Delivery is expensive. It's time-consuming, and customers are rarely willing to pay the true cost of it.
Most of the restaurant delivery services were bleeding hundreds of millions of dollars last year. They've had a resurgence because of the Covid-19 but that's a blip compared to a normal situation.
If people think it doesn't cost that much money to operate, then all restaurants shouldn't have a problem having their own delivery service.
If these businesses would grow more sustainably (i.e. slower), they wouldn't need such large sums of money to operate. They wouldn't over hire at sales / marketing / engineering / design / operations/ literally every role. In turn, they would be forced to set rates that can cover their actual costs while being a good business deal for restaurants, as they'd have to be around long enough for the delivery company to have any real growth.
There should be economies of scale wrt. a centralized delivery platform that services all kinds of restaurants. The fact that, say, Dominos has been offering delivery for _decades_ means that it's absolutely possible to have a sustainable national food delivery business on $8 medium pizza deals and $4 delivery charges. The tech delivery companies are just plain greedy: I surmise it's their quest for "f u" money that kills their business model right off the bat.
I agree that GrubHub, Doordash, and to some extent Uber seem bloated when considering the sum total of the markets they play in. That doesn't mean these business models aren't sustainable, though. Some companies allocate resources to a few areas that turn into profit centers, some don't. The ones that don't will be sold off or parted out. And the cycle will continue. I'd wager that one of these companies will survive and turn out to be a profitable, healthy business in the next few years. The rest will probably be sold off or slowly downsized.
More broadly, to your criticism of SV's investment strategy, resource allocation is a hard problem. If you want to direct large sums of capital at certain business verticals, do you want to grow slowly and steadily over a 20+ year period only to find that the economics don't work, or do you want to fail fast with some extra waste in the middle? Failing fast has some upside to it, though I understand why I consistently hear this criticism on this site. It feels like the last decade has seen the pendulum swing towards fast money and back a little. I don't think were as far off from a healthy middle ground as some might argue.
Maybe we'll eventually learn that artificially forcing business models to run at accelerated rates creates self-fulfilling prophecies of "fail fast."
The point is that from the perspective of investors, the survival of an individual startup is an irrelevant metric. What they're interested in is the profitability of the whole portfolio.
And so far, a 90% failure rate with <5% wild success is a profitable formula. As long as that remains true, they have no reason to change it.
The big profitable tech companies today didn’t raise billions in VC money.
Whether the numbers crept into the billions when the company was private or public is irrelevant. The point is that for a company to reach scale, they need billions in funding from somewhere.
Somebody has to take the risk, and all investors want returns for that risk. Public market growth investors want rapidly growing companies just as VC investors do.
The early companies like Apple and Microsoft were started with a few million not even a billion in today’s dollars. As I said earlier, Microsoft didn’t even need the later rounds of funding and wanted to bring expertise on board.
The only one of the current top tech companies that weren’t GAAP profitable at IPO is Amazon and even it used its own operating cash to fund growth.
> do you want to grow slowly and steadily over a 20+ year period only to find that the economics don't work, or do you want to fail fast with some extra waste in the middle
Seems highly dubious because you can take a perfectly fine business model and create an unattainable, doomed-to-fail situation out of it by subjecting it to unrealistic expectations, as we have seen in dozens of examples from the current bubble. Stress testing is not useful if it sets artificial pressures that destroys the business.
1. There are plenty of companies on the path to IPO that didn't take 1B+ in VC money 2. The "sharing" platforms are expensive investments because there are so many players fighting for market share.
We're talking about a strategy of fast growth vs slow and steady. All the companies we've mentioned so far invested in fast growth early on, whether from VC or reinvestment.
Amazon is the outlier when it comes to the lack of GAAP profitability for years, but even it was cash flow positive.
Every year, VC in the US _as a whole_ invests roughly 100B [2]. If you cut out non-growth and non-tech sectors I'd guess that number total goes to around 40B, and roughly 100B (very rough number) globally.
So yeah, some money gets "wasted" but it creates huge market capitalizations that are around two full orders of magnitude larger than a single years investment, and growing strong year over year.
[1] https://www.investopedia.com/terms/f/faang-stocks.asp [2] https://www.prnewswire.com/news-releases/us-venture-capital-...
Amazon - operates on thin to non existent profits for years but use much of its own money to grow through operating cash.
Apple - definitely didn’t raise billions in the 70s and was profitable at IPO.
