Comment by sytelus | Hacker News Reader

Comment by sytelus | Hacker News Reader

There are two fundamental issues in food delivery business:

1. Per hour cost of a delivery person is usually $20 after taking in to account vehicle, gas, down times etc. If you assume each delivery takes minimum of 20 mins (accounting for restaurant-customer-return hops), we are talking average of $6+ per delivery. Considering a cost of a meal is usually $10-20, this is significant barrier. My question is: Does these startups taking on losses to build customer base?

2. Cooked food is notoriously perishable. Think about eating burger lying around for 30-60 mins before you eat. This not only limits items you can deliver but also puts on pressure that you are always running against clock. One mistake and you are bound to lose a customer for factors not in your control.

So, food delivery idea is not new. It had been tried and failed to takeoff probably couple of dozen times mainly due to above two issues. What really has changed now to mitigate these two issues?

Fundamentals still the same from the Spoonrocket days. $15/hr to pay the drivers. 3 to 5 trips an hour. Avg ticket is $16, and the platforms (P, U, D) take a third.

What's changed?

Consumers changed. People are paying $6 for delivery. They've grown accustomed to room service.

No one's taking 60+ min for food delivery.

What's next is taking India's lead and integrating ordering, prep, delivery all in one.

The one thing that hasn't changed is that not all food is as good delivered as in the restaurant. For example anything fried or that should be crispy.

In my experience that food tends to absorb the moisture from the heat/steam it emits which gets trapped by the packaging and therefore makes it soggy.

I believe this will be solved by science in the packaging.

For basics, there could be hot/cold pads at certain places in the packaging to condense the steam away from the food.

For advanced stuff, you could imagine certain parts of the meal actually being cooked on-route. For example, imagine a raw steak being shipped with two hot metal plates which spring onto the steak 3 minutes from delivery. As you open the package, the steak is still sizzling!

I get food from UberEats and DoorDash that are still hot to the touch. I’ve had some food that I had to cool down. This is in stark difference from delivery in the 90s (the last time I got delivered food). I’m very willing to pay extra for this and not have to pay tip to the restaurant.

You don't pay tip for delivery? Good to know, I guess I will only order deliveries when I got to the US becaude I refuse to tip and I understand it won't be a valid option at a restaurant.

you most definitely should tip the delivery drivers. The delivery fees dont usually go towards them. Uber typically takes 35% of the bill from restaurants. The "delivery fee" is usually to help cover that. Not tipping the driver is just screwing the driver. Unfortunately, tipping is expected so not doing it wont change anything and you just hurt the little guy

> we are talking average of $6+ per delivery. Considering a cost of a meal is usually $10-20, this is significant barrier

I don't understand. Why does the value of the thing being delivered make a difference to the value of the fact that it's delivered?

Should we expect it to cost more to deliver a more expensive item? I don't see why. Why should it cost less to deliver a less expensive item.

You are correct that the value of the delivery does not change with the cost of the item. As a cost impact, it makes sense to instead compare to the time and cost of traveling myself to get the item.

But the OPs point is valid if you think about the impact to your budget. Saying a meal delivered represents a 50% markup in your food entertainment budget is a legit consideration. Were we talking about a 5% or 10% impact to the budget it would less dramatic.

In an urban area, there's two related costs; money and time. Depending on where you're trying to go and how to get there it can be a lot. Not everybody can afford the time to go out, and throw in parking a car in there and you can easily waste way too much time trying to get food. And that's assuming you can even find free parking.

That's how human psychology works, and it's not always logical: we're willing to pay up to a certain percentage for delivery, when it becomes 50% or 100% of the price of the product the consumer would rather give up.

In a similar ways there was a study a few years ago that showed that people would be fine driving a longer distance to save $10 on something that's usually worth $30, but they won't bother to save the same $10 on something that's worth several hundreds.

Average order is closer to $20.

Uber then takes up to 30% cut on the food cost.

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