Our restaurants are failing. Why should food delivery apps thrive?
latimes.com
latimes.com
Obviously this is different for different restaurants, and the skill set needed to run a restaurant is vastly different from running an e-commerce site, but just like they need to figure out how to do taxes and read lease agreements, online presence is a necessary thing in 2020.
Visa, Amazon, Apple, Google, or Paypal sort of provide that function, but being able to shop many restaurants with a single identity has its benefits. Something that wouldnt be fixed just by restaurants with nice websites.
In the long run, I honestly think kitchen-only setups optimized for efficiency & food safety will grab a big share of the market. They can experiment with vertical integration, and avoid all the hassles & limitations of sit-down dining. They will be able to more, better, faster and cheaper. It might be hard to copy & paste the entire thing from one city to another, but the core functions should be quite portable.
It would be crazy smart for someone to standardize an interface (e.g. REST API), let restaurants implement glue to their systems, and then allow a plurality of delivery services to consume and order through the standard interface.
It needs to be a protocol like email or http, not another company with a proprietary aggregator.
For delivery it's harder because you actually need someone to deliver the food and the logistics are really hard (they have to get there when the food is ready but not too late and not too early, etc.). But... there are like 80 restaurants in a 10 minute walk radius from me, so I can just deal with pickup for now.
The best part is actually just having a variety to order from. Before these delivery services, there were only a couple of pizza places and a couple of Chinese restaurants and nothing else delivered.
For a lot of restaurants, it never made business sense to deliver, and still wouldn't. But when the delivery service is spread out over many restaurants, it works rather well. That's good for both the businesses and the customers, despite the friction added by the middlemen. It's a real win for people who couldn't as easily go out to eat, due to health or disability or whatever, but also for everyone else.
But because they have an insurmountable most (not earned via any sheer technical breakthrough, just through cunningness and being ruthless) they don't need to care if they have too many engineers,whether these engineers are any good, or if their nodejs ec2 instances serve 100 queries a minute. So they just keep it like that.
Companies like IBM needed decades to get into such a rot, modern VC funding and cloud computing have just accelerated this phenomenon.
And tbh this should happen. UBER had to spend billions on marketing and getting their model "right". But now it is clear that such platform is essential for modern city. At some point UBER will have to get this money back with ride fees. Next competitor that can replicate UX of UBER, but raises less capital will be very well positioned to offer competitive pricing. And switching between these platforms is much easier compared to something like Facebook/Apple.
Grub-less et.al are as much about ordering and checkout as they are about discovery. I can rank and view all restaurants offering Sushi in my delivery radius. This is what makes them powerful.
Uber et.al are a marketplace. You are absolutely right in that they have zero switching costs but they have a two sided pool of supply (drivers) and riders (demand). This is hard to replicate.
There is an argument to be made, that if I just want a pizza, then my major decision-maker will be price.
I suspect most customers are either starting looking for a restaurant they know by name, or one near them to ensure maximum freshness, using Google Maps or Yelp or the like. Only when they've already chosen a restaurant do we transition into the delivery app flow.
I'm sure a lot of money is being spent for chain restaurants to advertise "order via Postmates" or "exclusively on GrubHub"-- again bypassing them as a discovery system.
We've been told that evil VCs subsidize service to run at below cost to drive competitors out of business. Uber is often accused of this. Why aren't we seeing that phenomenon here? And Uber is literally one of the competitors.
There are some other possible reasons tho, like food actually not being as "commodity"-like as we think it is (like rides are)
The other hypothesis is that delivery is simply expensive. The driver has to drive to the pickup place, find parking, stand in line potentially for awhile, drive to the delivery, park again, walk to the delivery location to drop off the item. Most of those things an ordinary uber fare would not have to deal with.
A claim that all of these have formed a cartel requires strong evidence.
And 2 of those are potentially combining.
Looks like a split amongst 4 right now, as far as the big ones go. This doesn't include the smaller startups as well.
Reminder that Adobe, Apple, Google, Intel, Intuit, Pixar, Lucasfilm and eBay all colluded to keep engineer compensation below market value[1].
