We both agreed, fuck Doordash.
May 17, 2020 8:29 PM   Subscribe

“If someone could pay Doordash $16 a pizza, and Doordash would pay his restaurant $24 a pizza, then he should clearly just order pizzas himself via Doordash, all day long.” A restaurateur and his friend discover that the Doordash delivery app is willing to lose venture capitalists’ money if they can expand their middleman business. Doordash previously and previously.
posted by Monochrome (119 comments total) 54 users marked this as a favorite
 
Wasn't this literally a plot in HBO's Silicon Valley?
posted by gwint at 8:40 PM on May 17 [13 favorites]


Seriously though, fuck Doordash.
posted by dazed_one at 9:10 PM on May 17 [25 favorites]


I delivered for postmates last summer out of economic necessity. I averaged about $9 an hour BEFORE expenses. In a state where minimum wage was $11 at the time. Fuck the gig economy.
posted by nestor_makhno at 9:16 PM on May 17 [79 favorites]


You have insanely large pools of capital creating an incredibly inefficient money-losing business model. It's used to subsidize an untenable customer expectation. You leverage a broken workforce to minimize your genuine labor expenses. The companies unload their capital cannons on customer acquisition, while this week’s Uber-Grubhub news reminds us, the only viable endgame is a promise of monopoly concentration and increased prices. But is that even viable?

Here's one look at how that played out in a market smaller than that of the U.S. for one such market player...

Foodora said it was bailing out of Canada in mid-May.

Uncoincidentally, it's emerged that they owe more than $4.7 million to restaurants and creditors across Canada.

It's safe to say that the "burn cash to to acquire customers" strategy ran out the clock too early, and just as the pandemic hit. Then, to boot, they were faced with the prospect of having *gasp* to treat their workers like something close to people who are legally employees. "Dependent contractors" is where this Ontario Labour Relations Board decision landed on their status:

171. The Board has carefully reviewed the evidence called by the parties using the factors historically considered by the Board from Algonquin Tavern, supra in the interpretation of the statutory definition of dependent contractor. The couriers are selected by Foodora and required to deliver food on the terms and conditions determined by Foodora in accordance with Foodora’s standards. In a very real sense, the couriers work for Foodora, and not themselves.

172. This is the Board’s first decision with respect to workers in what has been described by the parties and the media as “the gig economy”. However, the services performed by Foodora couriers are nothing new to the Board and in many ways are similar to the circumstances of the Board’s older cases. This is not the Board’s first case examining the relationship of couriers. The Board has been tasked with the same questions about dependent contractors in various sectors including transportation and construction. Such cases have always been fact-based inquiries that require a balancing of factors. This case is no different in many respects.

173. For the foregoing reasons, the Board finds that Foodora couriers are dependent contractors and must be treated as such under the Act. As the evidence bears out, couriers more closely resemble employees than independent contractors.


What happens when the "disruptors" are disrupted?

The grift economy collapses.
posted by mandolin conspiracy at 9:31 PM on May 17 [68 favorites]


Uncoincidentally, it's emerged that they owe more than $4.7 million to restaurants and creditors across Canada.

Dinedash
posted by figurant at 9:37 PM on May 17 [97 favorites]


Let' hope so. On my weekly grocery shopping day, I now notice the gig shoppers, that I never saw before. While most are now wearing masks, they are going so fast, their social distancing seems to be lacking.
posted by Windopaene at 9:49 PM on May 17 [11 favorites]


Speaking of gig shoppers: does anyone understand why *this* is how grocery delivery gets done? Is the problem of building an efficient internal picking operation plus contracting with a delivery service so complex or otherwise taxing enough that it's just easier to pay a third party a fee to take the problem off their hands in as inefficient a manner as assigning one gig worker for each order start to finish?
posted by wildblueyonder at 10:44 PM on May 17 [12 favorites]


does anyone understand why *this* is how grocery delivery gets done?

Because no one actually knows what is on the shelves. Not the grocery store, not the distributors, not the store employees. Every item comes from a different vendor with a different tracking and billing system on a different schedule from a different truck. Lots of brand have their delivery guys stock the actual shelves even though they don't work there. No one has been able to figure out how to manage this efficiently that doesn't involve purchasing managers walking the aisles with clipboards.

Similarly, if you have a shopping list someone is going to have to walk the aisles to find the things and make a substitution, if possible.

So yeah it's inefficient, but the inefficiencies and hassle are all off loaded on to the gig worker. Works out great for both the grocery store owners and the tech capitalists.
posted by bradbane at 10:57 PM on May 17 [81 favorites]


Surprising but explanatory, bradbane.

I still wish one of my local groceries had been able to close its doors and use its own workers to do the selecting. I trust them to look after each other, basically.
posted by clew at 11:18 PM on May 17 [9 favorites]


Well, even at the cruchy COOP I shop at, the employees seem to not give a shit about distancing, more than my other local groceries.
posted by Windopaene at 11:25 PM on May 17 [4 favorites]


Anyone know the implementation of Costco's "2-day" delivery? Their "same-day" = Instacart, but the "2-day" appears to be delivered by trucks on multi-delivery routes (operated by Costco? dunno), and I *assume* Costco has the tracking capability to pack orders from inventory by employees at a non-retail site.
posted by away for regrooving at 11:28 PM on May 17 [3 favorites]


Because no one actually knows what is on the shelves. Not the grocery store, not the distributors, not the store employees.

Huh. That makes a surprising amount of sense. It wasn't the case back in Ye Olden Days, but one of the reasons for supermarkets' economy of scale is that they can offload some stocking costs to their suppliers. Which means that, as you say, supermarkets don't know what's on the shelves. Consequently, stock picking is only practicable for small stores (which lack these economies of scale) or for the specialised stock picking warehouses that Amazon and some other retailers are building. But your local supermarket is optimised for picking by customers, and that doesn't translate well to picking by intermediaries.
posted by Joe in Australia at 11:46 PM on May 17 [2 favorites]


Here in Texas, we have H-E-B, who apparently had a long-standing plan for this sort of pandemic nightmare, and is made of pure awesome.

Except for their own grocery app, which is made of crap. Seriously, for as good as the store is otherwise, it’s a huge surprise how bad their app is. All of the delivery services have better apps.

So, it’s a catch-22 here. Since I live by myself, it’s actually easier and about 1000x less depressing to just take my chances with Grubhub, etc.

Cooking for one is not a good way for me to live.
posted by drivingmenuts at 12:19 AM on May 18 [4 favorites]


In my country supermarkets do pick and deliver. So-called "click and collect" is also popular (you order online, and then pick up your order later). Supposedly margins are razor-thin here, barely above 1%, and we also have that model where suppliers do a lot of the shelf-stocking. So I'm not sure that really explains all of it. I suspect labour laws about who counts as a contractor and the contingency of whether supermarket chains got in first or now with an acceptable offering are important too.
posted by i_am_joe's_spleen at 12:36 AM on May 18 [5 favorites]


While most are now wearing masks, they are going so fast, their social distancing seems to be lacking.

They aren't paid to work safely, they are paid to push regular, everyday people out of the way.
posted by They sucked his brains out! at 12:43 AM on May 18 [12 favorites]


There are a few grocery delivery services that don't do the "gig shoppers pick from a retail grocery store" model, instead running their own warehouse where actual employees prepare orders. Good Eggs comes to mind in the SF Bay Area, and FreshDirect is old and big enough that they've figured it out. Not to mention services like Weee!, which specializes in Asian groceries. But a lot of those newer smaller services tend to focus more on stuff that's not part of the regular "six companies make half the stuff in the store" supermarket supply chain like produce, prepared foods, specialty items, and products from local vendors, and I presume that's precisely because of the issues that bradbane talks about. If you're an ordinary supermarket, you might be able to call up Coke and Pepsi and have them come stock your beverage aisle for you. You can even make the vendors pay for the privilege of putting their products on your shelves. The grocery business has all been designed around these arrangements, and unless your delivery company is already big enough to try to dictate terms, you're not in a position to demand sweeping changes to the whole grocery vendor business model.
posted by zachlipton at 12:44 AM on May 18 [5 favorites]


One thing that surprises me about the article is that it takes it as a given that food delivery was broken except for in niche cases, notably Chinese restaurants and the big pizza places. That seems like a bit of an oversimplification to me. My impression from consuming a mix of 80s media is that restaurant delivery was something of a fixture of the stereotypical image of 80s life, in the same way that taking Uber everywhere (as opposed to mass transit) is itself a stereotype of the modern age. Similarly, it seemed like the reason people were mad about ghost kitchens in the first place is that they were stealing delivery business from local restaurants, which by implication were previously doing some ok-ish delivery business.