Netflix - I don’t know much about Netflix.
Google - grew fast but it also had a profitable business.
Microsoft - famously, MS didn’t even need the VC money it got early on. It took the money because it wanted the expertise of the investors.
Besides discovery and virality, there is also the issue of falling transaction costs. When Google, Facebook and Amazon were founded, you had to maintain your own datacenters and infrastructure. That alone produced a massive barrier to entry that made competition less fierce. Since the advent of AWS and other cloud computing platforms, transactions costs for tech companies have dropped dramatically so you can't rely on infrastructure prowess as a competitive advantage for many tech verticals.
You simply can't compare companies that were born and matured in different markets with different dynamics to those founded in the past 10-15 years. It's apples and oranges.
Were Linkedin, Instagram, Beats by Dre, WhatsApp, Tableau, Skype, GitHub, MuleSoft all failures because they were acquired for billions, making lucrative paydays for their founders and investors?
Beats by Dre raised less than $1 billion in funding.
https://www.crunchbase.com/organization/beats-by-dr-dre
WhatsApp raised less than $70 million.
https://www.crunchbase.com/organization/whatsapp#section-ove...
From looking at Crunchbase, Instagram didn’t raise any outside funding.
None of the companies you listed raised anywhere near what Uber, Lyft and AirBnb raised.
https://www.joelonsoftware.com/2000/05/12/strategy-letter-i-...
[1] https://techcrunch.com/2020/04/09/starship-technologies-is-s...
I tend to agree, and also because I don't think food delivery can be easily decoupled from the preparation (for ready-to-eat orders). I mean, restaurants have done it profitably for ages, but whenever one of these SV companies tries it, I hear all kinds of stories about how, unless everything goes right, the whole process becomes tedious an frustrating.
Like, the order's wrong, and it has to restart through Uber's whole system. And the runners can't look inside to verify the order because (legitimate) health regulations. And it just ends with an unsatisfied customer who has some credit on the app.
But I do think there is a way to SV-ize food delivery, like if they could get economies of scale to work for food delivery. Imagine this:
A restaurant knows at least one customer needs their dish to start prep at 5:30pm. The website indicates they're starting one then anyway, so you get a discount for ordering the same food to start at the same time.
Meals can be batched easily -- it costs them much less than N times to scale up the order to N servings or customers.
Ditto for (in urban areas) delivering to the same building or block. If they only have to stop once, they can offer a discount to anyone ordering the same thing in the same building.
This is exactly the kind of thing where it pays to be a broad platform that everyone's on, and has kinds of monopoly profits, and provides legit consumer value.
(Disclaimer: I registered a domain name suitable for this kind of service but haven't otherwise advanced it.)
I was an Uber/Lyft driver, and I tried delivery a couple times way back before covid-19. One pickup was 5 identical, unlabeled containers, two of which were special orders. Having worked in restaurants before, there was no way in hell I wasn't going to visually check them (also I don't recall this being prohibited before). Turns out, one was wrong-- so the other 4 got cold while that one was re-made and I sat for 20 minutes. All told, it took me 45 minutes to bring mostly cold food to an unhappy person and I made about $4. Not. Sustainable.
It sounds like you have some good ideas and are thinking in the right direction, though. Streamlining your whole operation to minimize the possibility of errors and reduce wait times is one of the most important things to focus on in my book. Give people fewer choices.
A) Silicon Valley-style hyper growth
or
B) Slow and steady growth
Choice B is not actually an option if you want to change human behavior and actually benefit from economies of scale. This is because of the nature of competition and the power of habit. If it takes you 20 years to go national, then competitors will have cemented themselves in each region you try to operate.
And because humans are creatures of habit, it will be ridiculously expensive to get them to change their behavior even if you offer a comparatively better service.
But there's little or no economies of scale in the delivery business. A citywide delivery service would be equally efficient whether operated by a local company or a multinational. The local company may even have an advantage in terms of knowing their customers better. The only economy of scale I see is access to cheap VC capital.
Was it overall a living wage as a sole source of income? No, not at all. There was usually only a small window every day when people actually wanted delivery. Was it good money for the number of hours worked? Sixteen year-old me sure thought so!
Gross profit matters far more than profit margin. Also the best way to be profitable is to increase sales relative to fixed costs, rather than trying to squeeze every dime out of limited sales.
It's only the Silicon Valley delivery services that are unable to profit from delivery, because they insist on paying executives and engineers 6+ figures when all of the value is in the delivery drivers, not the wasteful overhead.
