by asaramis on 11/17/20, 5:05 AM with 118 comments
by lacker on 11/17/20, 7:35 AM
This is not a genuine partnership, it’s extractive.
Is DoorDash extracting money from its users, the restaurants and the delivery drivers? Or is it actually providing something of value?
To me, the delivery apps like DoorDash and Uber Eats just work a lot better than calling up restaurants for delivery did in the pre-app era. Maybe the drivers are underpaid, maybe the restaurants are underpaid, maybe the food costs too much, but even if they end up charging more money, are they really going to go away like Groupon did? I don't think so, the underlying product is just too valuable. So, I don't agree with this claim. There's a real partnership here. It just hasn't settled down.
As long as the business space is real, DoorDash and Uber Eats and the others are just going to fight tooth and claw to win it. That means discounting the real price, that means raising money at whatever valuation they can get, that means turning the screws on all partners to squeeze out more money. All of this seems like craziness, and it is, but it's craziness in pursuit of winning a prize that really does exist.
Some industries, like the music industry, once they settle down it turns out that one of the players has very little pricing power. I think that might happen here for drivers and for the sort of restaurant that isn't differentiated. But like music, it won't just go away, it'll be a new business structure that perhaps dominates the industry.
by fxtentacle on 11/17/20, 11:10 AM
In my area, there's a pizza shop that is doing well. They also sell on Takeaway.com. But if you order through that - like I initially did - they'll give you a small business card that says "Did you know that our prices on Takeaway.com are 15% higher to compensate for the fees that they charge us?" And on the back of the business card is their URL for ordering and their own phone number. I now always order directly from them and the service is insanely better than the best I ever got from Takeaway.com. Their long-term delivery employees will actually remember how to find my house on the 1st try while the Pizza is still hot. I've never ever had a <30 minute delivery from Takeaway.com. But those pizza guys reliably hit 20 minutes if I order directly from them.
So yes, the restaurant that I know that does best on online delivery platforms is the one that treats it like an expensive advertisement channel and that funnels customers off the platform as fast as they can.
DoorDash's biggest risk is that one of their "partners" might become successful enough to leave.
by techsupporter on 11/17/20, 7:47 AM
To use a meme, "por que no los dos?"
I hate both the player and the game. No one ordered Mr Xu to get into this business; there's no requirement that he abuse the living shit out of his workers and sell them up the river by helping pass prop 22. At every step in the decision process, he or people he hired and gave instructions to voluntarily made these decisions. From the pay scale to the inclusion of binding arbitration, they own every single one of those choices.
Along the same lines, we own not making the changes we claim to want, while wolfing down our ghost kitchen burritos with subsidized delivery. California voters absolutely own voting for proposition 22, and signing the petition to get it on the ballot. We're not reforming our labor laws to give some people the flexibility they want while not leaving everyone as an unrestricted free agent. We don't separate health care from employment. We gab about it, but little changes, and certainly not at the rate of the people exploiting those pressure points. As someone once told Captain Picard, "you talk and you talk, but you have no guramba."
And now, with COVID, we're watching our economy cleave into the starkest case of haves and have-nots in my lifetime. That split won't be permanent, but fixing it is going to happen when we least expect it and is going to be messy and painful.
by Pfhreak on 11/17/20, 7:18 AM
There's a clear imbalance of power there -- it costs the customer nothing to not tip or to leave a one star review. But those things could absolutely impact someone's earning potential as a worker.
Consider how many people seemingly enjoy being petty tyrants when given the opportunity, and the story gets worse and worse for the worker.
I always recommend that people always give five stars and a generous tip (until we outlaw typing). It's not my job to narc on your workers, Uber.
by granzymes on 11/17/20, 6:07 AM
There are a lot of issues with this newsletter, but this bit at the end stuck out. The 'loophole' is for companies with
- total annual gross revenues less than $1.07 billion and
- less than $1 billion in non-convertible debt in the past three years and
- not a “large accelerated filer,” as defined in Exchange Act Rule 12b-2
The newsletter is trying to make this sound like it was meant for mom-and-pop shops, but how on earth can you have revenues of more than $1.07 billion without being a "multibillion-dollar" company?
by baybal2 on 11/17/20, 7:00 AM
Yandex, which never felt to such idiocy, then scooped their remaining business for a symbolic sum.
by mdorazio on 11/17/20, 3:25 PM
This is an excellent encapsulation of most of the gig economy in one sentence and explains why I hate the entire thing. It's only a valid business model by taking advantage of people and sidestepping regulations, all funded by VC money rather than actual profits.
by JohnJamesRambo on 11/17/20, 6:54 AM
The previous article should be required reading for anyone trying to understand how crazy this era is.
by mathattack on 11/17/20, 12:50 PM
1 - Voters voted Prop 22 in their own self interest. It keeps prices lower. Similar to voters who vote for lower property taxes. (May harm others but not the voters)
2 - I deleted the app because the times not reliable. This is what will hurt them more than ballots.
by boringg on 11/17/20, 4:22 PM
However there is no other easy way to buy food without doing significant amount of research and then most of these companies are reliant on the online ordering for inbound sales anyways. It's a total cluster.
Probably a downvote here but I don't feel good making investment money on an extractive business like this - i.e. I'm not going to buy stock. Even though these services are lifelines during the pandemic, I wonder if they are a faustian bargain of sorts in the long-run understanding full well that in the short-run the alternative is to shutdown.
The sad future: I think the executives and staff will make off and the retail investors will be holding the bag as well as the shutdown restaurants and employees laid off.
The happy future: Some/most restaurants survive pandemic and ease off their online habits, stock stabilizes/investors take a hit and people go back into restaurants. Online delivery services companies market caps take a nose dive.
by paulus_magnus2 on 11/17/20, 4:36 PM
Wishing for self-driving cars is easy, building them not so much. But Pizza delivery unicorn based on some arbitrage?? Come on, at least develop a fleet of food trucks in which the pizza is cooked along the way. Baking a Pizza takes 6mins, add 2-3 for preparation so the order can be prepared along the way. No need to get back to the restaurant. This gives you 2x efficiency of the delivery person ($15/h). Equipping a restaurant is probably $200k+, a food truck closer to $50k which gives 4x capex efficiency. Perhaps in the future the pizza can be made by a robot saving you one person (50%) of the personnel. There is room for efficiency.
Here in Europe during Lockdown take away pizza was €2 cheaper, around €8 instead of €12+. I cannot imagine how someone selling it cheaper is anything but a pyramid scheme / attempt to corner the market.
by randrews543 on 11/17/20, 2:08 PM
by aaisola on 11/17/20, 4:17 PM
by ada1981 on 11/17/20, 11:04 PM
They are out to extract market share from folks with less information, primarily drivers and owners.
by ronika1224 on 11/17/20, 5:23 AM