I was going to cite the example of Wheel Deliver, a third party meal delivery service that lasted for quite a few years in Pittsburgh, but it apparently went down in flames with the owner accused of stealing thousands of dollars from area restaurants. So, uh, perhaps it isn’t the success story I thought.
posted by Going To Maine at 12:48 AM on May 18 [1 favorite]


Where I am, Uber Eats doesn't let you tip more than €2 via their app.
I mean, what the everloving fuck is that? I should be able to tip however much I want.
And so I do, in cash (which the delivery people don't really like - I asked them and they said they would prefer not to have to handle cash - but they take anyway).
So fuck Uber Eats too.
posted by chavenet at 1:28 AM on May 18 [4 favorites]


I dabble occasionally to update a cyberpunk roleplaying game from the 80s I used to play with my mates. The 80s vision of the dark corporate-run future is mostly outdated (but strangely prescient in places). However, to make it suitably oppressive and claustrophobic while being somewhat plausible seen with today's eyes I simply slathered on a thick layer of gig economy and that did the trick. But it seems like the US is hell-bent on overtaking my dystopic visions, so I might need to up my game (so to speak...)
posted by Harald74 at 2:02 AM on May 18 [9 favorites]


In my country supermarkets do pick and deliver. So-called "click and collect" is also popular (you order online, and then pick up your order later).

Also very popular here (we might live in the same country).

This explains why there are frequently substitutions on orders. If they had a total inventory system, that would never happen because you wouldn't be able to order something they didn't have. Except of course that the system doesn't know exactly what is available.
posted by atrazine at 2:03 AM on May 18 [3 favorites]


My father in law is a venture capitalist. He describes these apps as a great way for consumers to take investor money before it all collapses.
posted by benoliver999 at 2:09 AM on May 18 [24 favorites]


Speaking of gig shoppers: does anyone understand why *this* is how grocery delivery gets done? Is the problem of building an efficient internal picking operation plus contracting with a delivery service so complex or otherwise taxing enough that it's just easier to pay a third party a fee to take the problem off their hands in as inefficient a manner as assigning one gig worker for each order start to finish?

It isn't done like this in the UK. All the major supermarkets handle their own grocery packing and delivery logistics. The only knowledge I have of Instacart et al comes from reading North Americans talking about it here. For a while I assumed Instacart had something to do with Instagram.
There are usually very few or no substitutions on our deliveries but there have been a lot more during lockdown now that grocery delivery orders have skyrocketed.
posted by EndsOfInvention at 2:35 AM on May 18 [10 favorites]


Yes, Australian supermarkets do their own grocery picking and delivery too.
posted by daybeforetheday at 3:15 AM on May 18 [1 favorite]


If only DoorDash was not a horrible experience every time I have come back to try it. And even the restaurants I've used complained about the drivers they get. One of which they keep asking politely for the driver to stop claiming deliveries as "picked up" prior to arriving (which consequently causes the order to disappear from the restaurant owner if they are in the middle of making it). Add to that, registering was probably an omen to not even try it, as the web site kept throwing errors. I am sure the driver does not get a decent paycheck out of this either. Definitely not a lot of happy people on all sides of the transaction, at least in my experience.
posted by samsara at 3:19 AM on May 18 [3 favorites]


Australian supermarkets do their own grocery picking and delivery too.

I've seen photos of a large automated warehouse operated by Coles (a large Australian supermarket chain) and understood that its grocery deliveries came from there. Maybe I'm wrong, but I haven't seen their delivery vans picking stuff up from local supermarkets, so presumably they're not doing grocery picking there.
posted by Joe in Australia at 4:12 AM on May 18


does anyone understand why *this* is how grocery delivery gets done?

Count me as another person who lives in a place where supermarkets (and much smaller groceries, including independent ones) all handle their own deliveries. It's also a place where the taxi system was so functional that I really didn't understand why people in the US were so excited about Uber (until I remembered what it was like calling a cab in some American cities). It can be easy to think that what's broken in your own area is just inevitably broken for solid reasons, but that's often not the case.
posted by trig at 4:17 AM on May 18 [30 favorites]


the top post in the HN comment thread for this is fairly amusing:

> 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 neighbours have also partaken.)
> Glad to know it’s scaling. SoftBank has assembled a unique concentration of stupidity for itself.

-- https://news.ycombinator.com/item?id=23219001
posted by are-coral-made at 4:26 AM on May 18 [67 favorites]


in my mind's eye, like a cloud

a vague recollection of when people said the internet would cut out the middle man

then it dissolves...
posted by dmh at 4:33 AM on May 18 [11 favorites]


The big grocery store chain here in Western PA does their own curbside pickup and delivery. We use the pickup option every week. There is always something missing, but they call you ahead of time to at least warn you.

The past two times we've ordered restaurant food for pick-up, we've gotten told off for using GrubHub to order. I didn't do it on purpose, I just clicked the "order now" button on their websites.
posted by soren_lorensen at 4:51 AM on May 18 [3 favorites]


Because no one actually knows what is on the shelves. Not the grocery store, not the distributors, not the store employees.

Is this true of the grocery section at stores like Target that have planograms and handheld scanners? I'd think that would be the solution and it's just differently awful. [Archive link to a short story previously seen here.]
posted by snuffleupagus at 4:53 AM on May 18 [4 favorites]


The past two times we've ordered restaurant food for pick-up, we've gotten told off for using GrubHub to order. I didn't do it on purpose, I just clicked the "order now" button on their websites.

Slice is a company trying to be DoorDash/GrubHub but for pizza only.

If you call the Dalia's pizza store near me (a local chain), before you get through to the store it runs you through an auto-attendant that offers you $3.00 off to hang up and order through the Slice app or website instead. Including for pickup orders. And the only online ordering link on the store website takes you to Slice.

Dalia's basic small cheese pizza is $8.00 so $3 off as an incentive to use Slice is around a 40% discount....

I did it once or twice but when picking up my order the workers seemed clearly annoyed by the whole Slice thing, it appears to be un-integrated and the crew has to constantly monitor the Slice terminal and re-enter the orders into the store's ordering/POS system, so I dropped it.
posted by snuffleupagus at 5:00 AM on May 18 [1 favorite]


The past two times we've ordered restaurant food for pick-up, we've gotten told off for using GrubHub to order. I didn't do it on purpose, I just clicked the "order now" button on their websites.

Were they definitely the restaurants' own sites? Because Grubhub is known for making fake restaurant pages for you to order (through them) from.
posted by trig at 5:03 AM on May 18 [24 favorites]


Because no one actually knows what is on the shelves. Not the grocery store, not the distributors, not the store employees.

Guys, guys, guys...the robots will know what's on the shelves, it's all taken care of.
posted by jeremias at 5:09 AM on May 18 [2 favorites]


The sooner these vultures go out of business, the better.
posted by acb at 5:17 AM on May 18 [5 favorites]


> soren_lorensen:"Grubhub. I just clicked the "order now" button on their websites." Grubhub sets up websites in the names of restaurants, takes orders, screws restaurants. It's very difficult for customers to bypass this without some effort, and ordering takeout should be easy. Grubhub and its ilk are vile. /what trig said
posted by theora55 at 5:19 AM on May 18 [8 favorites]


s the problem of building an efficient internal picking operation plus contracting with a delivery service so complex or otherwise taxing enough that it's just easier to pay a third party a fee to take the problem off their hands

Fresh Direct's relative advantage here isnt that they are older, its that they had the capital needed to build out entire facilities for this purpose, of course its much easier (and dramatically worse) to just build an app and exploit underemployed folks, and degrade the shopping experience for your in-store shoppers at the same time.
posted by Exceptional_Hubris at 5:21 AM on May 18 [1 favorite]


I believe GrubHub has also used front phone numbers where you think youre calling the place for delivery but youre calling on a grubhub created number so they charge a connextion/listing fee even though they only provided an unneeded duplicative "service".

Fuck them is right.
posted by Exceptional_Hubris at 5:25 AM on May 18 [11 favorites]


Is this true of ... stores like Target

In my experience, Target has way less of an idea what’s in stock than any grocery store.
posted by STFUDonnie at 5:26 AM on May 18 [9 favorites]


I tried Instacart, they were unprepared for the volume of orders, canceled my order 6 hours after it was due. I lost my $20 off $60 coupon. They were so casual about the annoyance, clearly a company that combines cluelessness with not even pretending to care about customers. They have limited inventory and surcharge on every item, as far as I can tell. I would bet they get payments from food companies to choose specific items, similar to shelf payments.

