Uber is laying off 3,700, as rides plummet due to Covid-19
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I initially thought it would be higher due to people isolating and now shopping, but a lot of people now have less disposable income to spend on expensive food delivery. Also less availability (restaurants closing down)
For many restaurants this is the only income they have and it's highly encouraged to order some.
Not many people have gone down in disposable income, though. That might be a factor.
So basically our economy kinda just runs on, even though a lot less is happening.
Restaurants have switched to delivery if they can. Most people I know actually have more money now, since you can't really go out and spend it. And May is usually the month where Dutch people get their 13th month (bonus).
We'll see the wave of defaults and bankruptcies in a couple of months.
I've not tested the low threshold, but a 20 minute drive seems to be more than sufficient.
We can do it just fine in cheap laptops (with lithium batteries which require more complex charge management), why can't we do it for cars that cost tens of thousands?
Emergency lights use a lot of power, as you can imagine. Even the LED ones. But we also don't want to idle on scene for a while.
So new ambulances (and engines, too) have a nice feature. Leave the lights running. Turn the engine off.
When the battery voltage gets low enough, the vehicle will start the engine, let it run til the voltage is better, then shut itself back off.
1. People have more free time from being stuck at home, unable to work, so less need to rely on delivery apps.
2. People get tired of being stuck at home and one of the few permitted reasons to leave is acquiring food.
People who already had the means to rely on Uber Eats, continue to do so. But the rest quickly realize that paying $22 for a meal instead of $8 isn't worth it
That app is awful. It took me six tries to login, because I genuinely couldn’t figure out that the “ok” button was a tiny black bar all the way at the bottom of the screen (I was using an iPad). I also struggled to change my default address from Chicago to LA, and almost ordered food in Chicago after changing my home address in the app. At multiple steps during the ordering process the UI randomly changed, making it really hard for me to find what I was looking for.
I’m not surprised that Uber Eats isn’t winning. Once my coupons are done I’m uninstalling that app and going back to Door Dash.
...shows some for Sapphire Preferred. Looks like a year of DashPass for free.
https://help.doordash.com/consumers/s/article/Chase-Partners...
I still have a huge problem with DD from their tip-handling, though. I know they revised it somewhat but they held out longest and have been the shadiest. I'm disappointed they're winning.
I don't think that any specific individual "deserves" to be punished for having worked at a company like Uber. There might be exceptions, and there might be a few specific individuals that crossed the line, but most people do their work and behave with honesty, and they don't deserve your negativity.
Uber will not.
The only other app I noticed doing this is Caviar. Perhaps they assume that people ordering from steakhouses will largely not care about the extra service fee, so it makes more business sense to jack up the price as much as possible. But personally it has stopped me from ordering on multiple occasions.
DoorDash does have a percentage fee. For me it shows "free" delivery and taxes and fees. Tap on taxes and fees and there's a service fee.
I have a Dashpass, so my service fee is cheaper, but I think it's 11% without the pass based on looking at some of my past orders.
I just tested a couple restaurants that are on both Uber Eats and DoorDash and it's pretty mixed in terms of cost. For some reason the delivery fees are really high on DoorDash for some restaurants, but for others they are "free" and the lower service fee tilts things in their favor.
Sometimes the price of the items themselves is different.
Shop around
GrubHub charges the restaurant a percentage, it just hides that in the cost of the food on it's platform rather than making it explicit.
I'm surprised to learn that DoorDash doesn't have the resources as they are giving away a lot of coupons.
Uber Eats does not have 'billions' - Uber does. The 'cost' of that market share is unknown - who is subsidising and by how much more?
Maybe 'Uber Eats' is a 'marginal strategy' in that they can leverage the slack time of their drivers into doing something else.
Market Share varies from country to country.
They may actually be using their $ to gain market share right now, why would you imply otherwise.
Their layoff could be for any number of reasons: convenient opportunity to trim the fat, close down some projects and do a 'one time writeoff', it maybe mostly just a covid reality. It's possible they are laying off more heavily in areas that don't have Uber Eats.
Billions in the Bank is not for a 'rainy day' it's for any and all sorts of things.
It would take some specific information with respect to Uber Eats to see how well they were doing with it.
UberEats app is somewhat buggy too. I also feel they lose out when it comes to overall restaurant selection.
Charging back those orders would be the right thing to do to discourage such behaviour.
Just read the App Store reviews for UberEats. If a driver isn’t able to deliver successfully they just cancel the order and blame the customer by default. Contacting customer support is met with robotic replies and they refuse refund.
Last time I just did a chargeback and won’t use them again.
My guess is not.
If you are in a resturant with friends and get a wrong food, would you tell your friends? I am wondering because I have never seen anyone stay quite if their food order was wrong. Just wondering if it may have happened among my group of friends, and they quitely ate their food.