[1] https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...
If you went to a VC with a model for a food service delivery taking less than 30% of the transaction, they'd more than likely pass. 30% is the bar that's been set, and your unit economics have to be as good or better than the existing players. They're not keen on investing in "just a cheaper version of something that already exists." -- If you're marketing yourself as "cheaper," it has to because some innovation has eliminated more cost out of the transaction than you have eliminated in net revenue.
Your moat argument is the same that had people invest in uber 10 years ago, which we are seeing is failing in regions like EU where Uber is getting lambasted.
Of course, you'd have to be rich in order to have done that in the first place (an "accredited investor" as defined by the SEC), and this ignores the other investments you made in 2010 that went bust.
Later investors got screwed by the poor IPO performance, especially those that bought, hard, into the "moat" argument. Hell, softbank is possibly underwater on its investment.
That's only half the battle though, food delivery marketplaces like Grubhub are very entrenched and changing consumer behavior back to using the restaurant's website takes time and effort. Marketplaces also spend a ton on marketing to make sure consumers go through them and not directly via the restaurant's website. It's an uphill battle for the restaurants.
In such a world, Some model of Ghost kitchens will thrive anyway, not small restaurants.
Why ?
The area a kitchen serves will become much larger - distance matters less when you don't need to go pick the food. And even when food freshness matters, there are some solutions like parcooking and finishing the cooking in ovens inside delivery vans.
The type of food a kitchen serves becomes much more varied - today your Chinese restaurant has one kitchen, and the Mexican place has a different one. But with delivery-only, a single kitchen can open many virtual restaurants.
This also helps with delivery - a single family who likes different food, can order from the same kitchen, and get the order delivered in one go.
And this is now an internet business - since customers prefer all the restaurants in a single app, single search - and those add new complexities.
And usually, small business(in aggregate) often had the benefit of agility over large businesses. But a virtual restaurant is very agile, conducting business experiments is rather cheap.
And personal service and deep relationships don't exist in food delivery - and that was a weakness for big businesses over small ones.
So long term i don't think delivery a good place for restaurants to be.
Which only seems compelling in a future in which people are literally unable to cook for themselves.
I have worked with these large kitchens that can make different types of cuisines depending on your want, but they all turn out mediocre.
My family completely stopped ordering out during this pandemic because most restaurants have lost the key employees who make their food special, there is no atmosphere, and GrubHub et al add no value.
As an example, most people buy from amazon even though other retailers have very good websites, without inline advertisements and many times with lower prices.
another interesting example is tow truck services.
Some retailers have good websites (most don't), but I've always found issues like: slow shipping, having to create an account, spam from the retailer, poor customer service, etc.
What about the delivery part of the problem? Everyone does realize that Seamless etc. actually provide the delivery staff for many of the restaurants on the platform, right?
GrubHub's stock price isn't much different from where it was 5 years ago. UberEats isn't expected to turn a profit for another five years as they continue to lose money on every order.
There are no monopolies here taking advantage of restauranteurs. There's an entire ecosystem of food delivery apps competing with each other.
The reality of the situation is that delivering meals is extremely expensive. It doesn't have meaningful economies of scale the way package delivery does. Both restaurants and customers have to pay these huge delivery fees because that's just what delivery costs. (In fact, many are still being subsidized by massive VC.)
Running a restaurant is always a precarious business proposition in the first place. Adding delivery is another precarious choice -- you can massively increase revenue but only at the cost of massively decreasing profit percentage, and if you don't calculate exactly right it'll seem like a big waste-of-time wash in the end, or you'll even lose money. That's just how it works.
I have tons of sympathy for restaurant owners, but just because it's hard -- not because they're being taken advantage of, because they're not.
But laws that restrict the ability of food delivery apps to charge what the market will bear isn't going to solve anything. They don't have these extra profits lying around they can just moderately reduce. The inevitable result will be them dropping the restaurants that are least profitable for delivery entirely, and reducing deliverypeople so your food will take two or three times as long to deliver. That's just Econ 101 -- if your revenue is reduced to where there's no path to profit, you need to cut quality. End of story.