While they are justifiably notorious for underpaying employees, I'm going to say good things about Walmart. They use their own employees to pick groceries for pickup and they are the only store in my area that ever has slots open, several days out, and you don't have to be at their site at midnight, trying to get a delivery time. Not sure Walmart employees are treated worse than Instacart or whoever, possibly better. Sadly, they can't and wont accept tips; I tried.
posted by theora55 at 5:28 AM on May 18 [5 favorites]


I would bet they get payments from food companies to choose specific items, similar to shelf payments.

This is not how Instacart works at all. It's the soylent green of delivery -- it's just people, walking the aisles and filling your order according to what they see in the shopper-side of the Instacart app before they put it in their back seat and bring it to you.

What you're proposing is happening would arguably be a form of fraud under the terms of service. I seriously doubt they're dabbling in any of that.

You pick specific items, differentiated by the UPC. Not just "16 oz of sour cream." You can designate replacements for all of your items, or specify no replacement.

Some stores (most notably Smart and Final, maybe Costco too) do seem to have direct Instacart employees in-store picking orders, and then the drivers are the gig workers. It's obvious when there's significant (hours-long) gap between the order being assembled, which is when you get messages about substitutions, and the order being dispatched for delivery.

You can read the instacart shoppers subreddit to get a better idea what goes on.
posted by snuffleupagus at 5:37 AM on May 18 [5 favorites]


I shopped last week. I had a coupon for pepperoni. There are at least 4 locations in the store that have pepperoni; seemingly separated by brand. One version of baking supplies is in 1 aisle, there's another version in the natural foods area. Grocery stores want you to impulse buy and not to price check, mostly, so efficiency of shopping not only doesn't happen, it is actively disrupted. They do have some idea what's where in each store, because there's a marketing plan for everything. The people who stock the store have specific instructions where things go. I would so love an app that would help me find stuff, esp. now in PlagueTime.
posted by theora55 at 5:39 AM on May 18 [8 favorites]


My son loves tamales. There is a restaurant a few blocks away that apparently has good tamales. We have never ordered from them because I cannot for the life of me find a phone number or menu that seems to actually be associated with the restaurant instead of some venture-capital bullshit money losing scum-sucking company. If not for the pandemic, we would have walked there and eaten at the joint, because it is fairly new and I want to support my local businesses. DoorDash, GrubHub and the like can go pound sand. I truly don’t understand why people keep giving them money, if Silicon Valley investors are so interested in throwing money away for no return why don’t they take on the student debt crisis and at least do something useful and productive for society?

Also, this comment in the FPP deserves to be publicized:
I work on the Google Search team. We understand the concern about unauthorized order links. That's why we remove any order links from Google business profiles if a business reports there's no authorized relationship. They can do that following the instructions in our help page about order links here: https://support.google.com/business/answer/9503613

Will it work? Who knows, but the more people who try it, the better.
posted by caution live frogs at 5:52 AM on May 18 [14 favorites]


I would so love an app that would help me find stuff, esp. now in PlagueTime.

One off-label and cost-free use of Instacart is to check stock from home, although it's only as current and reliable as the data it's getting from the store's system. Some oddball items I know certain store locations carry (because I buy them there) aren't indexed at that location (but show up at others). I'm looking at you, Bussetto Antipasto Assortment, my hypertensive paramour.

Instacart's site will also tell you which of their other covered stores are claiming to have stock of that item, or a suggested replacement (usually a different brand or a different size).
posted by snuffleupagus at 5:57 AM on May 18 [3 favorites]


The big grocery store chain here in Western PA

Gyniggle?
posted by GCU Sweet and Full of Grace at 5:58 AM on May 18 [10 favorites]


Because no one actually knows what is on the shelves. Not the grocery store, not the distributors, not the store employees.

Which is in a certain sense funny, because Wal-Mart poured absurd amounts of money into RFID research to make RFID chips cheaper and cheaper and cheaper, with the plan of putting a chip on every product so inventory could be done by just walking a scanner down an aisle. Guess that didn't work out, but at least the research they funded to try and get there was pretty effective.
posted by Pope Guilty at 5:59 AM on May 18 [4 favorites]


It would be funny if it were true. It's not. In like seven different ways. What is true is they don't have real time inventory or a way to know if their empty spaces on the shelves for product in the back. Usually they do the re orders to the distribution centers nightly based on scanned SKUs. And they rely on people walking the store for out of stocks during the day.
posted by JPD at 6:24 AM on May 18 [8 favorites]


The days back when I had a drawer of delivery menus that the restaurants paid to have printed up and then you would call the number and some minutes later have dinner seems like a lost wonderland.

It was even a fun way to bond with someone new--"hey, the menu drawer is next to the fridge, pick one out" and then you learned something interesting about this person.

I dunno, removing friction from life isn't always a good thing.
posted by Automocar at 6:25 AM on May 18 [33 favorites]


Re: Costco 2 day delivery: I’ve ordered a bunch of stuff through it, all of which has been delivered by UPS, with all items packed into Costco labeled boxes. My assumption is that it’s coming direct from a Costco distribution center, and I think that’s reflected in the kinds of things you can get through the service, which does not include pretty much anything from their fresh or frozen grocery sections (and no alcohol in my state, but that can vary). So, dry goods, snacks, office supplies, laundry detergent, etc are all available, but no meat or produce or anything like that. I think that’s actually a small corollary to bradbane’s comment - some things come to stores through their own distribution centers, in which case they might have a better idea what’s on the shelves at a particular store, but fresh items will be based on more local distribution networks.
posted by LionIndex at 6:32 AM on May 18 [4 favorites]


I still wish one of my local groceries had been able to close its doors and use its own workers to do the selecting. I trust them to look after each other, basically.

Grateful that this is what our local (small) co-op does now. We email our list and they call sometime later that day (usually a few hours) telling us that the items are ready, take payment over the phone, and go pick up the bags curbside (under an awning).

Neat addition recently is that they were able to create a VR of the store so one can browse the aisles to see if something is in stock or if you just can recall the name of a product. I am putting creating a recipe to brew a pear saison, and I was able to use the VR to see that they do have the pear juice I want. Win.
posted by terrapin at 6:34 AM on May 18 [14 favorites]


It would be funny if it were true. It's not. In like seven different ways. What is true is they don't have real time inventory. Usually they do the re orders to the distribution centers nightly based on scanned SKUs.

When I worked for Kroger, I was kind of surprised how good their logistics were. What I find is that they have a pretty good idea what's in the store at all times. They have no idea what's on the shelves at any particular moment. The reason is that they can't account for what's sitting in shoppers carts, nor for what's in their back warehouse (which you might be surprised at how small it is), waiting to be shelved. What is on the shelves is usually what they expect to need for that day, and that is all. They're depending on a constantly replenishing supply chain to keep smooth operation, and for the most part, it works ok. If your shopping service is picking up your order off the shelves like any regular in-store shopper, they're subject to the same shortage and substitution problems faced by any regular in-store shopper.
posted by 2N2222 at 6:45 AM on May 18 [21 favorites]


We're trying to be good upper middle class citizens for isolation. We haven't been out anywhere besides a couple of drives where we haven't left the car and the pharmacy drive through since the middle of March. Peapod, for all its faults, at least does all its stuff in house with workers that are decently paid and lets me tip 20% straight to the driver's pocket on top.

Thankfully, I can count the number of times I've had to use Instacart on one hand and that's only because Peapod has had trouble keeping some items in stock and doesn't do an exhaustive style of replacement looking for any possible replacement. We also tip 20% there but it still doesn't feel like enough to the point where I'll just leave a twenty in the door for them on top of the tip.
posted by Your Childhood Pet Rock at 6:52 AM on May 18 [1 favorite]


I read the article, which is great and specifically about how restaurant food delivery companies fuck over restaurants. Is there a way for all the folks who want to discuss grocery delivery companies to start an FPP about that? Grocery stores aren't fucked by delivery apps in the same way restaurants are, so I'm not sure why most of the comments in this thread are about something other than the topic of the link.
posted by 23skidoo at 6:54 AM on May 18 [18 favorites]


He describes these apps as a great way for consumers to take investor money before it all collapses.

If there wasn’t a worker in the middle of this process getting squeezed I’d feel a lot better about this.
posted by mhoye at 7:07 AM on May 18 [15 favorites]


I'm not sure why most of the comments in this thread are about something other than the topic of the link.

