings about change in unexpected ways, maybe? I don't know, but I'm hopeful.

As to getting downvoted, I'm not surprised, my take: Many people in tech now are very idealistic and have a lot vested into the companies they work with. They truly believe door dash is about 'empowering small businesses' (or whatever pretty words their employer has on the about us).

And the thing is, doordash does do that. But the reason for it's valuation, and the ultimate purpose of the investors, is rent seeking. Providing service is the way to get people hooked, it's a secondary consideration for these investors. So anything that directly or indirectly highlights this discrepancy between what the workers are trying to achieve and what the ultimate company beneficiaries are trying to achieve, will be viewed with hostility by those who so truly want to make the world a better place. Which I think is the majority here. :)

Re: DoorDash Buying Caviar from Square for $410M

#119

Post by dtparr »

chipotle_coyote wrote: post #114
r1nkgrl wrote: post #107

Earlier quoted context omitted.

But in the case of the DoorDash, if you tip using the app, you tip long before you know what the service will be. It's like walking blindfolded into a restaurant and putting your tip in the hostesses hand before you even see any of the staff, or have any indication of service.

That's true, although to be fair, there's only so much a delivery driver can do service-wise compared to a waiter. Your only interaction with the driver is picking up the order. The driver isn't responsible for the time the restaurant takes to get the food to them, and isn't even entirely responsible for the time it takes to get the food from the restaurant to you -- there's traffic, weather, and the possibility that…

It seems like what you're arguing is that delivery drivers should not be a tipped class, but instead just guaranteed a higher rate.

Re: DoorDash Buying Caviar from Square for $410M

#120

Post by erikpukinskis »

wufufufu wrote: post #45

This is the kind of announcement where all three companies put out a happy blog post and no one knows the actual reasoning behind the acquisition or sale. New business model for Square?: Acquire companies, onboard them onto Square's business platform, sell them

That’s not a bad idea.
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