If Amazon ships you a wrong product, would you keep that instead of what you had ordered?
I'm also unable to eat a certain common ingredient in cooking, and it's one that virtually every person on earth loves. I've found that complaining just results in them doubling that ingredient and I have no clue why. I've even gotten visible spit in my food before. Picking that ingredient out myself instead of mentioning it is usually better. I've grown a bit of tolerance for not getting what I want.
If I get a different package, it's probably not serving the same role, so I'll complain.
I think my treatment of the service industry changed significantly in high school, when I actually knew people who were working at restaurants and heard their stories of horrible customers. Having since worked at a restaurant and eaten out with lots of food service people, I believe that food service people tend to treat food service people better than others do (though I've seen exceptions both ways). I'm not trying to say this in a claiming-moral-superiority-via-kindness way, it's just a pattern I think I've seen in the world, and I think it kinda makes sense given the nature of granfalloons.
In industries where people tend to treat each other sanely, I would agree. I believe that most kitchens are managed by assholes who chew out their cooks over minor mistakes, so this is a particular case where I don't think I have a choice about how feedback is given. I can be nice to the server, but the only way I can be nice to the cooks is to not make my issue known. If the restaurant industry wants my feedback, the restaurant industry needs to fix this horrible work culture problem. If they could stop sexually assaulting their staff on a regular basis that would be cool, too.
Both cases ended up with a chargeback.
Deliveroo is similar, they banned a 2 year old account used multiple times every day (for both me and my flatmates) with over 2k spent on it for supposed fraud when I dared to ask for "too many" refunds because of cold/incorrect food (if you place many orders you have more probability that something goes wrong, but their "fraud" scoring algorithm - that also influences whether you can get one-click refunds directly in the app - doesn't seem to take that into account).
Both Deliveroo, Just Eat and Uber Eats also often lie and blame the restaurant for being slow when they can't assign a driver. I've had multiple occurrences where an order is stuck on "Driver waiting at the restaurant" for 20+ minutes but calling the restaurant reveals that the food was ready long ago and nobody is coming to pick it up.
Btw how many times did you heat up and eat the food anyways after getting your refund?
If the food was advertised as potentially cold or wrong upfront with no guarantees it would be one thing and the market will adjust (only people who want to take the gamble would order).
It is not advertised as such, and the prices don't reflect it either. You are offered a deal where you pay money for warm, or at least correct food to be delivered. The problem is that one side doesn't want to uphold their part of the deal but still expects the other side to uphold its part (aka paying the money). That sounds like false advertising to me and we have laws against it for a reason.
> how many times did you heat up and eat the food anyways after getting your refund?
Cold food actually results in a partial refund which is fine by me (though the option for the full refund should still be offered IMO, as some foods might not taste the same after reheating though I haven't experienced this personally). For me cold food was never a big deal, it was the incorrect food that made up the majority of the problems, often they wouldn't respect the extra options like "no cheese", the food would be completely different from the description (I guess the restaurant changed the dish but didn't update the menu on the app) or outright receiving the wrong order with someone else's order receipt attached to it.
Once again, if you can't suck up the gamble that is delivery food, I'm glad you get kicked off the platform. I just wanted to give a response from another pov since you felt like you were wronged: I read your account of events and think "nice, the system is working."
I never said it was either those people's fault (although I have seen drivers do other stupid things, like keeping pizzas vertically in their delivery backpack).
However it is the fault of the platform for advertising something and not delivering on its promise. The platform should be aware of how long it takes to deliver (taking traffic into account, especially for Uber which has access to that data already) and shouldn't risk offering deliveries if they can't reasonably guarantee the food won't be cold (or at least make it clear upfront - "this restaurant is far away and this might be cold - continue anyway?").
Again the problem here is we're talking about "move fast and break things" scum so being upfront and doing business fairly isn't part of their textbooks. Instead they hope most people don't kick up too much of a fuss and kick the ones that do. For what it's worth, I've never lost a chargeback case on these problems so seems like at least MasterCard agrees with me?
Not to mention if these were one-offs and everything else was great it would be somewhat excusable, but the other scummy things I've noticed (like lying about the restaurant being slow for their failure to have enough capacity) seems like this is not a one-off and the entire business plan is to be as scummy as they can get away with, preying upon unsuspecting customers who might not know they can do chargebacks.
> if you can't suck up the gamble that is delivery food
The problem is that it is not advertised as a gamble, quite the opposite actually. When a supplier sells me a product/service I expect them to deliver on their promise or compensate me if they get it wrong (I have been on the other side of this and made sure to compensate my client to make up for my failure). This is how business works in most industries, there's no reason why it should be different here IMO.
We might need a food credit score to get on these apps soon
The expectation of regularly getting hot food has been set over the years by the usual pizza delivery services and others. If new competition cannot match that then banning unsatisfied customers will only be a long-term solution if the majority of customers accepts the lower standard, but they are not obliged to do that.