Because we're talking about food delivery more generally, and if you're staying in you need either groceries or meals delivered. Both are gig work, brokered and paid similarly. It's conversation, not a post-lecture conference section.

Their interaction is good to bear in mind.
posted by snuffleupagus at 7:08 AM on May 18 [3 favorites]


Maybe there's a common thread to be found in the seeming perversity of the behavior of both grocery and restaurant delivery services. E.g. I'm finding Meijer's Shipt-provided service almost incomprehensibly bad, with orders getting pushed back hour after hour, and eventually nuked from my cart as if they had never existed, because Shipt's terms are so awful that nobody wants to work for them even in a relatively low-cost small city.

If these were companies responding to ordinary market incentives, rather than VC pyramid schemes that just need to keep up a certain volume in order to keep that investor cash coming in, at some point you'd expect them to change behavior and actually start treating their [misclassified employees] a little better.

The Doordash example is considerably weirder than anything I'm aware of in grocery delivery, but it has the same hallmarks of a company that, much like more familiar money-laundering operations, simply isn't bound by the ordinary laws of retail gravity.
posted by Not A Thing at 7:10 AM on May 18 [1 favorite]


There is a restaurant a few blocks away that apparently has good tamales. We have never ordered from them because I cannot for the life of me find a phone number or menu that seems to actually be associated with the restaurant instead of some venture-capital bullshit money losing scum-sucking company. If not for the pandemic, we would have walked there and eaten at the joint, because it is fairly new and I want to support my local businesses.

Around here, far and away the best and most current information about what restaurants are open, what their procedures are, and what their takeout menus look like, is all on Facebook. That is where the restaurants themselves post in many cases (while websites often haven't been updated during the pandemic), as well as people posting on the community pages to share information. There are many, many problems with FB, but in this specific case it is providing much better information than I can find any other way.
posted by Dip Flash at 7:17 AM on May 18 [11 favorites]


[It's okay for the conversation to drift to grocery delivery -- to many consumers they're very similar and it's certainly helpful to hear how they're the same and different -- and it's okay to continue to make points about doordash, grubhub, ubereats, etc.]
posted by Eyebrows McGee (staff) at 7:18 AM on May 18 [4 favorites]


It seems that spending lots of money to build up a customer base can be worthwhile if either
1) you have a product that scales (high fixed cost, low marginal cost), so once you have a lot of customers, you will be able to both offer low prices and make a large profit, or
2) you have a sticky process, so that it's costly for a customer (or partner) to move to another provider.

For food delivery, I don't see either of these occurring to a great extent. If you are using contractors, it wouldn't be that difficult for another service to replicate what Doordash is doing, beyond some software costs. The one possibility to scale is a delivery person could pick up multiple orders at the same restaurant (or restaurants in the same area) and deliver them to the same neighborhood. Is that happening at all?

And when people want Pizza, do they see what Doordash is offering? I'd think they choose the restaurant first, then see what delivery companies can bring that food.

What am I missing that the presumably very smart people who chose to invest nearly $1 billion know? (And that is meant sincerely. I truly believe that they are generally very smart people who work very hard to do a thorough analysis. I also believe that they can make huge errors in judgment, or simply invest in firms that they expect to fail because there is a small chance of making a huge return.)
posted by Mr.Know-it-some at 7:21 AM on May 18 [2 favorites]


I think this bit from the end of TFA might help draw the threads together:

The companies unload their capital cannons on customer acquisition, while this week’s Uber-Grubhub news reminds us, the only viable endgame is a promise of monopoly concentration and increased prices....But is that even viable?Third-party delivery platforms, as they’ve been built, just seem like the wrong model, but instead of testing, failing, and evolving, they’ve been subsidized into market dominance. Maybe the right model is a wholly-owned supply chain like Domino’s. Maybe it’s some ghost kitchen / delivery platform hybrid. Maybe it’s just small networks of restaurants with out-of-the-box software. Whatever it is, we’ve been delayed in finding out thanks to this bizarrely bankrolled competition that sometimes feels like financial engineering worthy of my own pizza trading efforts.

posted by snuffleupagus at 7:21 AM on May 18 [2 favorites]


People should try reading the article, because it's amazing. Door Dash was either knowingly or unknowingly ready to give away thousands of dollars during a 'trial period' for a restaurant that never signed up to their service in order to present inflated numbers to sell the owner on a bum deal. Figuring out which restaurants are in this trial period and cluing them in on it would be a great way to make sure DD doesn't get any real business, and that restaurant owners can milk this VC money for as much as it's worth.
posted by codacorolla at 7:37 AM on May 18 [33 favorites]


Interesting(-ish)ly to me, not many people seem to be aware that Walmart first started experimenting with delivery and pickup service when I was still in high school. In 1997. The service charge was $5 per order for the pickup service and either $10 or $15 (I can't recall which) for delivery. They ended that particular experiment after a year or so.

It seems pretty clear to me that the reason grocery delivery service didn't take off sooner is that people simply won't pay what it actually costs, at least in normal times. Even with the VC money floating around, there isn't enough money in it to pay people a decent wage.

Amazon does pay Prime Now drivers in a way that approximates an hourly wage (it works out to $15+ an hour where I live). They don't even have to scour a grocery store for items. We've all read what it's like to work in an Amazon warehouse, though, so that's just transferring the misery onto someone who isn't visible to the customer. For a while, Amazon was also delivering restaurant orders through Prime Now. They quit doing that a while back, though. Whether it was just plain unprofitable or whether they killed it because the competition meant that scaling it up was impossible, I can't say. Like Google, they tend to drop

(Yes, Uber Eats does sometimes have a driver pick up 2 or 3 orders at once, Mr.Know-it-some)
posted by wierdo at 7:45 AM on May 18 [3 favorites]


And when people want Pizza, do they see what Doordash is offering? I'd think they choose the restaurant first, then see what delivery companies can bring that food.

There's no set order for me. Sometimes, I log into the delivery service, and see who's listed. Once in a while, there's a coupon or deal. Other times, it's the other way around (as above).
posted by ZeusHumms at 7:48 AM on May 18


Yeah, proving there's "demand" for 24$ pizzas if you sell them for 16$ will not shock me.

And the anecdotes about Doordash drivers that don't have a bag that fits pizza shows one benefit from the restaurant directly hiring their own drivers. They can be properly equipped for what that restaurant offers.
posted by RobotHero at 7:53 AM on May 18 [3 favorites]


What am I missing that the presumably very smart people who chose to invest nearly $1 billion know?

So, in a bit more depth (I've written about this before - apologies for the self-link) but what you're missing is the primary point of these exercises is not at all to create viable, self-sustaining companies. These are a dumping attack on services-based economies, largely subsidized by state actors - typically industrial or extractive state economies - and their proxies.

If these companies were dumping stuff at a huge loss we'd recognize that for what it is. We've had laws in place to prevent that sort of thing for ages - the Tariff Act in the US is 90 years old - but we don't collectively understand that thanks to software, there's now an unchecked and largely unrecognized way to dump services dramatically below cost, with all the same pernicious effects.

Better yet, the software-and-VC scaling model effectively gives sufficiently well-funded actors a tool for directly controlling employment rates (and consequently, voting patterns and, indirectly, economic policy) in targeted countries. Throw a bit of voter-trend information in the mix - people vote for demagogues when they're unemployed and frightened, and demagogues take care of each other - and pretty soon this whole machine starts to look like an easy way to keep a firm hand on the reins of a vulnerable and sufficiently blind country's trade policies and electoral apparatus for a bargain price.

If I were, say, a Saudi state investment agency or some other well-heeled oligarch looking at a global economy moving away from oil and wondering how to effectively neuter the world's last superpower and position themselves to buy up the scraps for a song when it falls apart, throwing a billion or two per quarter at that doesn't look like a waste at all. It looks like a bargain.

In conclusion, the gig economy is a symptom of economic vulnerability being actively exploited, universal basic income, living minimum wage and universal health care are national security issues in a asymmetrically-networked global economy and definitely, definitely fuck Doordash.
posted by mhoye at 7:59 AM on May 18 [44 favorites]


Does anyone remember WebVan? It was kind of like the ghost restaurant or Amazon version of grocery stores. They did grocery delivery out of their own warehouses. So they didn't have the problem of having their own shoppers going through a grocery store. Their drivers picked up goods for several houses then drove (often quite a distance) from the warehouse to do the deliveries.