"While neither Uber nor Grubhub turns a profit delivering food, they are nonetheless venture-backed and raking in mountains of cash: Grubhub reported revenue of $362.98 million during the first quarter this year, a year-over-year increase of more than 12%. Uber Eats’ revenue surged 53% from the same quarter a year ago, to $819 million.
Restaurants, meanwhile, are facing utter devastation. The restaurant industry lost 5.5 million jobs nationwide in April, according to the Bureau of Labor Statistics. In L.A., the overall unemployment rate now stands at 24%, an increase from 4.7% in February."
edit: additional context from article
Focusing on jobs in the context of gains and losses is a bad idea in general as the only real measure you'd get regarding jobs is 'how many people can support themselves by working' which is the actual real-world impact. And if you want to take survival in to account or basic living standards you could even go a little more abstract and try to report on 'how many people are stuck in poverty'.
It doesn't matter how many jobs you have if people barely get by. Same goes for having less jobs: if people are still doing OK it's not as strong an indicator of anything to report job counts.
If you lose money on every order, you're not thriving in any sense. You're hoping to thrive some day in the future. The fact that they're venture-backed is irrelevant. Restaurants are backed by investors and bank loans too.
Generally, yes it does. The up-front costs for building and marketing a platform so that it ultimately becomes profitable are enormous. In today's climate, the idea that a company could just "choose" to be profitable now and in the long-term rather than grow is disingenuous: over the following few years, other companies will eat their lunch and they'll fold.
But with delivery apps, answering your question is not hard. First, paying delivery people is expensive. Crazy expensive. That's obviously the main variable cost. Then there are huge fixed costs with creating and maintaining a multi-platform app, customer service to deal with late/missing/wrong orders, sales and support for restaurants, marketing, and all the normal business stuff.
That's your answer. Food delivery apps aren't spending half their revenue on frivolous side projects like space rockets or cities of the future, or questionably/fraudulently siphoning revenue to a founder. They're just trying to operate as normal businesses, and there's zero evidence to the contrary.
Food delivery can be profitable, and they could switch to being profitable if they wanted to. That's what the parent company is saying - they chose not to as they want to operate on the hypothesis that investing in growth as early as possible will put them on an expontential trend in a network effect -based business. Which is true.
However, what you say is right as well. If they switched to a completely profit skimming model, their competitor would keep them in check very fast.
However. what data that I've seen in ridehailing shows, is that if you invest in growth and achieve the 1 or 2 position in volume, you can grow and reap profits simultaneously - at least for some time. It's a massive juggling effort.
Delivery fees are on top of that if the restaurants choose to use Grub-less' delivery network. I dont know the breakdown but most I know use their own. Uber-eats is different.
The alternative marketing+order management costs for a restaurant to generate and fulfill that demand on their own is even higher on average, or else restaurants would be using alternatives.
And there is a ton of work involved on GrubHub's part of operating/maintaining the sites/apps, handling customer service (frequently), moderating reviews, provide support to restaurants, combating fraud, marketing, and so on.
Believe me. If you could create a GrubHub/Seamless clone only charging restaurants 5% to use it and still be profitable, then competitors would have already done so.
The author acknowledges that the delivery services are losing money. And yet, the author is essentially saying that the apps should lose even more money because someone else is willing to fund the apps.
First we need to know why they don't turn in a profit. Potential reasons include:
- Because they pay to the people delivering (I don't think so).
- Because keeping the app running is to expensive, i.e. server costs (I don't think so to).
- Because they payed a lot upfront to create the app and are still paying it of (Maybe, still unlikely, this would have been their own mistake and go away after some time).
- Because they are spending to much on "external" cost, like advertisements (likely).
- Because they know they don't have to yet make profit so they take maximal advantage of venture capital by reinvesting much profits in R&D and similar (somewhat likely)
- Because they are selling a service for to little to the end customer, i.e. making losses to "kill of" competition by taking advantage of venture capital (I think that's the main point).