I'm not saying one should always refund the delivery based on any imperfection, but most customers don't do that, otherwise delivery services would never turn a profit. But apparently some people got really bad series of wrong or late deliveries, and that doesn't have to be accepted silently.
I think these customers should just go pick up the food themselves, the rest of us can use the app. Department stores also ban problematic customers who return too many items, so this is not a new concept.
In my experience, the platforms are doing the exact opposite. A lot of times the driver is there, the food is there, and the driver is being told to wait for more orders. I've called and asked before on some of the platforms where you have the phone number.
That said, I've never seen someone bothered by having to put some delivery food in the microwave, though. It's sort of expected. About the only case where I've seen that is for pizza, and pizza places have their own drivers anyway.
So it's probably a good bet for the platform doing what they do. If you can serve twice as many customers this way, and have to ban 1/5 customers who have no microwave, you'd still come out ahead as a business.
This is a failstate in the recent video game Death Stranding, which yes, sometimes involves pizza delivery.
Without any prior knowledge of the actors involved you assign all good traits to one side; the restaurant created a hot meal and the delivery person really tried their best to deliver on time, and then assign bad traits to the customer, they were unreasonable and should be more understanding.
There are people who don't do the right thing and if I am paying for something then I expect to receive what I paid for. You don't know me. Maybe I am struggling financially and the meal I ordered was a once in month treat for my wife and children and we can't afford the luxury of eating out. Maybe we were all looking forward to a family dinner. Maybe the restaurant fucked up. Maybe the driver is running multiple delivery apps and making a killing in these while the orders go cold.
So you can just fuck off.
There's lots of examples in this thread and elsewhere that frankly most of these delivery companies aren't great at what they do.
Additionally a lot of them are shitty to their vendors (restaurants) - the post that spawned this whole debate being a perfect example. It's not necessarily Deliveroo's job to treat their vendors like royalty, but we give Walmart plenty of well deserved shit for abusing its vendors, no reason Deliveroo should be immune to criticism.
I get that it's difficult to reliably deliver food from restaurant to apartment in a time which is short enough that the food is still hot (or still frozen, or whatever). But I notice that some restaurants from which I order on Seamless are always correct, always hot, and typically delivered within 20-25 minutes. Others are hit or miss with some or all of those considerations. If some restaurants always get this right, it's hard to imagine that the fault lies with Seamless or gambling.
Meanwhile, the delivery platforms just push the cost back to the restaurants.
If restaurants had the guts to cancel their service with the delivery platforms, they could squeeze them into doing a better job, but at this time no restaurant can afford not to participate in the delivery economy, at any cost.
Reminds me about an article I read years and years ago about a company that was put out of business by Wal-Mart because Walmart would take almost anything back as a return and just forward it back to the company for a refund. They described getting tractor trailer loads back with empty boxes, boxes with most of the pieces missing, etc - all debited from their sales.
It is kind of amazing how many times UberEats, GrubHub, etc deliver cold food. Not just for me but vast majority of my friends report same thing.
As a consumer, I rather get refund so bad companies can go bankrupt before becoming too big to fail.
Twice, I have been left food that I did not order. Mind you, my house number is plainly visible in three locations from the street. They didn't even ring the doorbell. Just dropped it off on the porch and left.
These problems span across all delivery services.
I don't know who does the delivery for groceries, but I am at an almost 100% failure rate for drivers to follow simple directions. "Leave the order by the large garage door" is all it says. I've only had ONE driver do that.
I've given up on food delivery except for the pizza place that has its own drivers.
As far as I am concerned, all these services can go out of business.
If the food arrives cold, it's the platform's fault. If the platform can't figure out how to get food to arrive warm, its providing, in one dimension, a worse service than you would get without the platform.
I think that without tipping, you can expect your food to be delivered cold and late every order.
I live out in the middle of nowhere and consider myself lucky that they deliver at all, so if the food is a bit on the cold side I don't normally take it out on the driver. I've had other complaints with UberEats, but overall the service works about as well as can be expected.
While I'd prefer not to use UberEats, they've basically become the only option for a large number of restaurants around.
I've ordered food from a variety of places, including large internationally recognised chains.
About 20% of orders have something wrong. Sometimes it's minor things. Othertimes it's significant - like drinks and dishes missing.
So, I report them to Uber, and get a refund.
However now I get these snarky customer service form emails a few days later that gives these snide tips like "To better improve your delivery experience - make sure to be ready to collect your order promptly" followed by a semi-veiled threats of "We take fraud seriously and will terminate any suspicious accounts"
I'd be more than happy to submit photos or videos showing that the delivery driver gave me one bag when it's marked "1 of 2", or what items were actually in the bag - but no, just shit customer service.
e: I forgot to add - there's also zero way to contact them other than for a specific order.