It was a 2001 dot-com flameout. If they had started during a pandemic, maybe it would have succeeded.
posted by eye of newt at 8:00 AM on May 18 [10 favorites]


Around here, far and away the best and most current information about what restaurants are open, what their procedures are, and what their takeout menus look like, is all on Facebook

I concur. Being able to run a restaurant and being able to maintain a web presence for said restaurant are mostly orthogonal. And especially with things changing as quickly as they are, it's a lot easier for a restaurant to put something on Facebook indicating their current status than to update their "real" web site.

Also, as far as I know, Facebook is a reliable source of phone numbers that are the restaurant's actual phone number and not some sort of redirect through GrubHub or Uber Eats or DoorDash or whatever. I'm starting to think I might just need to go to the physical restaurant and write down phone numbers on a piece of paper, though, if I want to be sure nobody's getting a cut.
posted by madcaptenor at 8:02 AM on May 18 [4 favorites]


It can be easy to think that what's broken in your own area is just inevitably broken for solid reasons, but that's often not the case.

Everything like this that is broken in the US IS broken for a solid unchangeable immovable reason, and that reason is to make a few people who are already very wealthy even more wealthy at the expense of everyone else. That is the sole purpose of this country. There's nothing else.
posted by poffin boffin at 8:10 AM on May 18 [30 favorites]


I've found DoorDash handy when I was traveling (remember traveling?) to order from restaurants in larger cities that wouldn't deliver to where I was staying. Even with the markup, it still cost less than taking a cab in both directions. In NYC when I can't reach the restaurant directly I always use Seamless, which at least has identical pricing to the restaurant menus - I don't like GrubHub and I can't point to why. Which I realize is insane, since Seamless is owned by GrubHub and so presumably the same.

I still miss kozmo. Now that was a delivery service that was too awesome to survive.
posted by Mchelly at 8:14 AM on May 18 [5 favorites]


We order for delivery by calling restaurants directly, because fuck GrubHub/Seamless/DoorDash/ScamOTron.
posted by grumpybear69 at 8:28 AM on May 18 [5 favorites]


Before the days of Uber/Lyft, I lived in downtown Chicago, near an enormous convention center and an enormous Taxi company's HQ. I used to call taxis over the phone pretty often as we didn't have a car for many years, and I needed them for business/lesiure/etc.

Calling the cab companies was hit or miss at best. Sometimes, no one would answer. Other times, I'd get hung up on, yelled at, or yelled at then hung up on. This happened way more than once or twice. And very often, a cab would be called and then never show up. That happened often. Calling a cab because you need to be at the airport at 6:30am and then no cab shows up? That's a very big deal. And this was from 2-3 different large cab companies in a giant American city.

The cab companies were using telephones and radios for dispatch, basically the same technology that cab companies had been using since the 1930s. The dispatch operators were likely overworked, stressed out, etc. The cab companies did NOTHING to innovate or improve on any of that stuff until Uber/Lyft came in and handed them their asses. So While Uber/Lyft have heinous business practices and are generally vile corporations, it was easy to see how they became enormously popular very quickly.

Restaurant/grocery delivery is a different animal. But there's similarities.

I go out of my way to AVOID using delivery services. But sometimes, it makes much more sense to use them. Ordering food for large gatherings, for instance. Using Grubhub's web interface to order food for 20 people (my wife's side of the family is HUGE) is vastly more streamlined than placing the order over the phone to a harried restaurant worker whose first language may not be English and who is taking my order in a loud restaurant.

What's REALLY vile is Google pushing the delivery service menus at me when I try to find a restaurant's contact info. I live in a different part of Chicago now. You know the term "food desert?" I live in the opposite of a food desert (food rainforest?) where I am fortunate to be surrounded by dozens of small and large restaurants of every type of cuisine you could imagine from all over the world. I like to try the various small restaurants, but Googling them shoves a Grubhub or Doordash menu at me, and sometimes I cannot even quickly find a phone number for these Mom & Pop places. You'd think some of these places don't even have a telephone. If I dig a bit I can find a phone number. But Google is in on this crap, where even just trying to see a menu shoves the menu via a delivery service in my face.

We can't expect every tiny restaurant to have a well-designed website and online shopping interface. These days, I try my best to call the restaurant directly. But that gets harder and harder to do.
.....

ALSO: to all you web designers out there... if you design a restaurant menu and you DO NOT have their phone number and hours of operation on the front page near the top, please go get a different career. Thanks!
posted by SoberHighland at 8:30 AM on May 18 [22 favorites]


I hate telephoning orders, and I really want a way to use the internet to order from local restaurants over the internet and pay with a credit card and have the restaurant's delivery folks show up and I can give them a cash tip because long live cash. But I want it to not fuck over the very restaurants I want to support.
posted by rmd1023 at 8:31 AM on May 18 [6 favorites]


"(And that is meant sincerely. I truly believe that they are generally very smart people who work very hard to do a thorough analysis. I also believe that they can make huge errors in judgment, or simply invest in firms that they expect to fail because there is a small chance of making a huge return.)"

I mean, there are people here who make this comment like me telling grandma how to suck eggs, but my experience at a start-up with a successful IPO in the dotcom era taught me that the venture capitalists and the IPO brokers (such as the investment banks) have incentives ordered such that business fundamentals are tertiary, at most. The risk is transferred downstream to the less informed investors, funds and retail. The latter moves with the herd and assumes everyone else knows what they're doing.

I have a childhood friend who is a senior analyst at one of the large banks and I'd love to discuss this with him, but the conversation probably wouldn't go well—my experience made me very cynical about securities and finance.

Early on, the venture capitalists were well-informed and involved; rounds of funding were all about pursuing and expecting actual business success. Later, though, it became about whatever it took to sell a successful IPO. Likewise with the investment bank that brokered the IPO. The IPO was quite successful and the venture capitalists and the investment bank made enormous amounts of money. By that point, the venture capitalists had a bigger share of the company than either of the founders and largely cashed out at the IPO.

Then, trading on NASDAQ, things got even more divorced from reality, not less so. Of course, this was in the high-flying dotcom days of 1999-2000, so it was all speculation, all the time. Stock performance began driving strategy and planning and the company chased after the trend du jour like a dog at a tennis match—to support the ever-increasing valuation. Not so much, you know, the bottom line. Or even sales.

I don't think that much has changed. In numerous respects, it's become much worse with all this capital desperate to find investments in which to flow.

It's not so much that literally everyone is either deluded or ignorant. Many of the key players understand exactly what game they are playing.
posted by Ivan Fyodorovich at 8:44 AM on May 18 [8 favorites]


Were they definitely the restaurants' own sites? Because Grubhub is known for making fake restaurant pages for you to order (through them) from.

My local takeout place suffers from this. The website operated by the restaurant and the justeat clone differ only because the clone added 'and' in the middle of the domain name (given the original was *already taken*). It's not till you get to the checkout part that you see much difference.

The restaurant started putting discount vouchers in their orders done thru justeat with the right domain address on it, and a permanent 10% off if you order direct - they still make more money that way than through Justeat's vampire site that they can't get them to turn off while still being listed on justeat itself. (I got talking to one of the delivery drivers about it). Restaurant sends out its own delivery guys either way, and its the same menu/card options on both, just the just eat version takes a hefty slice off the top.

It should be nailed for goddamn fraud.
posted by Absolutely No You-Know-What at 9:03 AM on May 18 [9 favorites]


How Google, Doordash, and Grubhub Conspire to Screw Local Restaurants
So to summarize, DoorDash pays Google an advertising fee to steal customers that are searching for our restaurant name “Saddleback BBQ” and they are redirecting them to their own page. From there a customer can purchase from any BBQ restaurant in Lansing or if the customer chooses to order from us we must pay DoorDash a fee for bringing us that customer.
posted by theodolite at 9:15 AM on May 18 [5 favorites]


Mr.Know-it-some: What am I missing that the presumably very smart people who chose to invest nearly $1 billion know?

They want to inflate the hell out of their sales numbers in preparation for either an IPO or a sale. They get to walk away with the profit before the whole thing collapses. The only thing you're missing is that if you have enough wealth that you can casually throw billions at a bunch of startups, it's okay if this strategy fails most of the time as long as it works really well, like, once.