The thing is paying people to deliver stuff is expensive just the wage which needs to be payed can noticeable increase the price and doing much advertisement isn't cheap either.
So normally I would expect <price in restaurant> + <not small additional delivery cost>
Or alternatively <price in restaurant> + <a small bit more> + <constraints like only delivery if destination close to restaurant (max 15min time) and min order amount (20+$) etc.>
But what we see is prices nut much higher then restaurant, not limited to close proximity, no or low min amount.
So someone has to pay for it, and by using a combination of intransparency and their (perceived) marked power they force a not small amount of the cost they have to operate somewhat profitable onto the restaurants...
Which is the actual problem I think.
It costs money to run the services and someone has to pay for that. It's in these services' interest (as well as all stakeholders: couriers, consumers, and restaurants) to keep those costs as low as possible.
Perhaps the entirety of the cost should be shifted to the end user. Legally mandating caps on commissions would force that shift to happen to some degree. I'm not opposed to such a shift.
Customers are lazy because inspite of all the talk of supporting local, they are too hooked on click-click-click and ordered.
The delivery apps have hundreds of millions in investment in technology and marketing, a lot of it shady. The apps can offer addictive flows that restaurants cannot compete with.
The solution out of this is an app co-op model - payment processing (3%) + 2-3% overhead. There are similar offerings in the ride-share world and this should work on the delivery apps as well. I would rather support an app that provides a healthy living to a small company in Tulsa or Talinn that subsidize rents in SF and fatten VC portfolios for an online menu with checkout supported by hundreds of millions in marketing dollars.
Yes an awful lot of them are lazy. I mention him only to mention the scary accuracy of it, but the late Anthony Bourdain has a chapter dedicated to crappy restauranteurs in nearly every book he’s written on the topic of food service as a career (of course his distaste for crappy restaurant owners is poignantly dotted through the entirety of “Kitchen Confidential” to be fair), and I often wonder to this day to hear his voice on the state of affairs in food service during a pandemic, and the micro economy that’s sprung up in food delivery.
Perhaps a better way to say this is: restaurants are good at being restaurants, but aren't always good at establishing an online presence. A big part of why these delivery services succeed is that they provide a function that restaurants aren't well suited to provide on their own.
This isn't about being lazy, it's about an industry needing to adapt to the new expectations of the app economy, and often not having the expertise to do so.
That's the majority of all businesses. And like many similar industries, the razor thin margins don't allow restaurants to properly invest in tech.
Times change and circumstances change. Businesses either evolve or get replaced.
The problem now is that delivery services are being subsidized by VC money or however Uber is getting new money after their IPO.
I have worked in commercial kitchens and have plenty of friends who run restaurants and have spend time in their operations. They regularly complain about the 30%+ they fork over to grubless. 30% is an insane fraction in a business that barely makes an accounting profit!
In established restaurants, a significant fraction of the orders come from repeat customers. Moving these repeat customers to a 5% friction channel from a 30% channel can be a game changer.
Now when I walk past restaurants, I see banners imploring folks to order from their website. I guess, one silver lining from this pandemic.
It's not actually clear to me that every restaurant acting individually can actually recover that delivery service fee. There's no economy of scale for them to exploit.
i mean why isn't dominos, pizzahut, etc. teaching them how to do delivery?
with everything going on, with these apps not helping restaurants, i decided to stop using these apps and go get my food myself. i only use apps when i get lazy like OP says.
[1] https://github.com/nikolas/dominos-pizza-tracker
(I’m still hunting the original article where this was announced, the first version they released I’m pretty sure was linked here on HN in the mid 10’s?)
a website and online menu is something that they felt they could get away with the bare minimum, no regard for surfer experience. it, along with maybe throwing some money in an seo pit, with a checkbox in a playbook.
Is that anywhere near enough to actually pay for a delivery? I have both the Dasher app and the DoorDash app. That delivery I pay $2.99 for leads to the Dasher often being offered $13 on a $30 order with a $4 tip.
If the fees were real, the restaurant wouldn't need to care about pickup vs delivery, but the apps would lose some business because $15 is a good reason to do pickup.