I wanted to report to them a number of fake restaurants that someone is running out of their apartment. (The restaurant address is an actual residential apartment building, there's no commercial kitchen) There's no way to do that.
The owners of a few restaurants I frequent all seem to hate these apps for how much they charge them. I heard approximately 30-40%. Sure they do bring in customers specially now but 30-40% seems too high if you consider what it costs the apps.
What those apps charge to the restaurant is the money they expend on advertising to have those customers on first place. And the more money you expend on them, more money they will have to outbid you on marketing.
If you are searching on google for any place , you will see almost always advertising from those platforms before the owners site, just like booking does with the hotels, and like that the solution is to give some perks to people that reserve on your own site with reward cards or similar things, and also expend your own money on advertising instead of letting those platforms profit from you.
I dunno, one rarely wants just some generic burger/sandwich/pizza/sushi, brand loyalty in restaurant business tends to be strong.
I might be in the minority, but I usually start off with the restaurant Web site, and then just end up using whatever takeout/delivery app they link to.
Additionally, UE software is bloated and user-hostile compared to DD and GH.
Fees are about to be a big issue though -- to the end user UberEats is a full $2.99 more expensive than Postmates for < $15 subtotal orders. I don't know if that means Postmates is taking an extra $2.99 from the restaurant for those orders.
Either way though, the % of restaurants' orders going through delivery services surely just went up dramatically so those fees are now going to make a bigger impact, I'm sure we'll see the ecosystem change soon.
I thought maybe I was picking a restaurant "outside of my delivery range" so I made sure location services were on. No change. The first thing it does is ask for an address, I shouldn't even have to give it my GPS coordinates but hey, who would test that right? When I enter the address I shouldn't even be able to see restaurants that don't deliver to me so I doubt that was the problem.
It just simply did not work at all. I'm not dumb, I tried to give them my money and couldn't figure it out, maybe I finally got old. Maybe I got hit by a cosmic ray.
I can call the local pizza place and submit a delivery order in under 11 seconds:
"Hello mulmen, would you like to hear our specials?" ~2s
"No, thanks" ~1s
"Ok, would you like to repeat your last order?" ~2s
"Yes" <1s
"Is the card ending in 1234 still valid?" ~2s
"Yes" <1s
"Thanks, we will be at 1234 Main St #1 in 45 minutes." ~3s
<click>
Seriously, I timed it. 11 seconds is my best. They have a local call center for their many locations so they pick up almost immediately. Order takers only take orders. I can place an order on their webpage (they don't have an app, why would they?) in under a minute.
Pickup orders from other nearby spots is similar.
I don't understand the value these delivery services supposedly offer.
Growing up I could get a pizza ordered in 3 seconds flat.
Finish dialing... doesn’t even ring once. “George’s Pizza”. “Large cheese pickup!” “Ok 10 minutes.” <click>
Now try ordering from Cheesecake Factory. They pickup, and then read a script just to then put you on hold, where you might wait for several minutes before they pickup and make you recite name, phone number (Interrupting you to repeat each segment back as you are saying it), ask you a half dozen questions, finally let you order, insist on repeating it all back to you, etc.
I think it’s funny you’d think a digital menu and checkout cart would increase accuracy. I guess you just can’t win either way.
There's another active thread at the moment: "Ask HN: Name one idea that changed your life" [1].
I didn't think I had an answer but now I do:
"This isn't a technology problem."
All our shiny bleeding edge hyper-connected disruptive technology can't hold a candle to the level of service pizza shops and Chinese restaurants have been delivering for basically always. Using a pen and paper. Or maybe just shouting! Best we can offer is "Alexa repeat my pizza order" but is that really even better? It's almost exactly the same experience for the consumer but there's some surprising long term consequence like the pizza shop can no longer make ends meet.
I continue to be happy placing takeout orders over the phone like a caveman. A tech company that provides that level of service to their customers will go very far indeed.
In this case, you still need to considerably cut your workforce, to be able to use that cash for a "very long" rainy day.
Just IMHO. I can be completely wrong on all accounts.
Uber isn't that good when they can't afford to operate at a loss. Their real edge was too much money from Softbank.
Given the customer "service" I've had from Uber Eats, the only explanation I have is that they employed monkeys and I don't consider them a big loss (even though the most likely explanation is that Uber paid them too little for them to give a shit about their job).
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).
>>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?
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.
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?
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.
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.
Honestly I don't expect delivery services to survive, and I don't think it would be a tragedy if they ceased to exist.
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.
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.
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.
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).
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.
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.
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.
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.
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!
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."
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.
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.
> 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.
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.
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.
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.
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.
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.
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.
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.
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.
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
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.
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.
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.
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.
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:
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.
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.
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.
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.
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)
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.
Delivery is only option, I suspect delivery people are making a killing now.
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.
Doesn't Apple already grab 30% of the in-app payment?