As to why a company or hedge fund would be willing to buy one of these insolvent companies, I think a lot of them plan to basically scrap them for assets. Like maybe you don't care if Doordash makes money because you now have access to a bunch of consumer data for the restaurant market and selling that is where the real money is, or maybe you'll shutter that line of business entirely but keep on the brilliant lead engineer for some project that actually makes money.
posted by capricorn at 9:25 AM on May 18 [6 favorites]


It's simply amazing that so much of our economy is built, fundamentally, on fraud and Ponzi schemes that would be illegal if done offline.
posted by Automocar at 9:29 AM on May 18 [9 favorites]


Oh and I should also add that this and other unethical shit pulled regularly by investors and boards is basically the source of most of the problems in modern US society. The CEOs that make 9-figure salaries are venal enough, sure, but they are not the top of the food chain.
posted by capricorn at 9:29 AM on May 18 [4 favorites]


As to why a company or hedge fund would be willing to buy one of these insolvent companies, I think a lot of them plan to basically scrap them for assets.

No, the is extremely untrue.

No one invests this way without hoping for a 100x return. Even just making a decent profit over time (a lifestyle business) is seen as just a bad as just literally setting the money on fire.

Unless they expect someone like Facebook to pay $10B for the data, no VC is putting 9 figures into something to eventually scrap them for assets.
posted by sideshow at 9:34 AM on May 18 [4 favorites]


One thing that's especially maddening right now is that most of these services (there's one local pickup-only startup that's an exception) don't let you tip through the app for pickup. Calling the restaurant and paying them directly for pickup is obviously better (I mean, I hate making phone calls, but will do it in exchange for not bankrupting restaurants), but a bunch of restaurants are, with all the digital divide and access issues this implies, straight-up instructing customers to use apps for pickup orders because none of us want to to interact with each other or handle cash tips right now.
posted by zachlipton at 9:36 AM on May 18 [3 favorites]


mhoye's hypothesis is tidy enough to make me dubious, but as an exploiter or stabilizer for the systemic ones it's really plausible.

I don’t find either Extraordinary Popular Delusions and the Madness of Crowds or Mackay in the index to Capital. Anyone have Piketty’s second book to check? (Lots about democracy and attacks on it in Mackay, come to think of it.)
posted by clew at 9:38 AM on May 18


....They did grocery delivery out of their own warehouses. So they didn't have the problem of having their own shoppers going through a grocery store... It was a 2001 dot-com flameout. If they had started during a pandemic, maybe it would have succeeded.

Ocado in the UK has no stores, but delivers from warehouses where the goods are picked by robots. They’re doing fine, and make a lot of extra money from selling the warehouse technology.
posted by Segundus at 9:39 AM on May 18 [2 favorites]


Fascinating. (Well, and horrifying.)

The local bodega where I buy everything lately tried very hard to convince me to use a new delivery service last week, with offers of free delivery and 10% off for the first month. I asked the guy whether that was good for them or not, and he was sort of cagey about it but assured me it didn't cost them anything. (He's pretty new and probably didn't recognize me as neighbor.) Now I'm wondering if they're actually getting a significant kick-back from the pockets of venture capitalists at the moment. If that's the case, maybe hiring someone to cross the street with my groceries (or a year's supply of top shelf liquor) and tipping them well in order to support local business isn't as dumb as it sounds. Now that I know this is a thing that exists, I'm going to ask more specific questions.
posted by eotvos at 9:41 AM on May 18


No one invests this way without hoping for a 100x return. Even just making a decent profit over time (a lifestyle business) is seen as just a bad as just literally setting the money on fire.

Another way to look at it is that there are wealthy people with so much excess cash that they can't think of anything more productive to do with it than buy lottery tickets. Even though the lottery is a very bad investment.
posted by JackFlash at 10:22 AM on May 18 [11 favorites]


If there wasn’t a worker in the middle of this process getting squeezed I’d feel a lot better about this.

The Trolley Problem meets AITA?
posted by acb at 10:36 AM on May 18


Door Dash was either knowingly or unknowingly ready to give away thousands of dollars during a 'trial period' for a restaurant that never signed up to their service in order to present inflated numbers to sell the owner on a bum deal.

Now I'm wondering if they're actually getting a significant kick-back from the pockets of venture capitalists at the moment.

They are definitely doing this on purpose, it is a conscious strategy. It is worth it to them to burn piles of money to be able to show that they have X number of active users this week, or greater revenue than last month. Whether or not that revenue was eclipsed by them giving out massive discounts or kickbacks or coupons isn't a bug, it's a feature.

Everyone who lives in the bay area is familiar with this phenomenon. Every time there is a new VC flavor of the week startup, you can usually get massively subsidized/free service simply for signing up and running an order or two through it. Then you do that for the 3-6 identical competing VC backed companies doing the exact same thing.

For a while it was laundry delivery. There were like 5 different pick up, launder, fold, and return companies. Obviously this would under normal economics be an expensive luxury service.... But every single one of them would give you a free first order, and then after that you'd get a steady stream of desperate marketing email with a coupon for 50% off or whatever. So you could just bounce between initial offer discounts and get free laundry for a good month or two before they all went under.

When the cannabis-tech-delivery companies first started, whoo boy, I basically got free weed for a year. Thanks Softbank!
posted by bradbane at 10:38 AM on May 18 [12 favorites]


I still miss kozmo. Now that was a delivery service that was too awesome to survive.

I remember them. I could get a guy on a bike to go to a store, buy a Snickers bar and deliver it to my desk on the 34th floor (pre-9/11 security) all for zero service charge. Not sure what they thought their business model was, but they were out of business in less than three years. I assume Doordash and Grubhub will have similar fates.

I assume Amazon's ability to crawl out of the negative margin hole so well was the root of all this madness.
posted by rtimmel at 10:41 AM on May 18 [3 favorites]


Wow... they DELIVER weed in California? Here in Chicago/Illinois, recreational weed just became legal January 1st. Lines at the dispensaries were really crazy for the first couple months, so I stayed away. The exact day my wife and I decided to venture out to the local dispensary was the day they closed it to recreational and went medical-only due to Covid-19. We've been having supply issues here in Flyover.
posted by SoberHighland at 10:42 AM on May 18


Another way to look at it is that there are wealthy people with so much excess cash that they can't think of anything more productive to do with it than buy lottery tickets. Even though the lottery is a very bad investment.

Maciej "Pinboard" Cegłowski made some interesting points on Twitter about the so-called tech boom: now that Softbank were siphoning the billions of less well-grounded than average Saudi princes into Silicon Valley/the Bay Area, the whole economy is swamped with this cash, distorting it into what's essentially a planned economy, only planned not by the Party's central committee but by the whims of a handful of playboys. Which means that solving actual problems which don't get the backing of the aforementioned playboys is starved of resources, as all of the experts who are not working for charity are earning 6+-figure salaries working on dog-food delivery by drone moonshots or something equally stupid.

Though that's not entirely true; occasionally some offcuts from the aforementioned moonshots which end up as open-source projects on Github are reusable for useful purposes. Though getting a download-caching library or something is not much of a substitute for an economy which allows one to try solving problems without selling out to VCs and tilting at becoming a unicorn.
posted by acb at 10:42 AM on May 18 [7 favorites]


Wow... they DELIVER weed in California?

Look yall are finding it hard to believe that DoorDash would under price a pizza by a few bucks to get a few more orders in... I'm here to tell you I have personally and literally partaken in seeing venture capital go up in smoke.
posted by bradbane at 10:46 AM on May 18 [2 favorites]


Okay, so I kind of understand what's going on for mom-and-pop restaurants and small-ish independent restaurant businesses, but what's the deal with restaurant delivery apps working with the big fast food chains like McDonald's or Taco Bell?

Fast food profit margins are already kind of low, so that's why they try to do a high volume of sales. I can't imagine the delivery apps being able to make much on fees per order, or even the delivery apps being able to muscle a higher fee from the fast food giants.
posted by FJT at 10:47 AM on May 18 [1 favorite]


Fast food is high margin and the fast food companies are big enough to negotiate a more reasonable deal than your average mom and pop pizza place. Also, fast food has the infrastructure in place already because fast food has already solved the scale problem - drive thrus, 24 hour service, automated ordering, bare bones crews of minimum wage workers, identical menu items no matter where you are in the world, etc. Any increase in volume is profit for them, and it gives Uber Eats something to show at 3AM when all the real restaurants are closed.
posted by bradbane at 10:52 AM on May 18 [4 favorites]


He describes these apps as a great way for consumers to take investor money before it all collapses

I finished reading The Glass Hotel. It's a work of fiction, but based on Madoff's Ponzi scheme, and the effects from joining in on a criminal conspiracy from the sides of participants and victims.

Someone upthread commented that CDN $4.7M is owed to some restaurants and creditors, for instance.