He should probably invest in his own online ordering system, they are not complex is should not cost that much.
personally I hate calling in orders, this holds true even if I am just picking it up, I prefer to use an Online order system.
That aside, at least part of the value of the aggregators is a lot of people apparently want to just go to one place and order from a variety of restaurants. Personally, I don't really get it--I just have menus from the very limited number of decent takeout options around where I live--but setting up your own site doesn't help with that.
Because the dude answering the phone has a non-zero probability of being completely stoned off his ass. This is not theoretical. I am sad that we didn't record the worst one we ever had--it would have made for the absolute best YouTube video even though everyone would have been saying "That's so fake."
Phone orders are very error prone. Online orders help both sides of the equation. The customer knows exactly what they are getting and can verify it; the restaurant can say "We're happy to comp you for X because we're nice people, BUT this is the receipt THAT YOU ACKNOWLEDGED saying what you actually ordered."
Because I have no desire to talk to anyone on the phone for any reason. if I could get a personal data device with out phone calling capabilities I would choose that. The POTS phone system needs to be relegated to the dust bin of history
The flip side of that as well, is often you can successfully up sell more items via an online system than you can with a phone order system. The number of times I have "add on" to my order due to the online system having options I did not even know was available is a lot higher than the normal "would you like to add" speech that the phone person gives you which is neither compelling and almost an automatic no as most people do not even pay attention to the offer
>if I'm just calling in to order a pizza or a sub.
The number of times Humans have got my order wrong when talking them over the phone is High... the number of times the computer has gotten my order wrong with submitting it electronic is almost zero
>I just have menus from the very limited number of decent takeout options around where I live--but setting up your own site doesn't help with that.
I would love to see your data on where you believe having having your own website with electronic menus do not help
Hell even outside of COVID, if a place does not have their menu online I will not even go to it physically, I like to look at the menu's and prices before even stepping foot in the place. Gives me a good idea on if I will like it or not.
It should be standard for a place to have an electronic menu with online take out ordering, anything less is subpar IMO
And if you want any other kind of food (or food from any higher end restaurant) delivered, you're SOL.
And higher-end restaurants generally don't deliver at all, on any delivery service* because the quality of the food can be diminished during transit. Some have made exceptions during the COVID19 lockdowns, and some have simply closed down for the duration.
I think it's more of an issue of the (ready-to-eat) food production and delivery being too highly coupled for a third party to bolt on a profitable service, as in my other comment:
It may turn out that the economics of the technology-middle-man aren't sustainable either. In which case they will have to decide between managing deliveries in-house or stopping deliveries.
This is how delivery used to work. The lie and promise of the startups trying to "disrupt" this is that it's somehow going to be better to proxy these interactions through a faceless megacorp rather than a small local business.
Well, is that really happening? If I use Uber Eats I get more expensive, worse service than calling my local place directly.
So maybe these delivery businesses shouldn't survive, at least not as currently envisioned, because they offer something that doesn't actually have that much value to most people.
I'm pretty sure I made more money and service was faster; the delivery fees would a lot cheaper (though hard to mentally adjust with inflation in mind though)
Like I'd just relax at the restaurant, chat with the other drivers/cooks/servers until 3-4 orders were up and head out.. it was pretty nice
Now instead of things being mostly locally owned it's all consolidated, impersonal (I got to know the managers, the owner, other workers, slower and much more expensive.
prices are also so high I can barely leave a 'great' tip
it's hard for me to think of the most of these delivery companies as anything but vultures that just ended up injecting themselves into a business and reduce the quality of some folks working lives
a big part of me wouldn't mind some economic upheaval just to undo our mistakes
A local burger place's burger has, I just worked out, 34,832,528,367,943,700 possible combinations. Some options are mututally exclusive, some add an extra charge. Etc.
I do love ordering via the internet without having to talk to people though... the best time I've ever seen this done was through a local VT pizza shop and the UI was pretty much just an HTML form and it was so incredibly easy to use.
Your argument seems to be that food middlemen should exist in some form, although you provide no reason; However, the existence and fetishization (for better or worse) of "local farmers markets" seems to point in the opposite direction.
My local pizza place delivers; there doesn't seem much room to create value to pay some engineer's salary and some VC profits a thousand miles away. Or rephrased, VCs and engineers are expensive, and their offerings can be undercut by every local restaurant in the country that has a phone and a teenager with a car, which is not exactly the strongest network effect or vendor lockin I've ever seen in a marketplace.