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.
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.
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".
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.
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 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
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 think the app only covers NYC for now.
Does the calvin in the username refer to calvin and hobbes?
As we enter the recession, with oil prices at all record low, driver earnings are automatically higher and riders are little more patient with sobering environment. In this mode, the support expectations are less than what they used to be before. There isn’t a desire for a super prompt response, and since support costs are linear (more reps -> faster ticket resolution), it’s quite wise to reduce the cost of both synchronous (for drivers) and asynchronous support agents (for riders).
For the recruiting, since most of hiring is either frozen or happens through referrals, outbound hiring is going to be quite minimal and you only need recruiting co-ordinators for interview scheduling and admin. It doesn’t make much sense to have so many recruiters in such environment.
For the GH hubs, if psychiatrists are moving online to telehealth, Uber green light hubs are way more simpler to be executed remotely via Zoom.
I am classifying this as a offense move, because the defense would have been to raise more money through debts and so many companies are doing it, Uber could have played the same move.
It’s pretty scary though, if this does set the precedent for other companies, unemployment recovery in HR/Support is going to very very slow.
This looks to be just for service workers and contractors (like recruiters)
Uber was already a long-term market capture play. They were losing money but grabbing the market with the hope that they'd be able to get automated cars on the road in time. That was kind of sustainable (for a while, anyway), but now they're getting even less cash and will likely have to cut back to the must-haves.
Layoffs have got to be terrible for morale. I'd expect you'd want to minimize the anxiety by getting all the uncertainty out of the way.
My suspicion is that the lay off got leaked and it forced the company’s hand. They are probably scrambling to get everything finalized ASAP.
And eng lay-off requires more planning than customer support lay-off
Not saying they don't need them, it's just that there are a lot of "Wait that needs X people?" situations and I wish I knew what they did for a given use case.
Accounting?
Does uber need a lot of local reps for regulatory requirements?
I think a lot of "omg what do they do?" is actually curiosity.
I work on a SaaS product, we have a really small team. Accordingly we can't afford a lot of NIH when it can be avoided.
I talked to a semi-competitor and they noted they built a thing, we have that thing too ... 24 different devs on that project and they do have some extra features ... but it took them 9 months of 24 devs (not all full time granted) and my boss and I hammered it out in a week.
Our customers are using it, meanwhile they haven't sold it to anyone.
Now I'm sure there are advantages to their work but as far as what it does ... pretty much the same thing as far as core functionality goes :O
The amount of cycles NIH can scoop up is astounding.
If anything, Uber will save money by not operating. Their cashburn should be substantially lowered if they are not subsidizing rides.
[1] https://benjamintseng.com/2019/04/lyft-vs-uber-a-tale-of-two...
At the same time, this time presents a unique opportunity for their engineering: how often does the market give you several months to breathe? Isn't this the time to polish the product, to finally fix all that tech debt you accumulated?
Based on what? Raise your hand if you're excited about either driving or being driven by strangers now. I think we're looking at several years post-vaccine before one can credibly argue that peoples' comfort with that sort of thing will have recovered to pre-pandemic levels. Ditto AirBnb.
1 Where we live Whole Foods in store purchases have been cheaper than Safeway, who they are trying to put out of business Walmart style. Prime home delivery has got very expensive per item (and a lot of the items ordered don't show up, shown as out of stock) in comparison to buying in store.
2 100 years ago it was normal in most Western world countries for small vendors to deliver food to homes. Milkmen in the UK had electric milk floats until the 1980's, delivery bicycles and tricycles were very common until the 1960's, and smaller local vendors almost invariably offered local delivery. I spoke to an Ocardo delivery van guy in February based in Coventry UK who told his route went into Wales 90 miles away. In the US we are consuming incredible amounts of packaging to buy small items from Amazon.
I'm not seeing value in centralizing delivery through large entities via casual delivery people unconnected to the businesses they are delivering from, I see massive profits for a tiny number of people and zero oversight of our private business, what we order and from who. I'd like to see a return to local anonymous delivery via private arrangements with local vendors.
As a seperate topic I'd also like to know that my every move in an Uber/Lyft etc is not being tracked, filed away by God knows who and sold.
Building a polished, stable, feature-complete mobile app for the two major platforms generally costs about a million dollars if you want it to be world class. Of course you can reduce scope or polish or pick only one platform, but that's roughly what it takes.
Who's going to pay to develop the apps that these local businesses use to do online ordering, to sway customers away from Uber Eats et al? The reason these organizations are achieving market penetration is because their UX is polished. Yelp made a whole (predatory) business off of small business owners being bad at websites.
I'd love to see it become more decentralized via private arrangements, but there are real costs to entering the market due to software developers not being cheap. I'd also love to see a resurgence in use of the web for such things, but despite being able to bookmark websites to one's homescreen, it's still not quite at the point where using a website feels like an app, and users care a lot about that stuff.
