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DoorDash and Societal Arbitrage

themargins.substack.com

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Re: DoorDash and Societal Arbitrage

#61

Post by eru »

Melting_Harps wrote: post #52
eru wrote: post #41

Earlier quoted context omitted.

Note that the author of the piece has quite a big axe to grind.

> Note that the author of the piece has quite a big axe to grind. His perceived lack of objectivity doesn't mean he's wrong, and as a person who has been in the Industry and has many friends who own kitchens that have had to deal with their toxic relationship to make payroll his opinions resonate with my own.

Sorry, in this case I didn't mean specifically to comment on kitchens.

Just for the 'axe to grind', compare the comment on Prop 22 by Mr Slate Star Codex at https://www.reddit.com/r/slatestarcodex/comments/j9kxl0/my_c... with the article submitted here.

(I'm linking to a note by Scott Alexander, because he's generally seen as a level headed person. More than anything I could write.)

Re: DoorDash and Societal Arbitrage

#62

Post by [deleted] »

techsupporter wrote: post #12

> I’m going to end this by noting as I read through the S-1, you can’t help but develop a grudging respect for Tony Xu and his team. It’s the ultimate encapsulation of don’t hate the player, hate the game . To use a meme, "por que no los dos?" I hate both the player and the game. No one ordered Mr Xu to get into this business; there's no requirement that he abuse the living shit out of his workers and sell them up th…

[deleted]

Re: DoorDash and Societal Arbitrage

#63

Post by Dirlewanger »

cmeacham98 wrote: post #25
remote_phone wrote: post #18

Earlier quoted context omitted.

Prop 22 was not the way to do it. I’m glad that terrible law was correctly voted down by California. It is clear that people want flexibility. The fact that Prop 22 had to have over 100 exclusions because it broke so many other industries reeks of bad code smell. It was a badly written law and badly written laws need to be reversed. In the end, drivers got better protections and guarantees but remained flexible and i…

Maybe you're not aware, but prop 22 actually passed and helps gig economy companies like DoorDash .

And a majority of gig workers also were in favor of it.

Re: DoorDash and Societal Arbitrage

#64

Post by swiley »

Heliosmaster wrote: post #42
lacker wrote: post #9

To me, this is the key claim of the article: This is not a genuine partnership, it’s extractive. Is DoorDash extracting money from its users, the restaurants and the delivery drivers? Or is it actually providing something of value? To me, the delivery apps like DoorDash and Uber Eats just work a lot better than calling up restaurants for delivery did in the pre-app era. Maybe the drivers are underpaid, maybe the rest…

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 th…

I have never had a delivery driver do anything like that.

Re: DoorDash and Societal Arbitrage

#66

Post by tartoran »

TeMPOraL wrote: post #54
fxtentacle wrote: post #51

"We know restaurant ‘partners’ are a flight risk because this is not a genuine partnership, it’s extractive." In my area, there's a pizza shop that is doing well. They also sell on Takeaway.com. But if you order through that - like I initially did - they'll give you a small business card that says "Did you know that our prices on Takeaway.com are 15% higher to compensate for the fees that they charge us?" And on the…

Clever, but how long until Takeaway.com and others add a clause in their contract against putting such business cards in their order? These companies have power over restaurants, because they can ruin a restaurant's reputation until it yields and accepts the new contract.

How long until some actor emerges who provides a network of ordering sites hosted on the cloud that charge $30-50 a month for each restaurant and nothing more? As margins get thinner and thinner this is inevitable. And no marketing needed, if the service is good word of mouth would do it.

Re: DoorDash and Societal Arbitrage

#67

Post by randrews543 »

A big ? for DoorDash is how big can they really be as a company. Too many people are making a big deal about their profitability as a whole. But if you look at customers at a cohort level once customers get to years 2,3,4 they are actually profitable. The big question is what is the average lifespan of a customer for them, do they make it to years 2,3,4, how far in do they make it and at scale how much profit can they expect to make from each customer that does last that long. Then when that is all said and one what size company are we lookin at? $1B in annual revenue?, $10B?, $100B? That will determine the viability of DoorDash and its size as a public company.

Re: DoorDash and Societal Arbitrage

#68

Post by xenihn »

techsupporter wrote: post #12

> I’m going to end this by noting as I read through the S-1, you can’t help but develop a grudging respect for Tony Xu and his team. It’s the ultimate encapsulation of don’t hate the player, hate the game . To use a meme, "por que no los dos?" I hate both the player and the game. No one ordered Mr Xu to get into this business; there's no requirement that he abuse the living shit out of his workers and sell them up th…

>And now, with COVID, we're watching our economy cleave into the starkest case of haves and have-nots in my lifetime.

I am really sad about this. It's going to be a literal depression for a significant portion of American society.

Re: DoorDash and Societal Arbitrage

#69

Post by bwilliams18 »

randrews543 wrote: post #67

A big ? for DoorDash is how big can they really be as a company. Too many people are making a big deal about their profitability as a whole. But if you look at customers at a cohort level once customers get to years 2,3,4 they are actually profitable. The big question is what is the average lifespan of a customer for them, do they make it to years 2,3,4, how far in do they make it and at scale how much profit can the…

The cohorts are similarly profitable when they get to 2020, the year when there was a massive pandemic that forced everyone to order in all of the time.

Re: DoorDash and Societal Arbitrage

#70

Post by thrav »

Heliosmaster wrote: post #42
lacker wrote: post #9

To me, this is the key claim of the article: This is not a genuine partnership, it’s extractive. Is DoorDash extracting money from its users, the restaurants and the delivery drivers? Or is it actually providing something of value? To me, the delivery apps like DoorDash and Uber Eats just work a lot better than calling up restaurants for delivery did in the pre-app era. Maybe the drivers are underpaid, maybe the rest…

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 th…

If a delivery driver gets a series of 1-star reviews, you can bet they’re getting kicked off the platform.

+ DoorDash actually does refund quite frequently for food issues.

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