The delivery market seems to be of the form "We all need an offering in the market to stay competitive with everyone else losing money on every delivery".
The best possible exit for a delivery startup seems to be improving something in the already adequate infrastructure then pray Dominos Pizza acquires them.
The uphill battle is the main complaints people have about fast food is the cost is high, few choices, and the food is unhealthy. Nobody seems bothered by logistics problems like pizza taking a half hour to arrive or routes not being optimized to minimize gasoline consumption. Its true that customers are bad product designers, thinking of the anecdote of Ford's customers wanting a better horse, not a model T. However a business model of door to door horse feed delivery, logistics optimized by telegraphs in California, was also not a winner.
For consumers:
Ability to order from multiple restaurants through one consistent interface / payment flow. This cannot be undercut by every restaurant with a phone and a teenager with a car.
For restaurants:
A marketing / lead generation avenue that provides, ideally, incremental volume that is profitable. If it was not profitable, then they wouldn't do it, obviously.
Delivery itself, is just a method to deliver these value adds.
The argument can be made whether this value is worth a tech infrastructure and the human labor cost of delivery. It might be worth it in China, where delivery is actually more ubiquitous, but in America, where worker compensation / expectation / norms are higher, its debatable.
Would you say this about WeWork a year ago? VC-style central planning has had a great distorting effect on the supply/demand information function of the market.
I really wonder how much of this is a self-created problem. Would Uber really need that many engineers if it wasn't processing data at a massive scale to find the ideal surge price for every trip and maximize revenue? Maybe Uber would make less money without surge pricing (and the large scale data crunching it involves), but then maybe Uber also wouldn't need to pay for so many engineers.
Similarly, would Uber really need to pay for marketing if it attracted growth organically instead of trying to dominate the world within half a decade?
We live in rather strange time for business. It used to be that if you wanted to build a $100B company, you spent decades in the trenches, reinvesting profits and attracting growth organically.
Even a true "unicorn" (not that I care much for that term) like Microsoft was worth "only" $35B in 1995, 20 years after it was founded.
We've all somehow assumed that this order of things is natural when it is far from how the rest of the business world functions
It's part of the overfunding game: you can't just take the money and go "yay, 300 years of runtime because we stay lean". Investment is meant to be spent. Burning it all purely on buying market would also be a little too transparent, investors want to believe that they are getting more than that and they need others to believe that as well should they ever desire for greater fools.
But once you add an army of well paid talent to the mix it gets much easier to claim that there's more to your growth than buying market. Even if all they do is cosplay unassailable technological lead.
With traditional deliveries operating over a tiny radius back to base. Drivers can do multiple deliveries at the same time. Pick up a new stack of orders and quickly be out the door again, this means they need fewer people during rush and thus much lower overhead.
Some people are willing to pay 10+$ an order to have a much wider selection of restaurants from a huge area. But, that doesn’t scale to the kind of volume these companies expect.
Letting customers order from restaurants they already know is obviously a bit easier to scale.
1. Set a time. Say 11:00 or 12:00. The food will be delivered at this time, no other time.
2. Set a location, a little table in the lobby of various buildings where the Foodsby driver drops off the food.
3. One driver goes to the various restaurants, and goes to the various dropoff points. One trip at one time can serve hundreds of customers.
-------
Every foodsby trip is synchronized to the time. As such, all orders and deliveries are batched together, saving time and effort on all parties involved.
Usually not much, if anything. They keep the employees on the clock, and factor in labour cost much like a dine-in restaurant factors in the cost of your server.
For this reason, most mom-and-pop restaurants limit their delivery radius to places their delivery drivers can reach within 10 minutes or less of driving (so the driver can make at least 2 deliveries an hour).
I think that's the main problem. Delivery isn't free and so far has been subsidized by Uber's investors or draining the restaurants. Which didn't have a choice because they where being undercut.
We'll end up with either paying a reasonable price for delivery or picking it up yourself. Or maybe robots, but those aren't free either.
Around here most restaurants still use this kind of service (often hosted by some lowly webdev).
Any restaurant worth its salt is already tracking what its customers order (on an aggregate basis) because that's how they now what supplies to reorder and when.
