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DoorDash Buying Caviar from Square for $410M

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Re: DoorDash Buying Caviar from Square for $410M

#141

Post by bardworx »

MegaButts wrote: post #26
loceng wrote: post #22

Earlier quoted context omitted.

They make a lot of profit, recycling it buy up and coming startups to maintain market share and the business model.

> They make a lot of profit I have always heard food delivery as a business is a great way to lose money. Do you have any examples of companies doing it profitably?

Unit economics on food delivery sucks (if that’s your only business)...too many inefficiencies with travel to/from (time wasted w/empty hands).

Food delivery as part of a QSR can be profitable but most businesses don’t track margins efficiently enough to know the difference.

Re: DoorDash Buying Caviar from Square for $410M

#142

Post by mytailorisrich »

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…

> Ghost kitchens are mostly scams.

They are not. They are just a different model than a standard restaurant.

What I have observed in my area (UK) is that instead of expanding by setting up a new branch in the costly centre of town, some chains work with Deliveroo to open a ghost kitchen in the industrial area.

That allows them to expand to a new town while saving on capex.

Re: DoorDash Buying Caviar from Square for $410M

#144

Post by nvr219 »

maksimum wrote: post #133
lancesells wrote: post #121

Earlier quoted context omitted.

I just did the same with Amazon since they have the same tip practices as DoorDash. That and reading about the Ring Alarm system being sold by law enforcement it just put me over the edge. Can I avoid AWS? No, but I can certainly not spend my own money directly on any of their services.

Have you been tipping on your AWS bill? Or the package delivery workers? (What does Amazon have to do with this?)

I'm an aws dev, if you like route 53 please check out my pateron link thanks for your support ;-)

Re: DoorDash Buying Caviar from Square for $410M

#145

Post by sokoloff »

wpietri wrote: post #134
arcticfox wrote: post #128

Earlier quoted context omitted.

Dismissing things in 2019 by referencing that they were tried in the dotcom bubble ... Two decades ago ... Is not a very powerful argument

Are you suggesting that something changed to make this different? If so, what?

Smart phones (the associated app ecosystem, constant IP connectivity, GPS, and stored payment methods) and better computer mapping/route planning systems being ubiquitous.

I remember around 2000 in order to order ice cream for delivery having to call Kozmo (or maybe it was Webvan) on a voice phone and talk to a person like some kind of savage.

It seems like the smartphone and good map data could transform something that was terribly inefficient 20 years ago into something that's efficient enough to be profitable now.

Re: DoorDash Buying Caviar from Square for $410M

#146

Post by notyourday »

bardworx wrote: post #140
notyourday wrote: post #71

Earlier quoted context omitted.

> 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…

Ghost kitchens may be scams but I know at least of one QSR in Manhattan that does them successfully. In some instances they are quite profitable if you generate the volume. Your commission is also a bit off, perhaps you speak from full service experience? While true that base comm is 20-30, those numbers are always negotiated down. Grub/Seamless will take as low as 12 from high vol regional leaders while UberEats mad…

> Ghost kitchens may be scams but I know at least of one QSR in Manhattan that does them successfully. In some instances they are quite profitable if you generate the volume.

It is a temporary fluke. If Chinese take out operators that are able to do razor thin margins and nearly completely unpaid labor force cannot make them work then no one can make them work

> While true that base comm is 20-30, those numbers are always negotiated down. Grub/Seamless will take as low as 12 from high vol regional leaders while UberEats made some deals that are supposedly really low (McDonalds). I don’t have exact numbers but from my recollection they mentioned it in their S1.

It is a creative lie by omission. Same kind of lie that Grubhub had when it forgot about the $$ it charged restaurants for answering phones that Grubhub setup.

There are maybe a dozen chains (McDonalds/Burger King/Chipotle/Qdoba/Subway/White Castle, etc) that can negotiate $1 fee. Your pizza place, your taco place, your take out sushi joint don't have this ability. If they did then the VCs would not fund DoorDash or GrubHub.

> While Danny Myers is quite smart, USH isn’t a barometer for the entire industry as his focus is more on full service.

Have you heard of Shake Shack?

Re: DoorDash Buying Caviar from Square for $410M

#147

Post by notyourday »

mytailorisrich wrote: post #142
notyourday wrote: post #71

Earlier quoted context omitted.

> 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…

> Ghost kitchens are mostly scams. They are not. They are just a different model than a standard restaurant. What I have observed in my area (UK) is that instead of expanding by setting up a new branch in the costly centre of town, some chains work with Deliveroo to open a ghost kitchen in the industrial area. That allows them to expand to a new town while saving on capex.

> They are not. They are just a different model than a standard restaurant.

They are not. It is called commissary kitchen. Has been around forever. Those are the kitchens that support food trucks. Or the kitchens that support prepared food not made on premises in supermarkets. They don't work for a-la minute production even if a-la minute is just used to load it into driver's gear.

> What I have observed in my area (UK) is that instead of expanding by setting up a new branch in the costly centre of town, some chains work with Deliveroo to open a ghost kitchen in the industrial area

That simply means real estate has not adjusted to it. It will.

Re: DoorDash Buying Caviar from Square for $410M

#148

Post by notyourday »

arcticfox wrote: post #128
notyourday wrote: post #71

Earlier quoted context omitted.

> 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…

Dismissing things in 2019 by referencing that they were tried in the dotcom bubble ... Two decades ago ... Is not a very powerful argument

> Dismissing things in 2019 by referencing that they were tried in the dotcom bubble ... Two decades ago ... Is not a very powerful argument

Cost structure has not changed in restaurants that do take outs.

Delivery services in the areas where they ( delivery services ) could be popular and are popular solve a non-existent problem for restaurants ( delivery ) by eating into restaurant's profit margins. Not only that, by longer-term delivery services are terrible for restaurants because suddenly every restaurant in 1-2 mile radius even in the most high density city becomes a competitor while the margin is lower.

Re: DoorDash Buying Caviar from Square for $410M

#149

Post by JustSomeNobody »

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.

Unless you’re Papa Johns and you tack on a delivery fee that doesn’t go to the driver.

Re: DoorDash Buying Caviar from Square for $410M

#150

Post by pwinnski »

minimaxir wrote: post #3
pwinnski wrote: post #2

I wonder whether the timing of this is related to DoorDash finally backing down on handling of tips.

It takes longer than a month to finalize a $410M acquisition.

The other way around: if you're in the final stages of finalizing an acquisition, you might not want even a whiff of controversy tied to your company.
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