Who pays the piper, in this scenario? If you're running a restaurant and did not get paid from these schemes, can you wait for courts to pay you out pennies on the dollar for food you made and had delivered some time in the distant past? How do you pay the bills with that?

While it sounds like this is sticking it to Doordash, my question is who really gets left being owed money and doesn't get it, when this pyramid scheme — or what looks like one — collapses and no more investor money comes in to pay off yesterday's bills.

My suspicion is that people who run legitimate businesses are not high on the list of those likely to get paid back, after these $16-for-$24 and other like schemes stop working.
posted by They sucked his brains out! at 10:53 AM on May 18 [3 favorites]


Any increase in volume is profit for them.

That makes sense, thanks. But another thing is this: Like, down the line, if it turns out you can make a tidy profit from delivery and that section of the business is growing, what makes the delivery apps think it will last? Wouldn't it be like a Netflix-vs-film-studios thing or Moviepass-vs-AMC thing, where it would better for McDonald's to attempt it's own delivery model and just try to cut out the restaurant delivery apps? I've seen that McD's has built it's own online ordering app (at least in the US) and it works fairly well.
posted by FJT at 11:00 AM on May 18


The question I keep asking is where is the money going exactly? It feels like everyone is losing out:

- Restaurants are getting squeezed with high commissions, marketing fees, being opted into discounts

- Delivery drivers are getting squeezed with low pay and shady practices if not outright tip stealing to the extent that some are working for, after expenses, perhaps zero dollars ("People in this line of work often discount wear-and- tear on their vehicles, but if we calculate the true costs of operating their vehicle based on the mileage reimbursement figure from the Internal Revenue Service (57.5 cents per mile) and the survey respondents’ estimated weekly mileage, as much as 20% might be earning nothing when all expenses are accounted for."

- Customers are getting squeezed with high delivery and service fees (adjusted by an endless stream of coupons and promotions and "subscribe to this monthly service to eliminate this fee but not that fee" deals) plus higher restaurant prices needed to pay for the commissions

- The companies themselves are hemorrhaging money: Uber Eats lost, and this is after adjustments, $461 million in one quarter.

So where did it all go? (sure, some employees and executives at the office are well-compensated, but not to an extent that explains this, and others like support and ops positions are not.) How does every single person in the chain feel like they're getting a terrible deal? Is it all just going to promotions and incentives (for customers, drivers, and restaurants) as these companies try to steal market share from each other in the hope that one of them is the last to survive?
posted by zachlipton at 11:28 AM on May 18 [4 favorites]


In Massachusetts, I don't know of any recreational pot dispensaries that deliver, but I did know of a few delivery services that bypass the legal dispensaries. I was surprised they continued in business after dispensaries went recreational as well as medical, but I guess it's still profitable for them. (I believe the delivery services in MA are hanging their legality on the fiction that they are delivering a free gift that comes with a hefty delivery charge, or that one is ordering an overpriced t-shirt that comes with a free gift.)
posted by rmd1023 at 11:33 AM on May 18 [1 favorite]


There are at least 4 locations in the store that have pepperoni; seemingly separated by brand. One version of baking supplies is in 1 aisle, there's another version in the natural foods area. This is why I shop at Aldi.
posted by EllaEm at 12:07 PM on May 18 [2 favorites]


Is it all just going to promotions and incentives (for customers, drivers, and restaurants) as these companies try to steal market share from each other in the hope that one of them is the last to survive?

Yes, the only meaningful endgame for Uber or Doordash is they form a monopoly and stop burning investor cash to 'disrupt' the market, instead effectively becoming the market and then charging end-users the real cost of a delivery or taxi, plus fees, at which point they print money for their investors. That's the goal, the question is whether a constant stream of useful idiots can be found to subsidize this process for long enough to actually work, or whether they'll flame out before they get there and collapse (or, I guess, a third option is to never get there but somehow keep finding suckers forever, which doesn't seem likely).
posted by axiom at 12:39 PM on May 18 [2 favorites]


We’re in NZ and have been using Click ‘n Collect since March. There are two small fixed fees tacked in: handling and paper bags. The market is making its usual margin and only recently expanded to include beer and wine. Perhaps with significantly fewer people in the store, some staff were redirected to shopper roles. I wouldn’t have minded paying a higher service charge on a sliding scale. At my usual store, they were pretty strict about distance between clients and collection staff, staff wore masks, and hand sanitiser mounted near the trolleys.
posted by lemon_icing at 12:48 PM on May 18 [1 favorite]


It should be nailed for goddamn fraud.

That's pretty much the model case for trademark infringement, no?

Way above:
What happens when the "disruptors" are disrupted?

The grift economy collapses.


And the grifters personally get their come-uppance by losing all their money? Oh yeah, of course not.
posted by ctmf at 12:59 PM on May 18 [1 favorite]


How does every single person in the chain feel like they're getting a terrible deal?

I'm certainly no economist, obviously, but I *think* it works like this.

I have a 1 man business making widgets which costs £9 in total, which I sell for £10 on my little crafted-widgets.co.uk website. Not great money, little scope for growth. But eh, I'm making a living without killing myself.

A VC sees my business, and decides it's ripe for 'innovation'. They offer to buy my widgets for £7, pay a same-day!!!!! delivery driver £1, take £4 themselves in fees, and charge customers £12. I would be crazy to accept this deal, but they have spent big money on google adverts etc and now nobody can find my site, because all the results end up at their shiny VC-widgets.com. And they promise me lots of new customers. And they've threatened a new pop-up factory (i.e. poorly paid contractors in their multi-family one-room 'flats') coming in soon which will produce many of said widgets cheaper than me so I better sign up now before they put me completely out of business.

So now, I'm losing £2 per widget (which I have to recoup by stiffing my suppliers, doing more hours and cutting corners to lower per-widget cost), the delivery driver at £1 is earning half what he used to make as a taxi driver but that job basically no longer exists, sweatshop makers make it for far less than the final selling price, customers pay £2 more than they used to and get shitty broken widgets half the time, but now can buy something they never knew they needed but all the adverts and social media insist they must have and at least it's convenient - AND the new company is spending £8 on advertising and discount vouchers and hosting etc to get that £4 fee to buy their way into the market. And of course, we no longer pay any taxes due to our big losses.

Everybody loses from trying to insert middlemen into a previously narrowly profitable business, and 'turbo charge it up' or 'disrupt' or 'innovate' or whatever the bullshit terms are these days.

But now VC-widgets.com is worth £100 billion because of the massive impressive growth in customers (and selling data of widget buyers on the side), and the VC sells it to a bunch of suckers investors who think they didn't get in on the ground floor, but if they get in now the stock price will still go much higher, and they can unload it to some other really big suckers late-stage investors before it all crashes under its own debt/labour practice lawsuits/pandemic crisis. Maybe some of the top execs in the new website get a bunch of money too.

Or they get a monopoly and now everyone buys only their widgets and they can raise prices massively (which is what the later investors think will happen)

Or - it all craters before then, and the VC loses their seed money, but they sneakily loaded up the new business with 'normal' debt and paid themselves off so don't actually lose that much (see retail store collapses), and also leave a bunch of suppliers i.e. me left owned a bunch of money too, and drivers, and customers who paid but don't get anything. All the delivery drivers move to the new 'disruptive' app offering £0.75 for punching themselves in the face on youtube, and I, now, bankrupt, join them...

In short, all that money is wasted on inefficiencies trying to do something that was never profitable at that scale in that way despite the misery and cost cutting inflicted on the sharp end, and most everybody gets screwed on the chance that a tiny handful of people (the original VCs et al) make a fuckton of money - and seeing that, now everybody with fuck-you money is looking for the next boring, stable, predictable but low-growth business to 'disrupt' and 'revolutionise' on the chance that they too, will get a massive pay day off making absolutely everything suck.
posted by Absolutely No You-Know-What at 1:22 PM on May 18 [24 favorites]


Delivery drivers are getting squeezed with low pay and shady practices if not outright tip stealing to the extent that some are working for, after expenses, perhaps zero dollars

Don't forget all the drivers who are working as gig-economy drivers literally to be able to use the (rented) car to get to their “day” jobs, with the middle-man pocketing all their driving income and threatening to kick them to the curb if they don't get in enough hours.

The Invisible Hand Of The Free Market finds efficiencies and exploits them.
posted by acb at 1:55 PM on May 18


My favourite innovation of the moment is being trialled in Melbourne. A Vietnamese franchise operation, Roll'd, has food trucks that they are sending out to locations when you order their food.