Maybe when this price war ends normal delivery will be something much higher and they offer some kind of flash or pre-order pricing deals on clumped orders. Like $5 delivery for pre-ordering a pizza for that evening from this one restaurant so only one driver needs to go out there. Uber-Pool for your food if you will. Or you place your order at a higher price and if some more people hop onto the order from the same restaurant they cut your delivery price a bit.
Many already do and more are pivoting to delivering themselves. The delivery services are terrible and not worth their fees.
I agree Uber has other costs, and I'm not saying it should act like a charity and not recover those costs.
So whatever is uber's costs + profit needed, add it as a fee for using the app.
Eg: If I order a 2 large pizzas at my neighborhood pizza shop, and on their printed menu it is $40 (assume including taxes), I'd like to see the same price displayed to me. Uber can charge me processing fee and delivery fee of say $20 or $30 on top of this (to recover Uber's costs + profit).
Sadly, this is not what actually happens. Ordering the same item through delivery app, I see that each menu item is costing $1 to $5 more already (happens with Instacart too). On top of this I pay a processing fee and a delivery fee. In addition to this, the pizza shop guy pays 40%.
Obfuscating price at every step and then proclaiming to be a saviour of my neighborhood restaurants, is exactly what ticks me off.
Again, I'm not saying delivery apps should be charitable. I just want some transparency. The reason I go to a local pizza shop, (in addition to satiate hunger and enjoy tasty food) is to support the local economy.
Uber can charge the same total amount to me while providing the same service, provided they clearly show how much goes to Uber and how much goes to restaurant and delivery person.
Maybe it's not enough for "growth" and "engagement" and maintaining an engineering blog about their overengineered stack (I call those "engineering playgrounds") but guess what? None of those things benefit users.
Honestly I don't expect delivery services to survive, and I don't think it would be a tragedy if they ceased to exist.
If you want to create an echo chamber, this is how you do it.
>Most of the restaurant delivery services were bleeding hundreds of millions of dollars last year. They've had a resurgence because of the Covid-19 but that's a blip compared to a normal situation.
>If people think it doesn't cost that much money to operate, then all restaurants shouldn't have a problem having their own delivery service.
This is the comment I was responding to. Someone was discussing how much it costs to deliver and why people should be willing to pay more than 5% fees. And my comment that it's a luxury on top of a luxury is nothing more than an explanation of why people aren't willing to pay more.
>It's not very insightful to stick your nose in the air and loftily proclaim
Honestly I'm not sure why you took a comment calling food delivery a luxury so personally, I'm sorry it offended you.
Is it a "tragedy" if food delivery services cease to exist? Not to me personally, but it would be an inconvenience, and likely something much more serious to the people who work there and to those who drive for them. It's unlikely that those people appreciate being dismissed as unnecessary. In a capitalist society, the fact that they are a luxury doesn't have any bearing on whether they deserve to earn a living. I'm sure you indulge in more than a few luxuries yourself, just not this particular one, and that's OK.
(My comment was) nothing more than an explanation of why people aren't willing to pay more.
Except you went a bit further than that, didn't you?
Honestly I don't expect delivery services to survive, and I don't think it would be a tragedy if they ceased to exist.
You were probably downvoted for appearing insensitive. It happens. Take the 'L' and move on. I usually shoot for a long-term baseline of zero, myself, because I agree with your criticism that HN tends to sound like an echo chamber.
There must be unprofitable business activities that would make better jobs programs. Student stipends, vocational training, teachers aides for natives learning foreign languages, subsidized English language lessons, almost anything would be a better investment for immigrant men than subsidization of unprofitable delivery services. Arguably just handing out money and skipping the unprofitable business activity would cause less damage and waste to the environment.
Don't get me wrong. I've used and use these services at times. I'm not morally opposed to them. I just think that saying that telling someone by not using them they're hurting immigrants is just a whole lot of backwards.
Backwards? What's backwards about wanting to inform people of all the consequences to their actions? Life is messy and complicated. Far too often people don't want to think about all the consequences to their actions so they can erase that complexity.
As an aside, not all of these companies are Silicon Valley-based anyway. SkipTheDishes, the one I use, is a Canadian company.
At some point we need to fix societal issues instead of worrying that not consuming goods or services is harmful.
We used to be pretty exclusive seamless users in my house until we got a letter in one of our bags that roughly read:
"thank you for your order. Especially with the decrease in volume during these times of crisis, the grubhub commission makes it hard for us to stay in business. please consider ordering direct to support your neighborhood."
