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Five companies now control over 90% of the restaurant food delivery market

marketsaintefficient.substack.com

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Re: Five companies now control over 90% of the restaurant food delivery market

#31

Post by to11mtm »

daedrdev wrote: post #23

I think the truth is restaurant food delivery is a luxgury good, literally “private taxi for your burrito” yet many people spend like it isnt.

Restaurant delivery... I tend to agree.

'nonperishable food' or 'properly packed short travel' (i.e. dairy/frozen) IMO is a fairer niche of 'could be non-luxury with better societal outcomes', except for the 'as close to JIT as possible'. There's ways to optimize the process to where something on the scale of 10-20 homes could get their main groceries delivered two or 3 times a week and the overall cost would be lower than all of them doing so. Yeah you'd need a reefer van or an otherwise replenishable source of cold for dairy/frozen but at that scale the cost of such makes a lot more sense. Biggest problem is getting the right buy-in and mindset from consumers.

Re: Five companies now control over 90% of the restaurant food delivery market

#32

Post by redleader55 »

esco27 wrote: post #28

The food industry is due for a good old opensource disruption, where each restaurant can setup their private menu hub (like you would an instagram account), add their payment processing details, and start delivering their own orders. It's a win-win for the restaurant and their recurring customers.

What about users? Will they install one app for each restaurant they order from on their phone or will they prefer to do everything in the same app?

Re: Five companies now control over 90% of the restaurant food delivery market

#34

Post by Reason077 »

esco27 wrote: post #28

The food industry is due for a good old opensource disruption, where each restaurant can setup their private menu hub (like you would an instagram account), add their payment processing details, and start delivering their own orders. It's a win-win for the restaurant and their recurring customers.

These certainly exist. My local favourite Thai restaurant has its own ordering website and has its own staff deliver the order, with no markup over the in-restaurant menu prices.

The company that operates their ordering platform is mobihq.com (I have no affiliation with them)

Re: Five companies now control over 90% of the restaurant food delivery market

#35

Post by koakuma-chan »

hn_throwaway_99 wrote: post #11

This is essentially the story of tech companies across nearly every industry where they have come to dominate. This is one reason that I see most tech companies as essentially a net negative for society at large, as the goal is nearly always to control a large monopoly (and this is fully admitted by many tech leaders, e.g. Thiel) which the Internet makes possible. Pre-Internet you would see the same dynamics, but usu…

And why is a large monopoly a net negative? I read his book and he says that monopolies are 10x better products, and if monopolies are 10x better then why are they bad? Are you arguing that it would be better to keep using 10x worse products, for the sake of there not being any monopolies?

Re: Five companies now control over 90% of the restaurant food delivery market

#36

Post by to11mtm »

asdff wrote: post #29
tpmoney wrote: post #21

Earlier quoted context omitted.

Realistically in the US before the various online delivery companies figured out how to make it work, most places just didn't do delivery at all. Traditionally pizza places and Chinese food were something you could order delivered. Almost everything else was either drive through or take-out.

What is sort of crazy is that these delivery services didn't even supplant pizza delivery. All the major chain pizza delivery places and most of the local spots all still run their own delivery service long into this app era. It kind of makes sense. App delivery is notorious for being pretty terrible service quality and having the food end up worse with more time spent between kitchen and you eating it. Pizza deliver…

> App delivery is notorious for being pretty terrible service quality and having the food end up worse with more time spent between kitchen and you eating it. Pizza delivery on the other hand has been seen as quick with drivers interested in earning their tip, pizza places being conservative with delivery radius to not overextend their drivers, etc. Customers don't like getting an inferior product or service one day.

Additionally, at least in my experience it's pretty easy to get to where just paying the delivery fee of a pizza place is cheaper than paying for inflated per-item rates.

Re: Five companies now control over 90% of the restaurant food delivery market

#37

Post by NaOH »

to11mtm wrote: post #26
andybak wrote: post #13

I still tend to discover a takeaway or restaurant and then figure out how to get them to deliver. I've never not ordered from somewhere I was keen on based on their choice of delivery service. If the consolidation results in price hikes and poor service, what's the lock-in? Why can't the takeaways just go rogue and offer independent deliveries?

> Why can't the takeaways just go rogue and offer independent deliveries? Because many of these delivery 'ad-hoc contractors'[0], sometimes even eating cost [1]. Pre-covid, you were often best off as a business either doing something that was 'known' to be delivery offered (i.e. pizza) or your next best option was to aggressively advertise it and have an extra staffer on hand willing to do the deed. Then, you've also…

Regarding your link to the article on pizza arbitrage,

DoorDash and Pizza Arbitrage (2020) - https://news.ycombinator.com/item?id=40806356 - June 2024 (147 comments)

DoorDash and pizza arbitrage (2020) - https://news.ycombinator.com/item?id=32086170 - July 2022 (230 comments)

Doordash and Pizza Arbitrage - https://news.ycombinator.com/item?id=23216852 - May 2020 (518 comments)

Re: Five companies now control over 90% of the restaurant food delivery market

#38

Post by faizshah »

Meanwhile I have seen a lot of local restaurants advertising how ordering through their own delivery/pickup service can be 30% less than Uber Eats or DoorDash on their takeout boxes (and consequently in your uber/doordash order). It’s interesting that some of the POS companies are getting into the market: https://www.toasttab.com/local

There’s huge room for disruption in this model when a $12 chipotle order costs the consumer $30 after higher menu prices + delivery fees + tip.

Re: Five companies now control over 90% of the restaurant food delivery market

#39

Post by TheMagicHorsey »

I know these are three sided marketplaces and difficult to coordinate demand and supply ... but why isn't there more locally hosted town and city level options that undercut the national/international conglomerates? Food delivery is ultimately a local thing.

Re: Five companies now control over 90% of the restaurant food delivery market

#40

Post by nickjj »

redleader55 wrote: post #32
esco27 wrote: post #28

The food industry is due for a good old opensource disruption, where each restaurant can setup their private menu hub (like you would an instagram account), add their payment processing details, and start delivering their own orders. It's a win-win for the restaurant and their recurring customers.

What about users? Will they install one app for each restaurant they order from on their phone or will they prefer to do everything in the same app?

There are middle man services for certain types of food in certain areas.

For example Slice is a popular one for pizza. I know a business owner who uses it.

They have an app and optionally an online menu on your custom domain to take online orders and physical hardware for taking orders in your store. Think POS system, register, terminal, printers, etc..

For a business owner that covers you for accepting online and offline orders, and you can deliver direct to your customers.

95% of his online delivery orders go through this system because DoorDash charges him (the business owner) 30% for each order so he raised his prices there to partially offset that. Slice on the other hand is 5% cheaper than his baseline price for online orders for customers so it's a no brainer most use that. With that said, way more people call in or come in person than using the app. Probably a 90% / 10% split.

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