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Doordash and Pizza Arbitrage

themargins.substack.com

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Re: Doordash and Pizza Arbitrage

#121

Post by slg »

craigc wrote: post #76

This is the sad state of VC funding in this day and age. I can’t help but wonder if movie theaters could have exploited a similar loophole with MoviePass before they went bankrupt. Something like this: 1. Movie theaters buy up MoviePass subscriptions 2. They use those subscriptions to pick different movies to see every day at their location If they picked 30 movies a month that would be approximately $450 a month in…

Theaters still have to report tickets sold and kick back roughly 50% of the ticket price, so you would need to cut that revenue number in half. Also I don't remember the exact timeline for Moviepass's various restrictions, but there was a limit on the upside at various times due to policies like preventing users from watching movies multiple times (which would generally cap the max tickets below 30 since most theaters don't get 30 new movies a month), limits on how many tickets can be purchased for a single theater that would lock users out from using that theater for the rest of the day, and users being suspended for "fraud" that was often reported to be just heavy use.

Re: Doordash and Pizza Arbitrage

#122

Post by 333c »

9nGQluzmnq3M wrote: post #32
bransonf wrote: post #15

Reading the title, I anticipated this was going to be something along the lines of getting Domino's delivered for less than their delivery fee. (Side note, does anyone actually order franchise pizza on an app? They all already deliver for far less) But this was far more interesting. The fact that Doordash scrapes prices, and apparently doesn't verify... how does this happen? I'm not familiar with the reimbursement mo…

> The fact that Doordash scrapes prices, and apparently doesn't verify... how does this happen? It kind of happens by default if your goal is "growth at any cost". The video you mention is likely this one, and it's actually even more extreme: https://www.youtube.com/watch?v=bqPARIKHbN8 The fake restaurant in their garden shed, which never took customers or delivered any food , climbed up to #1 best restaurant in Lond…

While that is a good video (and demonstrates manipulation of TripAdvisor), I'm pretty sure the commenter means this one: https://www.youtube.com/watch?v=k47u9tduwb8

This video features (a) delivery and (b) reimbursement, both mentioned in the original comment but not present in your video.

Re: Doordash and Pizza Arbitrage

#123

Post by ViViDboarder »

imgabe wrote: post #78
6nf wrote: post #69

Earlier quoted context omitted.

A bunch of delivery 'drivers' here in sunny Sydney just use a bicycle - and they're often just students or backpackers etc making a couple of bucks in the afternoon while getting fit. They're happy to make $10 an hour which would normally be illegal under Australian employment laws. It's hard for a local pizza shop to compete with this kind of thing and the sheer scale of Uber Eats.

Unfortunately in the US you get people screaming that those drivers are criminally underpaid and are being exploited by heartless capitalists. Because of course random Internet commenters are better able to judge the drivers' priorities and desires than the drivers themselves.

Are you seriously arguing that the drivers would rather be underpaid than get paid a fair wage?

The argument is not that these people shouldn’t be able to find work, but that they should get paid fairly for the work they do.

Re: Doordash and Pizza Arbitrage

#124

Post by ViViDboarder »

spurdoman77 wrote: post #57
dvduval wrote: post #20

The restaurants need to work through their own trade organization where they band together and push out the delivery businesses that are costing them money, and then allow delivery companies to bid for their business.

In the end the customer needs some single easy interface where to order food from. It is kind of difficult to see how this could work in a way where restaurants would dictate how customers prefer to order.

Yelp actually provides a platform that integrates ordering from multiple providers into listings.

Re: Doordash and Pizza Arbitrage

#125

Post by chongli »

ngngngng wrote: post #64

I don't understand why doordash, uber eats, deliveroo, and similar business are starting to exist. Restaurants have been running successful delivery operations independently for ages. And there are many software offerings to help businesses get set up with delivering food. Why do we need a centralized on? Is it just the benefit of being able to browse in one app/website everything available for be delivered to you?

Is it just the benefit of being able to browse in one app/website everything available for be delivered to you?