Since then (near the beginning of the COVID shelter in place order), we've ordered with the telephone or custom solutions every time. And we've noticed a difference: delivery times are literally half of what they were before.
It's interesting to see the `shopify`-ing of restaurants in our area: instead of going through the big platform of Seamless etc., they're using platforms that appear to be more like shopify/stripe (decentralized, meager commissions, no high-traffic "discovery" platform). Some of our favorite restaurants have even left Seamless/etc, because they're literally losing money on orders fulfilled there.
For example, a famous pizzeria nearby used to never offer delivery, but recently started offering delivery, with online ordering powered by https://pos.toasttab.com/products/online-ordering.
I don't know if all of this commotion will be enough to unseat the seamless/grubhub/postmates of the world, but I honestly hope it does. Restaurants are a tough enough business as it is, and the steep commission rates have been converting mom & pop places into sweatshops. :/
..but then when we started trying to call or order directly through restaurants, we kept getting turned away and told to order through one of the apps. It seems many (most?) restaurants aren't in a position to take orders over the phone or directly through their website, even for pickup.
[0]: https://ny.eater.com/2020/4/23/21231943/grubhub-nyc-phone-or...
>>I'll tip cash to make up for what Uber Eats takes from the restaurant
So you've just allowed Uber Eats to operate another day, because the restaurant can now justify using them and their shitty rates.
My understanding is that Uber Eats loses money on each order. Has that changed? If so, I'll stop using them immediately and perform discovery in another way ("Restaurant Roulette"). I want my money going to the folks doing the hard work, not scalpers ("the platform").
Going to keep tipping though, not tipping doesn't fix bigger issues causing the need for it that are out of scope here. Sorry if my economic empathy bothers you (no snark intended).
Also, I'm from the UK - while tipping in restaurants is semi-common(not expected), tipping delivery drivers is literally unheard of. Doesn't exist, no one does it. And yet.....somehow, delivery drivers still exist as a profession.
My point is - every time you tip, you allow shitty employment practices to continue. It's the same as giving money to beggars on the street - they continue begging because they know it works, it's a self sustaining circle.
Now, I'm not saying I like that, in fact I hate it. We are in essence subsidizing their employees. It definitely needs to change but please don't encourage people not to tip. There are realistic ways to get rid of tipping. Just stopping tipping isn't one of them. All your doing is hurting the little man/women. Also comparing them to beggars is pretty out of touch.
Do you have a source?
Also, having a delivery option I'm pretty sure provides additional business (on top of just having dine-in / pick up). So, for a restaurant to hire employees and building out a delivery service themselves will be much more hassle and probably will be more expensive than using a service like doordash / uber eats.
Lastly, this is driving a trend towards the so-called "cloud kitchens" letting restaurants operate with a subset of staff in cheaper to rent places and charging effectively what a regular restaurant would for a meal.
The restaurants are going through a paradigm shift now, and it will only be accelerated due to COVID - Cloud kitchens can be more sanitary / safer to order from than regular dine-in restaurants for instance but I don't really feel sorry for them. If anything, the drivers doing the delivery are the ones getting shafted here and barely making any money. If folks start tipping, it will simply mean that Uber can afford to pay drivers less - the amount a driver makes won't change very significantly.
Overall I'm convinced eats is the future and Uber focusing on ride share + eats + self driving (existential threat if someone else does it cheaper / better) is the right way to go for the company.
Not to mention that they are saving on labor and rent costs on delivery orders by not having to pay additional wait staff, get a bigger space more more tables etc.
Except business models that were takeout/delivery from the start usually had their own delivery drivers. The apps were marketed at restaurants that typically were full-service but didn't have delivery staff.
These exhibited the same failure modes as UberEats, et al., namely that your food is cold by the time it gets there.
Delivery works when it's local and immediate--period.
Doesn't Apple already grab 30% of the in-app payment?
That's setting aside the ridiculousness of all of the one-off trips I see in my building and my neighborhood, burning gasoline to hand-deliver a sandwich.
I'm sure there's no end to the things you don't understand.
> For those occasions where I feel lazy enough to have a pizza or Chinese food delivered instead of walking or driving to pick it up, I don't want a middleman company contracting the job out to some random person.
You may be surprised to know there are people in different situations than yourself.
* What if I want something besides pizza or Chinese food?
* What if I don't have a car?
* What if restaurants are too far to walk?
* What if I'm unable to walk?