The answer in a capitalist market is that restaurants will raise their prices to stay in business. As prices go up, people who don’t want to spend money in restaurants will find alternatives, you will have fewer restaurants and they will have a sustainable business model.
And if they do somehow make it, once they become the market leader, they're going to start asking for a larger portion of the pie. That's how business works, be it in Tulsa or SV.
These entities are the exception and not the rule but one can always hope. I know, I know, hope is not a strategy ;)
Um, no. Most businesses seek growth by trying to offer new/upsold products and services rather than trying to squeeze their customers for the same service.
Most businesses that aren't market leaders have to offer new or upsold products and services to grow because they can't throw around their monopoly power.
If you control 0.01% of the the entire delivery food sales market, and you raise middleman fees 3x, your (restaurant) customers will take a hike and switch to a different, cheaper delivery app.
If you control 75% of the market, your customers might be more willing to accept the increased fees.
And the reason they think this is that when customers used to order "takeout", they'd still pay full price and the restaurant would keep all of it. So it feels like they've lost something.
But that's all wrong, because takeout used to be "improperly" (per a market analysis) marked up. Serving takeout is cheaper: no need for tables and dishes and servers. Lots of restaurants have known this forever and prioritized their takeout business, and done very well.
But now those savings are all being eaten up by another party that is providing useful improved services to the customer, and restaurants don't like it. Well... I guess I wouldn't either, but what they're complaining about isn't so much unfair competition than it is (heh) the elimination of what for them used to be a free lunch.
The market will re-equilibrate. It always does. But yeah, until it does the distribution of changes will not be fair. It never is.
Grubless et.al are really a discovery platform. Once the customer acquisition happens - restaurants need to move to own the customer relationship. There is so much low-haning fruit there - repeat sales, meal subscriptions, boxed lunches.....
Panera and Chipotle are about as far apart as you can get, sandwiches and soups versus burritos and burrito bowls yet where I see some alignment is how they both have amazing online ordering experiences which allow deep order customization that eschews a lot of friction in doing so. I can’t think of another large chain with similar order experience between the two (Edit: Potbelly, perhaps for sandwiches?)
Ridiculous. This is an assertion made by somebody who has never tried to convince anybody of anything, by somebody who doesn't know the meaning of the word "discoverability," who has no concept of what market dominance means.
Without government intervention, you can't "new business model" your way out of this. Especially not in the middle of a pandemic that is being historically mishandled.
People get a lot of value out of delivery apps. If they didn't, they wouldn't use them. You're asking people to forego something valuable on your say-so. How can that be justified?
Every technological innovation is opposed by those used to the old ways or who are financially interested in the perpetuation of inefficiencies from which they benefit. This opposition frequently takes on a moral character, as it has in your comment --- if you use the new thing, you're a bad person making an unethical choice. Well, I reject that.
But it's more than that. Centralisation of food delivery also means centralisation of your sign-in details + address + payment.
In the decentralised model, you rely on each of these restaurants to implement these well and securely. In the least worse case scenario they might go with some login with Google/Facebook solution (which is gross for other reasons). Not to mention the friction (and often sub-optimal sign-on flow) on these independent sites because they lack an army of UX A/B testers.
Last time I signed up independently for a restaurant via their app (because they took themselves off Uber Eats) the food took 2.5 hours to come and arrived cold.
I'm not a huge fan of moralistic takes on business. If you're selling something dangerous then that's wrong, but it's very easy to be blinkered from a high position.
If people want to buy food in a certain way I can't really blame them - arguably the same with Uber and taxis, Uber has disrupted an industry which was fairly uncompetitive and politically charged (Their prevalence indicates the customers appreciate their presence in the space)
How can one make such a vast claim without knowing things such as cost of input materials, machinery, labor, etc?
PS: And yea it’s more complex than that, you can generally skip out in advertising but may be paying significant overtime etc. But that’s rarely particularly important as there are so many inputs involved in ramping up production that you hit multiple different limits.
People in short supply also don’t just work additional hours for double pay. An hour of my leisure time is worth far more than double.
