DoorDash and Societal Arbitrage

Incentive are not aligned anymore.

Example: I order a pizza through Deliveroo. The driver doesn't care about either the restaurant or me, so he chucks the pizza vertically in his box, ruining it. I get a shitty pizza, I won't order anymore from the restaurant.

Compare this with me calling up the restaurant and having one of their employees delivering the pizza: the restaurant has all the incentives for me to enjoy the pizza, since they suffer if they lose me as a client.

And no, it doesn't help using something else as deliveroos: the deliverers are all the same (they use multiple apps) and they don't give a shit about the quality of the service (and rightly so, since they are paid peanuts)

> Try paying a fair price for fair value and taking pleasure in seeing businesses owned by your neighbours thrive. It really is a better way to live than spending your time on earth with your face buried in an app exploiting the poorest.

I think I've seen this vulture capitalism self-cannablize itself in my Lifetime in the US in so many industries its become the norm and I not only expect it I plan for it: things aren't meant to last anymore. Everything is made to be disposable.

Industries and Communities alike are not immune, especially large urban sprawling ones and specifically speaking the tech based ones I've lived in the US where you have large swaths of diasporas coming in waves.

All of which is some how strongly encouraged in order to be a part of the 'disruptive wave' and make your mark for the entrenched players who benefit from this model, that is until you finally get fed up with overpaying for old, cramped and often poorly kept housing situations and you finally decide to return to where you came from in the East Coast, Rust Belt or Midwest where Life seemed more 'normal' only to see that too has been hallowed out and been devastated by substance abuse as a result of large amounts of displaced/under or unemployed workers.

This is now the norm, and while California is in a bad place many people who came to the Valley from outside CA and isolated themselves in its bubble are in for a very sobering realization of what many of their Industries have done now that they have the option to work from home and they return to their home states in most of the US.

I think this is the big take away from the article:

> When a multi-billion dollar tech company takes a hidden audit regulatory exemption, that's on all of us. They're going to keep doing it. Building a business model that relies on a permanent underclass under the doublespeak of "entrepreneurship" and "freedom", and then spending tens of millions to make sure that you will never have to provide health insurance to your workers will always continue on if it's allowed. As a formerly famous person once said, "they let you do it. You can do anything".

I've been in the culinary Industry in the US and in Europe, and sadly I thought prior to COVID the US was finally making significant inroads (outside of California and NY) to Asian and European standards of culinary culture, wherein a restaurant and restaurateur is a proud beacon of a vibrant community. A hub for locals to gather and enjoy each others company and patronage alike in a mutual beneficial manner that helps embody and nourish itself.

Instead, what has happened is that these low margin businesses that struggled to make payroll and keep the lights on unless they had outside investment(s)/investors are bending at the seams and the rest just gave way to the weight of well funded commercial chains and what I'm now convinced will be the re-structuring to make the Ghost Kitchen Model the new de-facto way most people get their meals when 'going out.'

As a former chef, biodynamic farmer and proponent of farm to table business models as way of making environmentalism viable (read: profitable) I felt we were robbed of many more years (possibly decades) of experimentation and progress, but the truth is that the model was always joined at the hip to a very precarious, exploitative and quite frankly unsustainable Industry: restaurants/hospitality.

I'm still close with my old Team and have many friends with (struggling) restaurants and while they were all apprehensive of the disruption they understood why I welcomed it and how it would be indifferent to their acceptance either way. And to me Doordash is just the 21st embodiment of the same model, the advent being logistics and supply chain management are sold as a SaaS business model via a horrible/buggy app and system, wherein its ok to lose millions.billions so long as you have access to untapped labor in an ever growing underclass that can attract another round from a VC like Softbank flush with cheap/hot money that seems almost eager to lose money so long as you structure it correctly to keep the illusion of infinite growth via multi-billion IPOs going.

I'm glad to have had the opportunity to step away from Fintech for a period and got to work and live through what now seems like an unrepeatable period in the culinary Industry that spanned everything from Michelin star, James Beard awarded restaurants as well as my primary focus in agro-tourisms and farm to table models. I think it is an end of an era as more restaurants are forced to close their doors forever and are giving way to a handful of well financed players with access to immense amount of Capital in a race to the bottom to capture ever thinner margins and displacing anything that poses a threat.

The model that Roy Choi created after the 2008 financial crisis, that disrupted the culinary World with the advent of marketing via social media and food truck distribution in lieu of brick and mortars, may be the only viable model that the most well funded and equally daring cooks/chefs will have to aspire to moving forward if they have any chance of being independent.

I can only hope that they too learn the lessons from Roy, and his imperative to be involved in locally based community investment as a measure of their success instead of what are now at best gilded awards like Michelin stars and James Beard awards now that so much of the competition has been unfairly removed from the equation due to COVID.

> With no more MFC clauses, retailers can charge a flat out %3 tax to all credit card users and pass the fee down properly to incentivize them to not use credit cards.

The alternative to this would be to go the European way and cap the fees themselves - 0.2% for debit cards, 0.3% for credit cards.

As a result, we don't have these "cashback" programs that incentivize customers to go into debt and pay interest upon purchases, and cash-paying consumers don't end up subsidizing the CC reward schemes.

58 percent (closer to 59 percent in fact) can only be described as a blowout. Maybe if they spent less it would simply have been closer.

Meg Whitman spent something like $180M for the governor's race, and still lost badly. You can't sell voters something they don't want to buy.

> Maybe some of it's unsustainable, sure. But why should the restaurant care?

Many restaurants are small independent businesses having business owners taking a lot of financial risk and investing a ton of time to grow that business. They aren't interested in becoming de facto subsidiaries to delivery services. They want to serve their patrons directly while making a living in a sustainable way.

> Maybe. This has supposedly been the business model, but has anyone actually managed to execute on it?

Isn't this how Amazon entered and acquired the book market, by positioning themselves as a book broker at first and then gradually outbidding book stores?

> because I still like them and am still willing to pay a premium for them.

One swallow doesn't make a summer.

> It's always had a reputation as a minimum-wage (or even below-minimum-wage) job, no?

Agreed. Is it to the benefit of society at large if an existing socio-economic circumstances turn more precarious for an increasing group of people?

> Sounds like a self-correcting problem - as and when quality and diversity drop, an opportunity rises for anyone who can offer them.

Isn't that contradictory if the opportunity doesn't exist... because the expenses associated with investing in quality outstrip your competitive advantage with other low-cost competitors?

Sure, you could aim at a high-end niche of customers - e.g. four star restaurants - but those are small and the competition is murderous. That's why there's, comparatively, only a handful of Michelin star restaurants with chefs with a reputation.

Granted, everyone needs to eat. It's a vast market after all. I just do not see how this particular business model applied in the delivery business is a net positive for everyone involved in the long run... except for DoorDash and their ilk.