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Doordash and Pizza Arbitrage

themargins.substack.com

341–350 of 534 posts

Re: Doordash and Pizza Arbitrage

#341

I cut this deal with my neighborhood Italian restaurant! I texted the owner about being miffed they hadn’t told me they were on DoorDash. He replied. They aren’t. We compared pricing, and found the prices advertised are way off from what the restaurant charges. So I placed a $5,000 order to the neighbourhood homeless shelter. DoorDash paid him over $20,000, and I get free pasta for the rest of the year. (My neighbour…

How much do you pay for pasta?

5,000$ of pasta would last me and my family until the end of my days.

At ~1-1.2 euros for half a kilo it's around 90 years worth of pasta (based on an average of 28 kilos per person per year in Italy)

Re: Doordash and Pizza Arbitrage

#342
post #287

> Amazon just bailed on restaurant delivery in the U.S. Yeah and Amazon just plugged £500m into Deliveroo in the UK. They are going for UK food delivery market and potentially Europe with that investment. Deliveroo is pretty amazing. 1. I can track my driver in real-time 2. Communicate with drivers via Whatsapp 3. Great range of resturants 4. Super convenient. Order comes usually within 30 minutes

Are they? They were in Munich but then pulled out. Looks like only Lieferando still exists here, as far as I can tell.

https://uk.deliveroo.news/news/amazon-leads-series-g.html

But it seems there has been some issues getting the funding past the CMA – https://www.gov.uk/cma-cases/amazon-deliveroo-merger-inquiry

I believe you're correct. Deliveroo did pull out of Germany.

Re: Doordash and Pizza Arbitrage

#344
post #314

Earlier quoted context omitted.

It gets dicier when the restaurant starts shipping out plain pizza dough.

This made me wonder: what if a restaurant puts a pain dough "pizza" for $30 on their menu? Of course, no one would order it. But in this situation, an aggregator could offer it and the restaurant owner could take advantage of that. It smells like fraud, except that every individual step seems legitimate (albeit weird). I'm pretty sure you're allowed to charge ridiculous prices for common goods if you so choose...

It still requires the aggregator to offer it for less that $30 (at least the cost of dough less). Which, at least in this case, seems to requires a scraping error.

Re: Doordash and Pizza Arbitrage

#345
post #329

Earlier quoted context omitted.

I've always dreamt of having a post of mine read in court. Hi judge!

In this case DD is essentially acting like a ticket scalper. And since DD screwed themselves, is there even a law broken?

No idea, I'm not a lawyer. But in the original post he mentioned that he "cut a deal" with the restaurant, which to me suggests that he got the $5k back, possibly in cash, from the restaurant. If he then pockets to tax he saved, that smells like tax evasion.

He then tweaked his story to say that this cost him $5k. Why did he say he was cutting a deal then?

Re: Doordash and Pizza Arbitrage

#346
> How did we get to a place where billions of dollars are exchanged in millions of business transactions but there are no winners?

“(…) What sphinx of cement and aluminum bashed open their skulls and ate up their brains and imagination?

Moloch! Solitude! Filth! Ugliness! Ashcans and unobtainable dollars! Children screaming under the stairways! Boys sobbing in armies! Old men weeping in the parks! (…)”

https://www.poetryfoundation.org/poems/49303/howl

Re: Doordash and Pizza Arbitrage

#347
post #292

Earlier quoted context omitted.

From what I can gather, it is a ring of people behind this operation likely getting a commission for each 'drop' back at base https://www.google.com/maps/place/101+bowery+st/@40.7176021,...

Told the police about it? Someone would be eager to chase that case.

Cops aren’t ever eager to take on cases.

Re: Doordash and Pizza Arbitrage

#348
post #338

Earlier quoted context omitted.

> The owner made a massive profit and the shelter gets free food and it didn’t cost you anything? We’re in the midst of a pandemic. The restaurant stays afloat, nothing more. The shelter got a donation, and I got promises of comped deliveries and catering. It cost me $5,000; it cost DoorDash over twenty thousand.

This seems very unethical. The fact that you don't like Softbank or DoorDash or the gig-economy or that you're sending pizza to homeless people is irrelevant. The fact is you're exploiting a bug to personally benefit at the expense of investors. Why wouldn't you apply the same principals of ethical hacking, where you would notify the party of the exploit?

It's nog a bug, it's a feature. Doordash uses investment money to evaporate competitors, take over the market and then raise prices for restaurant owners once they gain control. It's a tried and proven concept.

Paying part of the meal is part of that strategy. They know full well that large orders and large amounts of transactions cost them more money and they're betting on nobody actually doing this. They're selling products below the cost of production at this point, something that I would argue should not be allowed in ethical capitalism. Investors know fully well what they're investing in, and of not, they've either not kept their responsibility on reading about the company they're investing in, or the company itself is pulling massive investment fraud.

Play shit games, win shit prices. If they don't want to lose money like this, maybe they should have a business strategy that isn't oriented about purposely losing money to bankrupt competitors. They easily could've set a reasonable limit of say $200 dollars to their cheaper transactions but they chose not to.

Would I go full ethical when finding exploits for an inherently unethical company? Would I dutifully report flaws to companies selling "adult supervision" apps used by controlling spouses? Would I give "bank phishing on demand" websites a 90 day trial period? I don't think so. Making such software is perfectly legal (in many jurisdictions) but is rarely ever ethical. Ethics would need to come from two sides for me to consider responsible disclosure. I have flooded several phishing databases with fake information, got some of them over their resource limit and shut down as well, and I don't feel the smallest bit of regret.

Re: Doordash and Pizza Arbitrage

#349
post #329

Earlier quoted context omitted.

In this case DD is essentially acting like a ticket scalper. And since DD screwed themselves, is there even a law broken?

No idea, I'm not a lawyer. But in the original post he mentioned that he "cut a deal" with the restaurant, which to me suggests that he got the $5k back, possibly in cash, from the restaurant. If he then pockets to tax he saved, that smells like tax evasion. He then tweaked his story to say that this cost him $5k. Why did he say he was cutting a deal then?

I think he’s saying the owner will comp him deliveries. Not pay him back.

Re: Doordash and Pizza Arbitrage

#350
post #329

Earlier quoted context omitted.

In this case DD is essentially acting like a ticket scalper. And since DD screwed themselves, is there even a law broken?

No idea, I'm not a lawyer. But in the original post he mentioned that he "cut a deal" with the restaurant, which to me suggests that he got the $5k back, possibly in cash, from the restaurant. If he then pockets to tax he saved, that smells like tax evasion. He then tweaked his story to say that this cost him $5k. Why did he say he was cutting a deal then?

You make a great point. They also mention they are an options trader on wall street, so $5000 easily could be throwaway money for a double-good cause
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