It's not just that, it's also a centralized payment system. You set up your account and you can order from any restaurant on the app without having to give them your address+payment info. Couple that with very simple, centralized dispute resolution and refunds as well as notifications of special offers. It's very, very convenient.

The economy of scale for the drivers is also much better with a centralized model. Instead of every mom and pop restaurant having to hire their own delivery staff there is one centralized pool of drivers available to everyone. A lot of restaurants just don't get consistent enough demand to hire a full-time driver.

Re: Doordash and Pizza Arbitrage

#126

Post by kbaker »

inquiryaccount wrote: post #51

This reminds me of a post I submitted a few weeks ago on HN. A friend of mine works for a restaurant group in NYC and they like many they have had to respond by offering delivery to folks in order to keep some revenue flowing. He and I were chatting and he mentioned that lately, a large majority of high value ($500+) orders were fraudulent with the fraudster ordering things that can be resold such as high-value wine,…

Well, since DoorDash is listed as the copyright holder on the bottom of www trycaviar com it looks like DoorDash is just bleeding their $400mm series F out under a different name.

Maybe have them try the arbitrage themselves per the article and put the profit _and_ the booze directly in their pockets... (/s?)

Re: Doordash and Pizza Arbitrage

#127

Post by imgabe »

ViViDboarder wrote: post #123
imgabe wrote: post #78

Earlier quoted context omitted.

Unfortunately in the US you get people screaming that those drivers are criminally underpaid and are being exploited by heartless capitalists. Because of course random Internet commenters are better able to judge the drivers' priorities and desires than the drivers themselves.

Are you seriously arguing that the drivers would rather be underpaid than get paid a fair wage? The argument is not that these people shouldn’t be able to find work, but that they should get paid fairly for the work they do.

I am arguing that they would rather be paid some wage rather than have no job available.

A backpacker who just wants to make enough money to get to their next destination probably doesn't want to deal with the overhead of taking on a full-time job and is happy to have the flexibility in exchange for less money.

Fair is determined by the two people who are party to the transaction. If they both agree to it, then they consider it to be fair. If it is unfair, they are free to decline. The opinions of unrelated third-parties about whether a transaction is "fair" are irrelevant.

Re: Doordash and Pizza Arbitrage

#128

Post by dylz »

masonic wrote: post #109
dylz wrote: post #107

Earlier quoted context omitted.

The driver pays with a Doordash prepaid-reloadable card. When the driver GPS-checkins at the restaurant they're picking an item up at, the card is loaded with the exact balance the restaurant is "supposed to charge"

This mechanism reminds me of Moviepass.

This is basically the same backing service, corporate-issued "cards"

Re: Doordash and Pizza Arbitrage

#129

Post by dylz »

astura wrote: post #116
dylz wrote: post #107

Earlier quoted context omitted.

The driver pays with a Doordash prepaid-reloadable card. When the driver GPS-checkins at the restaurant they're picking an item up at, the card is loaded with the exact balance the restaurant is "supposed to charge"

At that point door dash still thinks the pizza will cost much less, so if it's only the total the customer paid that's authorized, then how does the full cost of the order get paid?

The amount is calculated off of what DD thinks, not based on what the restaurant charges.

Yes, this causes a significant amount of driver support issues where they have to live chat in because their red card is declining.

The driver is instructed to not give the restaurant receipt to the diner.

Re: Doordash and Pizza Arbitrage

#130

Post by MattGaiser »

ngngngng wrote: post #64

I don't understand why doordash, uber eats, deliveroo, and similar business are starting to exist. Restaurants have been running successful delivery operations independently for ages. And there are many software offerings to help businesses get set up with delivering food. Why do we need a centralized on? Is it just the benefit of being able to browse in one app/website everything available for be delivered to you?

> Restaurants have been running successful delivery operations independently for ages.

Crappy phone call driven ones with few checks for information accuracy.

> Is it just the benefit of being able to browse in one app/website everything available for be delivered to you?

Yes, that is a large part of it. I can be hungry and just pick up the DoorDash app and browse for food. I also have a single point of complaint for any issues with the food, can be confident that DoorDash got my address correct do not need to deal with a credit card at the door, and when I am in a new city, can instantly know what is available.

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