* What if I have small children that I can't bring with me and can't leave behind?
* What if I have something important going on and can't take time to go get food?
* What if I don't want to call them on the phone? What if I have anxiety or can't speak?
* What if I don't know what kind of food I want, and would like to browse options?
* What if I'm new/don't know the area?
> How many layers of profit-taking do people think is acceptable to have random people touching their food along the way?
So you're ok with the food preparer and other employees, and the restaurant's delivery person "touching" your food, but not a 3rd party delivery person. Anyway, the delivery bag is typically sealed when ordered through these services.
Maybe if you thought about it for 5 seconds, you could understand why these services are so popular.
The fact that it is fast food is what surprises me. There's so little value added for so much money. I'm sure it appeals to other people. I ride elevators with Uber Eats drivers delivering a Subway sandwich. That's a ridiculous investment for such a terrible meal.
To avoid that group, I suppose you have to cook all your food yourself?
As a society, we take on different specializations and, as a result, increase overall efficiency. No reason to call this specialization out as something that only serves the "lazy".
The appeal was that these services would work with almost any restaurant that had takeout but not delivery.
Personally, if I were a restaurant, I would use these services to gauge how much interest my clients have in delivery. Once I pass a certain threshold or during peak times, I would hire my own drivers and do my own delivery while cutting out the SillyVally VC backed services.
11:37 PM on Tuesday--sure, Uber gets that one, LOL. Peak Friday from 5:00PM to 10:00PM--I'll have my own drivers for that timeslice, thanks.
I think one point I failed to make is that I'm astounded that restaurants are outsourcing such an important role on the higher end. But at least it makes sense on the higher end.
On the lower end (hand-delivering a Subway sandwich) it is just a clear sign of VC cash being set on fire.
I'm still not going to have random middlemen hand-deliver terrible fast food for me.
When we have truly driverless cars and robots delivering food it will make sense to me. Until then, it's just an artifact of there being too much VC cash needing to be burned intersecting with laziness.
I have 2 small kids. From my perspective, it actually makes less sense to use an app for delivery because having kids often implies also having a car (in north america, anyways). So driving down to the restaurant for pickup costs considerably less than using the delivery option.
I'll still use the app though for the same reason Uber originally became popular: there's no need to call or talk to anyone, and there's no need to fumble with physical currency for payment; you just tap a few buttons, drive to the store, pick up your food and go.
Probably I'm not like most app users are. If I know a few different types of restaurants in the area, and I know specific items I like there, I'll just order the same thing again and again until I move elsewhere.
If I wanted a new place, new dish every time, probably Delivery apps would be a good way to discover
https://www.forbes.com/sites/garystern/2019/08/14/slice-help...
I hope Slice wins. Their business model is still vulnerable to credit card chargebacks, but they let the restaurant handle delivery and pickup, which is why they might be able to afford taking less of a cut. I can't say Slice's business model will work, but I can pretty much guarantee that taking a 5% cut won't work. Slice also probably needs to pass on credit card processing fees (at least 3%) for any transaction they handle in addition to their flat fee in order for it to work. They provide an option of paying in cash though.
Thanx also seems like it might be good. I interviewed as part of interviewing at five companies in five days at TripleByte. That was a surreal experience. I had lived in SF for three and a half years, and had only been gone from SF for two months when they flew me back to SF and I stayed at Hotel Whitcomb. Never had I stayed so close to City Hall when I lived in SF. At the time Thanx was mostly about rewards. I saw them come up when I ordered from a burger place called PINCHO in Coral Gables, which is adjacent to Miami where I live now. It seems like an ideal pivot. Like Slice, it had very good UX.
also $1.95 doesn't include the costs of delivery (delivery is handled by pizza shops' existing delivery drivers)
the only answer I can think of is that they don't want the customer to realize the true cost of delivery.
It’s very inefficient unless your goal is to optimize for quickest delivery and hottest food, which is what it is. However, there is one major efficiency it has over the restaurants paying for their own delivery drivers is that SkipTheDishes has a large pool of drivers to dispatch orders to from all of the restaurants. It’s like having a thread pool you can dispatch jobs to rather than having dedicated threads allocated to each work queue (which may end up idle a lot of the time).
Another thing you have to consider is that the drivers need to earn a living. If they only get one or two orders a night and spend the rest of their time waiting around then they can’t afford to do the job so they’ll probably quit. These delivery services ensure that drivers will have a busy shift because their scheduling systems don’t overbook drivers. That all goes out the window if you ask every restaurant to hire their own drivers.