Mobile apps do things that mobile websites can’t, such as integrated payments and geolocation.
The SEC filing: https://www.sec.gov/ix?doc=/Archives/edgar/data/1543151/0001...
https://www.businessinsider.com/uber-reportedly-considering-...
I have an emotional reaction to this. Maybe I should be equally needy and switch jobs as soon as I get a better offer.
> Maybe I should be equally needy and switch jobs as soon as I get a better offer.
If it's actually a better offer, yes you should. Your company doesn't have any loyalty to you outside the risk of replacing you.
Now that the world has a recent concrete demonstration of what it means to be in a pandemic, with all of the emergent problems revealed in gory detail, shouldn't we change some things so that we can cope better in case it happens again? Like I've said, no one buckles their seatbelt in expectation of getting into a high speed crash on their current trip, but we prepare for such a severe circumstance due to the cost/benefit.
Would be akin to putting twin turbochargers in a cheap car which already has extremely high engine compression. it could be done, but only a very select customer base would pay for it, and would likely not see any benefits they don't already see from "free" things like disinfecting, social distance, etc.
Pretty much the same things were said about seatbelts.
Would be akin to putting twin turbochargers in a cheap car which already has extremely high engine compression.
Why? Please quantify and back this up. Seems to me that such mods are not that extreme. Plenty of cars in the past were not built by default, but were rather modified to be taxicabs, such that there was a wall and window completely between the passengers and front compartment. I see no reason why making that airtight is cost prohibitive. Heck, I bet people would've said that making a car's HVAC system bioweapon-agent proof would be cost prohibitive. Tesla just went and did it, and is putting that system into cars designed to hit a lower price tier than they had previously.
but only a very select customer base would pay for it,
Same thing was said about seatbelts. I bet plenty of Uber drivers who couldn't work otherwise right now would sign up for some kind of lease deal.
and would likely not see any benefits they don't already see from "free" things like disinfecting, social distance, etc.
Well, for one thing, Uber would be able to operate a passenger "rideshare" business during a pandemic.
The frunk is just a trunk for storing things in the front, common on Tesla cars.
True that, though I was thinking about rideshare being robust against any pandemic, going forward.
That's where you'd keep another body. jk. I meant the front half of the passenger compartment, with the driver.
I have also had similar experiences with UberPool. I was charged extra because the route was longer. It wasn't worth for me to complain about $10 but I stopped using UberPool later.
I have tried food delivery a couple of times and the extra cost was so expensive that I just didn't feel like it was worth it. I get that they need to charge a certain amount for the service to be sustainable/profitable. I didn't find it to be worth it.
They also played a lot of games with the Amex Platinum credits. So I closed the Amex Platinum card as well. It was not worth playing the games to save $15 a month.
This is definitely a wizard of oz moment for many "tech" companies.
It means that something is revealed to be fundamentally weaker than it appears.
The wizard isn't actually a super powerful wizard. It's literally just a dude behind a curtain talking into a microphone and operating some contraption. [1] If you hear someone use the phrase "man behind the curtain" this is what it's referring to.
- Founded by IT people (Garett Camp co-founded StumbleUpon) - HQ in San Fransisco - Uses technology to link drivers and consumers
An USP compared to a traditional taxi company is their app, which added convenience to taxi services - don't have to call someone, don't have to worry about handling money, etc.
But, if your cost structure isn't really like that, then if you're not profitable when you're small, that's a signal that you're not a good investment.
A lot of companies with cost structures more like a conventional company, that weren't profitable, tried to claim that they were a tech company and therefore as they scale up they would become profitable. Some investors fell for this, or thought that someone else would when it was time to IPO.
Whether this logic was ever valid is, IMHO, debatable. But in this case it's a moot point, because Uber (and Lyft, and Lyme, and WeWork, and etc.) don't have a cost structure that looks like a tech company. They may use software, but most of their costs do absolutely scale up as they get more customers.
Uber would have been having layoffs this year regardless, I think, they are just doing it now because they have an external shock to blame it on.
> Note the centrality of software in all of these characteristics:
> - Software creates ecosystems.
> - Software has zero marginal costs.
> - Software improves over time.
> - Software offers infinite leverage.
> - Software enables zero transaction costs.
> The question of whether companies are tech companies, then, depends on how much of their business is governed by software’s unique characteristics, and how much is limited by real world factors.
...
> - There is a software-created ecosystem of drivers and riders.
> - Like Airbnb, Uber reports its revenue as if it has low marginal costs, but a holistic view of rides shows that the company pays drivers around 80 percent of total revenue; this isn’t a world of zero marginal costs.
> - Uber’s platform improves over time.
> - Uber is able to serve the entire world, giving it maximum leverage.
> - Uber can transact with anyone with a self-serve model.
