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Comment by TeMPOraL | Hacker News Reader

I wonder how do those "free food" promotions make sense, business-wise. As this article shows, by doing such promotion you hit a completely different (and useless for you) clientbase - people just waiting for the promotions. This feel similar to the way most people seem to use Groupon - they're interested in using what's currently on big discount, and they won't be coming back to a place when it's on its regular pricing.

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Presumably, regular customers also react to these free offers. You always get your pizza from A, but because it's free you try B. Perhaps B think their pizzas are better. Perhaps B just offer you free pizzas long enough to break your habit with A, and your habit becomes B. Or you tend to stick with Italian, but because it's free you try Thai, and you find you like it. Businesses have many reasons for subsidising free promotions.

Mind you, I haven't done the math on this, and presumably neither have the participating restaurants. However, the logic is sound, and becomes even sounder if you treat a restaurant owner to a couple of glasses of wine.

I guess I fit this profile, only I have guilt about it. So if I do like it I will come back. I guess really it only helps get me back if it something I would do frequently enough to use the service. For example a deal to go to a hotel or massage I will probably only use once and not return, a deal for a restaurant I end up liking will get me back.

I'm not necessarily saying you're saying you should feel guilt about this; the companies invent many ways to screw you up, so I'd say that a small amount of exploiting the very rules they set up is in order. The point is, some of those promotional strategies have obvious problems which have already been demonstrated in the past, so I'm not sure why people keep implementing those strategies.

There is no need to feel guilt about this because companies do the exact opposite: they try to figure out the perfect breakpoint for €€€ per item per customer. Say your favorite pizza places does a few calculations and figures out that they can raise the price of their pizza by about €3 and actually make more money.. should they feel guilt?

That's not always the case though. I don't doubt that a proportion of people are just waiting for the promotions, but I'd be confident that others will become return customers – and in practice, it probably doesn't require that many return customers to offset the cost. I've definitely taken advantage of similar promotions and ended up purchasing products or starting subscriptions for that reason.

Many startups just chase having as much active users as possible. Uber has been losing money since day one

Right. Shame on me, I forgot they may be a startup, not a normal business. Startups like doing things like that, because majority of their money is disconnected from their sales.

I assume that the hope is to get a bunch of people to drop by, discovery they like the food and come back another day when it isn't free. No idea if that actually works, probably for some.

Probably they won't and will go away quickly -- as soon as someone turns this into a successful app that can hit a variety of sources.

There's a term for it. Its called "adverse selection".

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