Instead of somebody on a bike, the food truck turns up and they cook your meal on the spot. I am hoping that the business model proves itself, as I can see me organising a Vietnamese night for the family on Monday, Mexican on Tuesday, ...

The owners are saying that they were inspired by memories of the Mr Whippy ice-cream van. Me - I am thinking whether a cocktail bar would work - funerals, weddings, etc
posted by Barbara Spitzer at 2:58 PM on May 18 [3 favorites]


Speaking of gig shoppers: does anyone understand why *this* is how grocery delivery gets done?

I used to have Safeway deliver my groceries. They guy came in a refrigerated truck. He was unionized.
And then one week they sent an email they'd be using gig workers for some routes. And lo, they did that on my route. A worker came, pulled some bags out of her back seat and delivered them. Nothing that was cold was in bags with ice etc.

So in my mind it was to safe money, and break the union a bit.
posted by 922257033c4a0f3cecdbd819a46d626999d1af4a at 3:23 PM on May 18 [3 favorites]


But now VC-widgets.com is worth £100 billion

Except it actually isn't, which is made obvious when market conditions or consumer trends change, forcing an exit of one variety or another.

Either an overheated IPO, if retail investors can be bullshitted into holding the bag, a PE fire sale in which most of the value is transferable IP or techincal "human capital" enticed to stay on in hopes their options will finally be worth something, or else just shuttering the operation.

I haven't checked in a bit, but as of February shares of Uber were worth less than they cost at IPO.
posted by snuffleupagus at 4:06 PM on May 18


So in my mind it was to safe money, and break the union a bit.

It also sheds a significant source of liability and overhead that is not within the core enterprise, while ostensibly still offering an "equivalent" service to the customer (i.e. close enough to shrug it off, and hoping that any dissatisfaction will be directed towards the delivery service rather than the store).

If markets were making more money and/or carrying less risk doing their own deliveries they wouldn't have stopped.

Smaller restaurants are clearly being bullied, but larger chains may be making the same calculus (either cheaper than doing it themselves; or they never were before, so whatever Grubhub brings in is gravy).
posted by snuffleupagus at 4:09 PM on May 18 [1 favorite]


There’s a bit on this in Matt Levine’s always great Money Stuff newsletter. He asks the same question that some have here: Why does it seem like everyone — the restaurant, the deliverer, the consumer, even the the money losing startup — is getting a bad deal?
In the new economy of user growth, you don’t have to worry about making a product that people want because you can just pay them to use it, so you might end up with companies losing money to give people things that they don’t want and driving out the things they do want.
posted by chrchr at 7:07 PM on May 18 [1 favorite]


I can't imagine the delivery apps being able to make much on fees per order, or even the delivery apps being able to muscle a higher fee from the fast food giants.

They don't. Also, your local McDonalds is almost certainly owned by an operator with like 5-10 stores, so not very "giant" in reality, although the mothership can actually make things worst, as I'll explain in a sec.

My siblings-in-law have 13 stores, so they are on the larger side. They fucking hate UberEats and rest of the other delivery things. Why? Because McDonalds fries taste like hell unless you start eating them as you drive away from the restaurant. Also, the margins are already pretty low, but corporate not only forces them to use the service (operators have some power in how to run the stores, but some things like $1 drinks, UberEats, and those $12k a pop order kiosk things are mandated by the mothership, even though they are pretty much universally loathed by the people who are forced to put them in the stores), but the prices are fixed so the operators can't even charge enough to make it worth while to them. I haven't talked to them about since shelter-in-place really started going, but in the olden days their UberEats orders pretty much just broken even, and no one (customer nor my in-laws) were happy about the experience.
posted by sideshow at 8:47 PM on May 18 [5 favorites]


Instead of somebody on a bike, the food truck turns up and they cook your meal on the spot.--Barbara Spitzer

That sounds like something out of The Fifth Element.
posted by eye of newt at 12:53 AM on May 19 [1 favorite]


Peapod, for all its faults, at least does all its stuff in house with workers that are decently paid and lets me tip 20% straight to the driver's pocket on top.

They were the only ones to do grocery deliveries right, here in Chicago. Then they bailed, immediately before the current crisis. "Mommy, what does "Love/Hate" mean?"
posted by Chitownfats at 1:17 AM on May 19


Instead of somebody on a bike, the food truck turns up and they cook your meal on the spot

Wasn't that the expensively failed Softbank startup with the mobile pizza ovens which bake as they drive to you (and which some were speculating could be reused as mobile crematoria if Covid-19 gets particularly bad)?
posted by acb at 5:22 AM on May 19 [1 favorite]


The food truck turns up and they cook your meal on the spot

Wouldn’t that add something like 10-40 minutes, plus gas, to the time it takes to make an order? How is this viable?
posted by STFUDonnie at 5:30 AM on May 19


It'd be wizard for an event. Have a family get together at someone's home but still get it catered with a phone call.
posted by Mitheral at 8:57 AM on May 19


And on cue: Why Do Food Delivery Companies Lose Money?. A decent overview, but the real insight is from this tweet: "One way to describe the past decade is to say that venture capitalists ran out of viable software services with global economies of scale, and instead of acknowledging the boom was over, they just applied the old investment model to physical services that don't scale the same way."
posted by Mr.Know-it-some at 11:33 AM on May 19 [9 favorites]


Way behind. Bear with me. (And, of course, feel free to ignore.)

STFUDonnie:

Is this true of ... stores like Target

In my experience, Target has way less of an idea what’s in stock than any grocery store.


Since all of this started, I get 90% of what I need just to live (not just food, but TP, paper towels, etc.) from HEB.

Y'all. It's such a stress reliever.

The other 10% I often have to go to 3 other regular grocery stores, as well as Target every now and again.

I am considered essential so am forced to physically show up on site. In the last ~10 weeks, I have never seen TP or paper towels at Target in the 4 or 5 visits I have had to stop on the way home. I'm actually shocked about how bad their supply chain is working for them. (Especially considering how awesome HEB is doing.)

*******
drivingmenuts:

Here in Texas, we have H-E-B, who apparently had a long-standing plan for this sort of pandemic nightmare, and is made of pure awesome.

As mentioned previously on the blue...

It's a really great story and as mentioned way above in my comment, HEB has been as close to spot-on perfect since everything started. The only thing I wish they would do is add pick-up to my closest location. I would rather not add an extra 40 minutes round trip just so I don't have to see idio people walking around not following necessary precautions.
posted by a non mouse, a cow herd at 6:12 PM on May 19


You Texans and your HEB talk is getting to be almost as annoying as the Canadians and their Canada.
posted by srboisvert at 7:13 PM on May 19 [3 favorites]


My siblings-in-law have 13 stores, so they are on the larger side. They fucking hate UberEats and rest of the other delivery things. Why? Because McDonalds fries taste like hell unless you start eating them as you drive away from the restaurant.

There's an interesting episode of Gastropod in which I learned that there had to be advances in fry science when drive-thrut was invented to get the fries to survive for 5 or 10 minutes from the drive-thru window to your table at home, and now there's ongoing research to make some sort of super fry that can survive the 45 minutes or so it takes to get things delivered.
posted by madcaptenor at 6:50 AM on May 20


Door Dash was either knowingly or unknowingly ready to give away thousands of dollars during a 'trial period' for a restaurant that never signed up to their service in order to present inflated numbers to sell the owner on a bum deal.

Knowingly. The BBC has picked this up now. Still, there doesn't seem to be any awareness in the article of quite how objectionable this is.

Last time I looked, pretending to represent a company you don't represent was a crime; so was selling goods or services that aren't yours to sell.
posted by Cardinal Fang at 7:21 AM on May 20 [2 favorites]


About the misrepresentation part and its criminality -- that goes to another aspect of this kind of capitalism, which we haven't touched on, namely flouting law, regulation and custom because it is likely that you can get away with it. Certainly the asymmetry in power and money between a cash-bloated startup and a small restaurant is such that likely the restaurant can't do anything meaningful about it, or it will get paid off as a cost of doing business by the parasites. They are not deterred by this any more than Uber has been swayed by employment and passenger transport regulations.
posted by i_am_joe's_spleen at 1:23 PM on May 20 [2 favorites]


Knowingly. The BBC has picked this up now. Still, there doesn't seem to be any awareness in the article of quite how objectionable this is.

Fuckin' lol:
Defending the loss, chief executive Masayoshi Son reportedly compared himself to Jesus.
posted by EndsOfInvention at 2:10 PM on May 20 [2 favorites]


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