> A major question about Uber concerns transaction costs: bringing and keeping drivers on the platform is very expensive. This doesn’t mean that Uber isn’t a tech company, but it does underscore the degree to which its model is dependent on factors that don’t have zero costs attached to them.
He walks through a few other examples as well (e.g. Netflix, Airbnb, WeWork, Peloton), would definitely recommend reading the whole article.
[0] https://stratechery.com/2019/neither-and-new-lessons-from-ub...
I certainly enjoy using Uber and Lyft over Taxis, and when I travel for business I never rent a car these days where as I would always rent a car when confronted with the alternative of dealing with Taxis. Do you think i'm overestimating the advantage the software brings to the experience?
[1] https://www.marketwatch.com/story/millions-of-lost-jobs-may-...
It will accelerate automation.
What's needed is demand, the way for that to happen is for government to pay for things and to create jobs.
If you drive taxis, like Uber, then you're perhaps not going to do well.
https://www.stuff.co.nz/business/121422743/microsofts-signif...
First Lyft, then Airbnb, and Uber... are all unicorns taking this kind of hit right now?
Shopify, which is 100% ecommerce, just reported record numbers.
With quite a bit of retail shutdown as well as many people not wanting to leave their home, lots of money is shifting online, and these ecommerce enablement companies are going to benefit a lot.
However, I think you can make a pretty good argument that it's going to turn into a general economic depression, which means pretty much every company is going to take a hit sooner or later. Millions more people (in the US) will be struggling to make ends meet over the next few months, and that's going to have bad ripple effects.
I don't know that this is so mysterious at all: Uber and Airbnb sold transportation and travel, which are two segments disproportionately affected by the pandemic.
It has nothing to do with their "Unicorn" status at all. Uber is suffering for the same reason taxi cabs are. Hotels are getting pinched along with Airbnb. But taxis and hotels suffer in traditional ways, whereas startups show up on HN. But there's no "startupness" to this analysis at all.
The "disrupters" disrupt oligarchic industries with stagnant business models. They don't "disrupt" the actual industry they're in.
Anything travel related is going to be screwed for the foreseeable future. There will be very little international travel for at least another 6-12 months. Cross-European travel restrictions are already being talked about. The US will continue to have community transmission in their "open" states. There is no business travel.
Things are moving (food etc). People aren't.
Australia and New Zealand have discussed opening their travel and perhaps expanding that to the Pacific nations, which have been mostly spared due to isolation.
That was the astute remark of the cafe/restaurant owner when I asked her how the business is going. (It's a lovely cafe/little hole in the wall in Brooklyn selling Brazilian fare.)
She first expressed gratitude for having an understanding landlord and the arrangements they have made. "And we were already set up for delivery unlike some others", she said. I remarked "business must be good for these delivery services", to which she replied "We're all working for these guys now".
Everybody has moved on to Zoom, even though SFB is available via our org wide Office365 implementation. I do use it to send quick messages to coworkers in different regional offices, as their online/offline status is a useful indicator of their availability since it's connected to their outlook Calendar. And the screen sharing feature is good, there are never any compatibility issues. But as a voice or video call system, it's not great. Zoom has had far lower switching costs.
Not yet. The earnings call in Q2 (Not Q1) will be the true writing on the wall.
> are all unicorns taking this kind of hit right now?
Not just unicorns but also other startups that are unprofitable and have a high burn rate are taking a critical hit.
First travel related companies, which is mostly consumer, like tourism (flights, ...) and in-person services (house cleaners, ...). In parallel, weaker companies in general (enterprise startups that raise megarounds wothout megarevenue).
Scarier is 1-2 financial quarters later. No clue yet, but as the b2b's relying on b2c's start missing their numbers for more than 1qtr, who knows. Can they just reduce by say 10% + consumer divisions, or were too exposed?
A big saving grace is, in bigger co's, annual budgets mostly passed in dec--feb, so a lot of flex time ahead. So if commerce starts thawing , there will be cuts, but not so bad. Long-term, whole tourism etc sectors hurt, more about reshuffling for everywhere else.
A silver lining is for startups: this is a time of chaos, agility, big moves, digital, and soon, m&a. I have a talk on Friday w 200+ people registering last minute - in our industry, we are lucky to be quite busy, but every week is a surprise right now! More importantly, we are volunteering on health interventions and people are sick: $ is useful but not #1.
No judgement, just one of those "Wow, people do a thing that never occurs to me to do..." moments.
(OK, I did get Thistle in SF.)
Wasn't the Borg devastated by a virus?
TNG was such a good show.
XD
In the past there was a size limit to managing a company but unfortunately technology allows for more and more central control so the trend to ever bigger companies will probably continue.
I sometimes feel like we live in that world already just without the cool neon/fashions.
Drones, militarisation of the police, massive corporations that are basically immune to governments on a basic level.