If home toilet paper demand will only be high for 2 years you can't make money.
You also want prices to increase to discourage hoarding. Otherwise what happens is that people with disposable income just strip the shelves because there is no possible downside to hoarding toilet paper. They can just not buy it later with no loss to themselves if the price is the same.
What is the ideal pricing to achieve long term goals wasn't something I was addressing.
Not every plant is run at a constant 24x7 three shift schedule. There are plenty of businesses that keep some slack in their manufacturing to respond to changes in demand as part of their corporate strategy, especially if they think there's an opportunity to gain market share.
But in my experience, there's usually some slack. Maybe not enough to pick up all the demand, but there's some. Maybe they have three shifts but don't work weekends or such. Then they can have people pulling lots of overtime.
Raw materials are usually well-stocked in advance. There is a limit on how much demand can spike before there are issues, of course, but some industries may have weeks or months worth of raw materials stocked. This is going to be highly variable by industry, though. Something like raw glass is nothing like stocking chickens for processing.
For TP I'd guess that they can stock a lot of raw materials, though. It's not made from anything that's going to go bad on them, so they probably stock up a lot based on whatever is cheapest.
If anything it's the opposite.
So, raising the price on TP does nothing to increase supply in a 1 month time frame and reduces availability to the poorest. Instead, reduce demand with a bidet and limit customer purchases.
If you have some plants that are not at capacity, you can hire additional shifts to produce more, run on weekends, etc. Then you have additional labor costs, overtime, materials costs, etc. to recoup.
The manufacturing plant I once worked for had spare capacity for the better part of a decade, so it's not some completely unusual thing and was in fact part of our corporate strategy at the time to gain market share.
A new shift will take a while to train up and temps are... ugh... don't even get me started about the sort of people temp agencies send. We had some that only lasted a day for not listening and doing stupidly unsafe things. One of them nearly hit me upside the head with a piece of glass because he wasn't paying attention to where he was swinging it. That was his last day on the job, for precisely that reason.
Talking about buying your own health insurance is taboo amongst some in the UK, even though it reduces pressure on the (I should "our") NHS, because to them it's immoral to have capitalism in healthcare or something like that
Further, just as the US abandoned domestically made masks after the H1N1 epidemic, and went back to inexpensive overseas versions -- they may do it again with PPE. So you also need to cover the costs for quite-possibly a factory you are building that might stop operating in a year or two.
Perhaps so, but if that were the case, the producer wouldn't be fairly accused of profiteering. Usually these accusations arise when the production or acquisition cost for the seller is low and the sale price is very high.
In cases where the free market isn't incentivized to make the supplies we need, it's the job of the government to take over and make them. "Profiting from catastrophe" as you put it will result in price gouging.
Definitely possible but I'm not sure it's happening specifically at the moment.
And how that usually works is that the government offers to pay a very high price to someone willing to doing so.
This isn't all that different as the government then pays 5x for the item.
But yes, this certainly could be true.
Capitalist enterprises are neither immoral (left) nor moral (right). They just happen to be the most efficient - read easy to cobble together. It does not mean they are the best outcome for society.
I don't like the societal purpose questioning because people forget that not everyone has a lot of money to spend - the trade-off will almost definitely be between "ethics" and the cost to the person on the street.
I don't buy my books from Amazon because I love Amazon, I do it because it's the cheapest option and I know it'll work. If you want to spend a bit more and support a local book company that's up to you but Amazon is undoubtedly a better experience than any other company I've seen (Specifically for relatively niche technical books, if it was a fiction book it's basically the same).
^ that isn't to say Amazon should he left to monopolize as they please, just that the nuance is easily missed.
This is not a debate about the merits of capitalism vs. socialism (or communism).
This is simply saying that some free-market solutions lead to worse outcomes for society. My hoped-for solution was a co-op model app which is completely in the free market realm.
You went ahead and made this about the inherent virtue of capitalism and choice.
I really dont know what you are saying about Amazon since you seem to be equivocating. Not letting Amazon be a monopoly is depriving their customers of choice!
as determined by who?
