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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

#61

Post by b112 »

asdf6969 wrote: post #59
b112 wrote: post #27

Earlier quoted context omitted.

And yet, why do you need software? In the 80s, I delivered pizza with no software. The place had a normal cash register, for pickups. People would call, order, and we'd write it down. They it'd go on a wire with a clothes pin, until made. Then it went with the driver. Each delivery was written down before leaving with it. This worked for decades for everyone in the industry, flawlessly, perfectly, without issue. Why…

Everyone hates calling and apps give customers a list of restaurants with menus to browse. Restaurants also do all of their in-restaurant management with software (why not paper? ask them idk) which I assume has some integration with the app. I can imagine some type of open protocol that lets them self-host an order service though, or at least an open solution that’s hosted by many providers and many separate apps. T…

Maybe we should all make the world a better place, suck it up, and just call?

Maybe making the world a better place, means human interaction and less automation.

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

#62

Post by Workaccount2 »

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.

Worked years ago at a restaurant that had its own website and app ordering...

Ubereats and the like still dominated the orders even with the 15% upcharge and even after notifying repeat customers that they can save money ordering direct

The convenience of having one centralized app with one account that can summon any food from any restaurant in a 10 mile area is just way too strong.

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

#63

Post by Aurornis »

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.

Seeing how many Gen Z people use food delivery services on a weekly or even daily basis was mind blowing to me. I’ve had numerous conversations where I’ve had to bite my tongue when younger colleagues complained about finances after also explaining that they DoorDash dinner nearly every night. It’s bizarre.

Not all Gen Z, of course. Most of the younger people I’ve worked with have been generally smart about finances. It’s a subset who fall into the normalization of luxury services as a standard cost.

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

#64

Post by v5v3 »

My understanding is that the drivers are non-exclusive and can work for multiple companies at the same time.

So as their is a ready supply of drivers, anyone who can raise an amount of money, and find a niche can enter the fray?

The suppliers (restaurants) are not happy with 30% or so being taken by the giants.

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

#65

Post by kurofune »

Is this surprising?

This is what our actual economic system is all about: a series of market oligopolies whose greed is unchecked by our political establishment and legal apparatus with the complicity of the voting masses. Any attempt to implement measures to palliate the social decay and corruption it breeds will be branded as chinese communism and opposed by the media and the public.

We have collectively decided that the economy shouldn't be in service of the people, canis canem edit.

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

#66

Post by Aurornis »

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.

The target audience for consolidated food delivery apps isn’t the person who wants to manage the fine details of ordering from 10-20 different local restaurants.

The majority of people using these apps just want to scroll some restaurants and order something quickly. Saving 10% by going through extra steps, installing extra apps, going to a company’s website, and doing custom orders isn’t what most of their repeat customers want to do.

It’s a convenience thing.

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

#67

Post by A1kmm »

cjbgkagh wrote: post #57
nomadygnt wrote: post #45

Earlier quoted context omitted.

Monopolies are anti-competitive. Without competition there is no incentive for innovation, lowering prices, not price-gouging etc. Is a 10x better product really 10x better if it is also 10x more expensive and there is no alternative?

Not innovating, maintaining high prices, and price-gouging are unstable activities for a monopoly, as in it would open up a void for effective competition. The real anti-competitive actions is that it becomes cost effective to do regulatory capture / pay bribes to politicians. A monopoly can pay to play in a way that fledging competitors cannot. Once the industry has been captured then they can do rent seeking behavi…

If allowed, an incumbent monopoly will do the minimum innovation or tactical pricing necessary to keep out competitors - even if it means they suffer a temporary loss.

This can effectively create a barrier to entry high enough that no small company has a chance to beat them. Since insolvency before overcoming the barrier is foreseeable, no one even tries, and the monopoly gets to keep high prices (compared to a competitive market if they weren't there).

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

#68

Post by Workaccount2 »

faizshah wrote: post #38

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…

When I worked at a restaurant that did Ubereats/door dash/GrubHub, we had a 15% upcharge on order through those platforms.

We would tell repeat customers they could use our website/app/phone to order directly and save the 15%. Almost no one converted. Convenience really is king.

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

#69

Post by toast0 »

TeaBrain wrote: post #25
morsch wrote: post #19

Earlier quoted context omitted.

I don't understand, are you saying the market was so small that it might as well not have existed? I don't have the impression that it's gotten magnitudes bigger here in Germany, maybe in China it did (what hasn't), in the US...? People just use the web instead of using a phone. AT&T didn't charge a commission.

>are you saying the market was so small that it might as well not have existed? They're saying that the space these companies are competing in literally did not exist. It didn't in the US, maybe not 15 years ago, but 20 years ago it was nonexistent.

Waiters on Wheels was founded in 1987 and had cornered the market. But they really only did large orders as far as I'm aware; used more for a corporate lunch than a dinner for two at home.

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

#70

Post by notatoad »

b112 wrote: post #27
spacephysics wrote: post #16

Earlier quoted context omitted.

Lots of their infrastructure for handling orders (iPads, software integration into their payment system) was done around Covid, and some have started to integrate in-person orders through the same “single unified system” creating a higher and higher cost to switch delivery systems. AFAIK there’s no well-supported open source order/delivery management software. The companies that were ready during covid took all the e…

And yet, why do you need software? In the 80s, I delivered pizza with no software. The place had a normal cash register, for pickups. People would call, order, and we'd write it down. They it'd go on a wire with a clothes pin, until made. Then it went with the driver. Each delivery was written down before leaving with it. This worked for decades for everyone in the industry, flawlessly, perfectly, without issue. Why…

as long as you've got enough order volume to keep a delivery driver consistently busy, that works fine and the apps are unnecessary. for a pizza restaurant, or anybody else focused on delivery orders, the apps aren't necessary

the utility of the apps is to distribute the load from multiple restaurants across a shared pool of delivery drivers, so a restaurant who otherwise wouldn't be able to offer delivery can tap into that labour pool for infrequent delivery orders. food delivery apps have greatly expanded the number of places that offer delivery. most restaurants simply didn't offer it before the apps.

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