Pizza delivery drivers have been getting the same bad deal for a long time. Most teenagers/young adults who take a delivery job have no idea that they require additional coverage on their vehicle and are one accident away from a lot of financial hardship.
You just see/hear about it much more now because rather than a small business offering the bad deal it's a (multi)national company. VC is just providing a way to scale the pain's visibility up.
With these services, it's like as though people somehow expect gig-work - already much less certain than being an employed drivers - to be a career. License and insurance requirements, PPE, and the sheer scale of the middleman operation involved in running a huge app like this - it's nuts to think that it could be done for the same price as the conventional delivery model.
Sure... until an accident happens, you find out that your insurance didn't cover the (undeclared) use for business purposes, and you're liable for somebody's million-dollar medical bills.
I'd bet money that the insurance company is still on the hook to cover it, but they'll be super quick to drop you.
Not so sure about someone getting saddled with someone elses medical bills.
Just don’t drink and drive.
Gas was $1/gallon and we got 70¢ per delivery. I asked a friend about 2008 or so, when gas had gotten up to almost $5/gallon briefly (part of the cause of the Great Recession, I'd imagine), and he said they were still getting 70¢ per run. That sucks.
Also, only 1/10 orders used credit cards, so nobody paid taxes on tips - all cash. By 2008, I'm guessing it was 1/3 using credit, and now, with apps, it's probably 9/10 using cards.
But yeah, it was a sweet gig if you weren't the social / beautiful type to be a successful waiter or waitress / bartender. It paid more and was way more fun than making $6-$8 / hour at McDonalds or Target.
Ehh, I had a bachelor's degree and did tech support for a fortune 500 company, and I was earning half what my friend made as a pizza delivery driver.
s/Pizza delivery drivers/everyone
After talking to several gig economy workers, and many of them understand in very concrete terms that they are trading the value their vehicle for cash now. It's a logical short-term choice when they have bills that need to be paid today, and have a vehicle they can stretch out for a few years.
In some countries it is even illegal.
Can you explain why this should not be viewed as anti-competitive behavior? How would you call it if it's not predatory pricing/undercutting?
1. above the competition - gouging, profiteering
2. below the competition - predatory pricing, unfair competition, dumping
3. same as the competition - price fixing, collusion
All are illegal!
- if a market player wants to sell goods or services at a loss, let them do it and it benefits the consumer
- if the competition goes out of business and the prices are raised, somebody else will see the opportunity to enter the market at a lower cost.
Rinse and repeat. The consumers benefit from it either way.
Comparison: when a new restaurant opens, it's very common to hand out coupons in the neighborhood for discounts or free meals. Those free meals will be sold at a loss, with the goal of building a customer base. Think of it as marketing.
EOD, "anti-competitive" is evaluated on the outcome -- does the success of the company running the discounts make the market more or less competitive if they succeed? If a company is already the dominant player in a market, it's anti-competitive to price dump to keep new entrants out.
But if the company is new and trying to disrupt established players (or trying to create a market where one didn't exist), it's very hard to argue that there's less competition due to their success.
This doesn't seem right. If they are price dumping then it will immediately affect the competition. No need to wait for an outcome or interpretation.
> Comparison: when a new restaurant opens, it's very common to hand out coupons in the neighborhood for discounts or free meals.
I'd say this is only acceptable because it is small scale (only few restaurants fit in a neighborhood) and the amount of money isn't endless like it (often) is with VC money. The short duration makes it possible for the competition to overcome the negative effects.
The problem with VC money is that all too often it is used to destroy competition and build monopolies.
Case history, please.
So, it's commonplace but no case histories.
Microsoft - not a VC funded company. NFL - government sanctioned monopoly, also not a VC funded company
Now, as to OS/2, people say "poor IBM", but IBM was the monopolist boogeyman in the 70's and 80's. BEOS simply wasn't good enough. Apple OS's and Linux did and continue to do quite well.
The DOJ went after Microsoft for giving away Explorer for free, which is what every browser maker does now, and has for 20 years. How that's bad for consumers I have no idea. As for Netscape, I switched from Netscape to Explorer because Netscape crashed constantly. That was hardly anti-competitive behavior on Microsoft's part, it was bad engineering on Netscape's.
Yes, I know IE crashed too, but nowhere near as often as Netscape.
I also give away the Digital Mars C and C++ compilers, the D compiler, and the source code to all of it. Is that anti-competitive too? How about all the other free software I use every day? Should the DOJ go after their creators, too?
This unpaid and untaxed emotional labor has to stop!
We need rules and regulations for society to work!
they are taking the risk of offering free services in the hope that you will stay around and keep using the service. if you dont, they are at a loss.
Purposefully creating price wars by undercutting competitors is a different story.
But selling below total cost can just be a way to get infrastructure in place before market share is in place (if it ever does happen).
Subsidized not only by VCs, but also by gig economy workers who genuinely don’t understand how little they’re being paid because their liabilities are complicated and often hidden/deferred.
This seems to happen a lot especially with food service startups, because of how price-sensitive that market is. Selling anything below cost or undercutting the competition by even a little bit in that industry will give you exponential growth for as long as you can sustain it, but the instant you want to turn a profit the market will turn their back on you and go somewhere else.