It feels quite condescending that you think you need to protect restaurants from Uber when restaurants are already capable of dissociating from Uber. You're essentially saying restaurant owners are too dumb to know what's best for them, so you need to make decisions for them.
And to make a more general remark: the free market doesn't always have the desired effect. See for example Net Neutrality which wouldn't exist if the free market had its way.
Huh that surprises me. Here in the UK the big food outlets have gone on a big hiring spree to keep up with the extra demand from people all eating at home.
Canada is showering it's unemployed citizens with something similar to $2000 per month unemployment benefits.
That's $12.5 per hr for not working, while (minimum wage in Ontario) is $14 per hr.
Why would anyone work to get $1.5 per hr extra? When you can stay home and get the free money? (in fact other provinces, $12.5 per hr is above minimum wage).
Having something like this for a month or two was probably fine, but right now Canada is paying it's residents to not work while grocery stores / warehouses are not finding enough workers.
I was tilting positive of UBI until I saw the effects of this $2K per month scheme in Canada.
To immediately solve the problem, Canada can continue giving $2K per month to those who are unemployed, but working in a necessary occupation (say grocery stores, deliveries, warehouses) wouldn't disqualify them from getting the $2K, with a caveat that there's no minimum wage. At that point it's a two sided bidding with grocery stores going lower and workers increasing their bids. At some rate (say $5 per hr or $10 per hr) there's a right balance for supply/demand of labor.
Delivery is only option, I suspect delivery people are making a killing now.
no one has cracked the core logistics problem involving time or cost, which is the real hump. i can literally order a pizza, walk to the store to pick it up, and return in less time than a delivery service can deliver, and i've saved all that overhead cost and it's warmer/fresher to boot. even moreso with groceries. granted, i'm in a city, but the gambit of delivery is that the city is the real shizzle for delivery.
until the logistics problem is solved, it makes little sense to use a delivery app for more than as an occasional novelty or treat.
but "now" is contextual. empty time between desire and fulfillment is dreadful, to be avoided. waiting for delivery still burns background brain cycles keeping tabs on it (not to mention how much harder it is to decide and order via an app) and therefore isn't a pancea in itself. this is especially true when you want to put those otherwise wasted cycles to work on something more important.
if you go to pick it up, you're making progress toward the goal, and "now" stretches out along that task. it feels somewhat like you're getting food "now", even 30 minutes later. you don't feel that same sense of waste. but if you're already wasting time (like watching tv), then the strain of waiting isn't nearly as consequential or burdensome.
in any case, if i lived in a more suburban area, i'd still likely rather drive and pick up the food (as we did growing up) than get it delivered. it's still often faster, fresher, and cheaper than delivery apps, and you don't have the parking issues that can make pickup harder in urban areas.
I think the app only covers NYC for now.
Does the calvin in the username refer to calvin and hobbes?
My office is huge into Ritual, it was used daily. The group ordering makes it way easier than "grab me a burger and I'll Venmo you". You can fully customize your own order without bothering your teammate with "no pickles, extra cheese please". You then pay on your own, so no one has to keep track of splitting bills and IOUs. A small bonus is that each individual order is packaged separately and clearly labelled so that you don't have to fish out items and work out whose is whose.
You can definitely achieve the same thing without Ritual, but the app takes care of all the pain points and pays you in rewards to use it, so why not?
Here in Toronto area, most of the big food outlets are closed, because they are not able to get workers.
The ones that are open, are these mom&pop restaurants, that run on a skeletal workforce.
So with fewer restaurants operating, and delivery apps having a limited radius for delivery, I'd rather go and get the order myself, and let the neighborhood restaurer keep more of the money I give instead of losing 30%-40% of the amount as commission (I tip on top of it even though it's a pickup).
I'll use delivery apps only if: - They charge the restaurant less than 5% total fees - They charge me 5% - 10% for delivery and processing fees whatever (lets say a minimum of $5 or $10, whichever is higher).
Problem is at this rate, Uber Eats or Door Dash or GrubHub wont survive.
I understand using these apps is more of a necessity if you have kids and larger number of people at home. But this is not for me.
Uber drivers who got cars on subprime loans cannot survive with deliveries only. I'm curious to how they'll get through this storm. At least in this case, Uber has fewer liabilities (all head ache borne by the driver).