DoorDash Buying Caviar from Square for $410M • Hacker News Board

Re: DoorDash Buying Caviar from Square for $410M

#41

Post by pkaye » Thu, Aug 01, 2019, 9:43 PM UTC

mylons wrote: post #24

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.

food delivery service is blowing up because it's still extremely inefficient in the USA. you can get _anything_ delivered in Hong Kong for about $1. some hong kongers don't even have kitchens and live like that for years. travis kalanick is investing millions of his own cash into this space.

The fact that Hong Kong is one of the most densely populated areas of the world does help in this regard.

Re: DoorDash Buying Caviar from Square for $410M

#42

Post by umeshunni » Thu, Aug 01, 2019, 9:49 PM UTC

goerz wrote: post #23

conwaytwitty wrote: post #11

Was super confused for a while thinking this was about actual caviar...

Me too! $410M worth of caviar sounded like a lot of caviar!

A quick online search seems to show that 1g of caviar costs $7-$10 (presumably in bulk, not retail).

$410M is about 60 metric tonnes of caviar.

Still a better deal than buying a tier-3 food delivery company.

Re: DoorDash Buying Caviar from Square for $410M

#43

Post by pgrote » Thu, Aug 01, 2019, 9:50 PM UTC

Perhaps keeping it separate is a good thing technically.

DoorDash app and website are a dumpster fire with usability and bugs galore.

The issue is as a user is if you bring this up to DoorDash support they have no internal process for handling reported issues with the app and website and letting the development team know.

Re: DoorDash Buying Caviar from Square for $410M

#44

Post by bduerst » Thu, Aug 01, 2019, 9:51 PM UTC

AmericanChopper wrote: post #36

MegaButts wrote: post #26

Earlier quoted context omitted.

> 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?

Different market, but Gojek does it profitably. They do delivery, ride hailing, and a bunch of other stuff, and all of their segments are profitable, except ride hailing. They also have a slightly different model, which might not work in other markets. They don’t need to onboard merchants in the same way, because with them the driver pays for the order, and then the customer pays the driver, either in-app or with cas…

Interesting business model, but Jakarta is insanely dense (largest city in APAC) which is probably why its more profitable. In the U.S. you have urban sprawl and suburbs, which increase variable costs of delivery.

Re: DoorDash Buying Caviar from Square for $410M

#45

Post by wufufufu » Thu, Aug 01, 2019, 9:54 PM UTC

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

Re: DoorDash Buying Caviar from Square for $410M

#46

Post by wufufufu » Thu, Aug 01, 2019, 9:55 PM UTC

mikeryan wrote: post #6

joemaller1 wrote: post #5

This seems like a smart move and a good thing for both parties, but Square’s trading lower on the news?

Yeah a bit strange. They’re making about 300M on the transaction and it was never that clean a fit.

How much do you think Square invested into Caviar, though?

Re: DoorDash Buying Caviar from Square for $410M

#47

Post by AmericanChopper » Thu, Aug 01, 2019, 9:57 PM UTC

bduerst wrote: post #44

AmericanChopper wrote: post #36

Earlier quoted context omitted.

Different market, but Gojek does it profitably. They do delivery, ride hailing, and a bunch of other stuff, and all of their segments are profitable, except ride hailing. They also have a slightly different model, which might not work in other markets. They don’t need to onboard merchants in the same way, because with them the driver pays for the order, and then the customer pays the driver, either in-app or with cas…

Interesting business model, but Jakarta is insanely dense (largest city in APAC) which is probably why its more profitable. In the U.S. you have urban sprawl and suburbs, which increase variable costs of delivery.

Jakarta has ridiculous urban sprawl, has worse traffic than any city in the US, and floods for months in the year. I lived there for years, it’s much harder to get around than LA or NY.

Re: DoorDash Buying Caviar from Square for $410M

#48

Post by bduerst » Thu, Aug 01, 2019, 9:58 PM UTC

AmericanChopper wrote: post #47

bduerst wrote: post #44

Earlier quoted context omitted.

Interesting business model, but Jakarta is insanely dense (largest city in APAC) which is probably why its more profitable. In the U.S. you have urban sprawl and suburbs, which increase variable costs of delivery.

Jakarta has ridiculous urban sprawl, has worse traffic than any city in the US, and floods for months in the year. I lived there for years, it’s much harder to get around than LA or NY.

That probably explains why their model has the driver taking on the liability then.

Re: DoorDash Buying Caviar from Square for $410M

#49

Post by swampthinker » Thu, Aug 01, 2019, 10:01 PM UTC

BinaryIdiot wrote: post #18

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.

It's funny, I know almost no two people with similar experiences (user or courier). For example as a user I have literally never had a good experience with Caviar. It almost always wrong in different ways. As a courier one time the guy called and said that the restaurant was taking so long that Caviar would no longer pay him to wait so we ended up paying him out of pocket to cover it (he said we could cancel and get…

I was a Caviar courier in a past life, it paid very well for someone with just a bike ($20-$25/hr before taxes).

That courier was full of shit. You get paid regardless of customer status, and you also get paid per minute over a certain delay threshold. Sounds like you just got a bad actor.

Re: DoorDash Buying Caviar from Square for $410M

#50

Post by [deleted] » Thu, Aug 01, 2019, 10:02 PM UTC

dheera wrote: post #35

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.

It's probably a mostly equity deal, i.e. most of the $410M is not real money. They recently raised $600M and I doubt they'd spend $410M of that on an acquisition. It would be more interesting if we knew how much they actually paid in hard cash; the rest is effectively just promises of money in the form of a valuation that hasn't materialized in liquid form yet.

[deleted]