The East India company is gone, the railroads and US steel aren’t what they once were. And this age shall pass too.
You say the railroads are a bygone era, just drive through San Marino to see what railroad money has bought and continues to buy to this very day. This wealth did not evaporate, it has only grown.
We have EL wire and plenty of awesome cyberpunk fashion is available on places like Etsy. I fully support making cyberpunk fashion a thing. If I have to live in a dystopia, I at least want to look good doing it.
I honestly think we'll see a cyberpunk renaissance (in terms of aesthetic) starting later this year and definitely in 2021. Not just because a game like Cyberpunk 2077 is coming out, but because of things like the Cybertruck (https://www.tesla.com/cybertruck) - it looks outlandish now, but I believe the designers knew what they were doing and understand trends and aesthetics better than most non-professionals.
Then there are upcoming massive Hollywood releases like the Matrix 4 coming in 2021, as well as a reboot of Videodrome and Akira, plus games like Watchdogs: Legion etc.
More mainstream culture is also embracing cyberpunk at the moment. Take the rapper Lil Nas X - https://www.dazeddigital.com/music/article/45887/1/lil-nas-x... or the musician Grimes - https://www.pcgamer.com/grimes-reveals-how-her-cyberpunk-207...
Hell, this is a bag from Louis Vuitton that just screams "cyberpunk": https://www.theverge.com/2019/5/13/18617427/louis-vuitton-ro...
Now if you mean LINES of business, then yes, they both regularly expand into new lines of business and then dominate them, either in skimming the profit (ala Apple) or just altogether (Amazon.)
Regulation is strongly, negatively correlated to competition within any industry.
Managers wanting to seem self-important, and speculation-prone owners, are too obsessed with growth and seek to maximize revenue. Even maximizing profit is still meh, because that still creates some incentive for growth. What we really want companies to maximize is profit / revenue, or profit / employee. In other words, productivity for productivity's sake.
BTW, co-ops are generally great, and already have the incentive to maximize profit / employee. Perfect!
But how do we get non-employee owned companies to do the same? Tax them based off of revenue rather than profit. Then they will only grow if they don't need to burn productivity in the process. Yes, capital expenditures no longer have the nice side benefit of reducing profit, but the incentive for productivity makes up for it.
Also, it's fair because stupid things like income tax are effective taxing revenue rather than profit, and finally it's also way simpler to levy / harder to evade.
One is that it promotes a skewed specialization on the high margin while neglecting the lower margins which may be important and essentially by definition are in high demand if they got big enough for that economy or scale in the first place. It is largely inequitable as it discourages the low end from showing up at all.
Two is that it inherently misvalues resources based upon what it sees as revenue vs not. It echoes the Soviet mistakes in thinking of their workers as serfs with free labor and new tools as expensive because they cost revenue. Said revenue would continue down the chain as one's gains are another's losses that need to rise virally down every logistical step leading to needless repetition to "start from scratch" with vertical intergration.
At risk of a very low-information me-too comment...
Yes, this. I'm finding it very hard to place myself on the "political spectrum" to even label what my beliefs are or find allies to join forces with.
If you could sum up my (economic at least) political thoughts on the matter it would be "whatever system results in lots of small merchants competing in a market that does not allow for huge monopolies to exist". I want thousands of 100 person companies competing, not one giant Google. How realistic that is, is of course a very open-ended question - and certainly some problems exist with the theory when you need to get "scale" projects done that require large organizations of people.
I still have no idea what political or economic system that is, but I believe that's the balance where we optimize both for economic security as well as the human need for agency.
For now, I simply try to vote anti-monopoly as much as I can, but in recent decades that doesn't mean much as no one is even talking about breaking up these giant telecoms/media companies/etc.
Hardly. The Federation is, well, a federation. A loosely collectivized body of disparate groups, each with their own goals but united through a common cause. This was one of the central tenets of TNG; that diversity is strength.
https://youtu.be/CUQ2nmKNH3Y?t=79
Plenty of Galaxies, Excelsiors, and Mirandas (or maybe variants like Soyuz) flying around.
You will adapt to service us. You're going to become a drone. Resistance is futile.
Decentralization, redundancy, shock absorption is something you have to explicitly value and pay for (with lower quality and/or higher prices) and I don't think this is more than a niche preoccupation. Maybe this pandemic will change things, but do you really wanna bet against lower prices?
I'm not a nerd who remembers all this Star Trek stuff - I just watched the episode a few days ago (because I have TNG on repeat)
Not a high level of enthusiasm but considered the current best option. I know in High School I often went with identical breakfast despite being sick of it because I found others would leave me feeling fatigued before the late lunch hour block I was scheduled to have.
The inside baseball of Uber doesn't really matter does it? Why dont they lay the whole company off?
Do drivers count as employees in states like California, but as independent contractors elsewhere? The answer would provide greater context to these numbers.