No, the reward is money/resources and the person wasn't implying the polar opposite of the article. You are creating a false dichotomy here by trying to split things into good or bad. There is a neutral position that you don't have to be invested in.
> Why is questioning the efficacy, for society, of the economic models of any company considered immoral?
I don't think the parent said this at all.
If someone says they don't like cauliflower, that isn't a moral judgment. You are not understanding what is being said or what it implies.
Correcting someone about is not casting a moral judgement. Saying a piece of a system meant to create and capture some value doesn't need to be ascribed good or evil is a statement that can be taken at face value. Trying to say everything is a moral judgement that someone else is creating a false dichotomy is just projection.
Some people care about both.
For example in Japan there is no tipping and trying to do so will be considered very rude. The restaurant and its staff are professionals, they have set a price and you are paying it. They dont expect a tip for doing a good job as they simply strive to do a good job each and every time they serve guests.
Focusing solely on consumers ignores negative externalities. There are many situations in which cost benefits from such externalities (slavery, pollution, human rights abuses, animal mistreatment) can lead to a favorable marketplace position vs competitors who do not exploit such externalities.
What is more, many of these exploits (slavery, pollution, human rights abuses, animal mistreatment) were or are legal at the time such exploitation occurred. Therefore using legality as sole criterion of propriety is insufficient. A moralistic/ethical take on business is, far from a negative thing, highly necessary.
If consumers lack the moral conciousness on their day to day transactions, then how can we expect them to make the right moral choices when they vote?
There have in fact been successful consumer-led movements, but the most successful of these concern cases where the consumers also happened to be the same people being exploited (colonial India's rejection of dumped British textiles, the Montgomery bus boycott, the Boston tea party, etc).
Cases where consumers have acted en masse on behalf of another exploited class are a lot fewer and weaker. To some extent, one may point to the current growth of organic animal products as an example of this, but even in this case, this has been boosted by consumers seeing these choices (in some cases rightly, in some wrongly) as also healthier for human end consumers besides the question of animal cruelty.
History's guide suggests that while morally-minded consumers can and should vote with their wallets, such personal virtuous choices are largely useless without a larger movement to effect change.
And if history suggests that people's virtuous choices are largely useless, then how is their voting going to be any better?
A more topical one might be if you disagree with a company using sweatshop labor. Figuring out which companies engage in sweatshop labor and avoiding them is a remarkably difficult task, not in the least because companies do whatever they can in order to hide said actions. And even if you do manage to create a list of good/bad companies, there's no guarantee that you can purchase solely from the good companies without having to go through some other morally dubious medium such as Amazon.
The idea of shopping based on your moral conscious might've worked 50 years ago when the supply chain was far smaller, but nowadays it's so complex as to be almost unfathomable for one user to shop their moral compass without touching at least one thing they disagree with.
With regards to the sweatshop labor: if you care not to buy sweatshop clothes and you can't reasonably establish the origins of the clothes, then don't buy them. Only stick with manufacturers who have had their products verified by a trusted third party.
It's also overly reductive and ignores things like voter suppression, extralegal affairs and abusing the court system.
For your second argument, you seemed to ignore my original point which is that it's generally impossible to actually establish the origin of said clothing due to the complex supply chain behind the scenes. Even if it's a trusted third party, that clothing is still being delivered via companies that deliver sweatshop clothing and sold in stores which sell sweatshop clothing. At a certain point some percentage of what you pay will go to support said sweatshops whether directly or indirectly, so how can you expect a consumer to operate in a full moralistic behavior when all of their actions are losses? At that point the only winning move is to not play, which is also not possible because, well, Capitalism.
Given how many people actually don't even bother to vote, I doubt voter suppression is the problem. It seems like an issue of implementation and limitation of the current political system. In contrast, "voter" turnout by consumers is 100%. Every product you buy is a vote you cast.
With regards to tracing the origins of a product: you're trying to fix a problem that's even worse with government. If you're so concerned that you aren't able to identify the origins of a product with 100% certainty, then we ought to compare it with the baseline: what is the trust factor with government? At any rate, the traceability of a product can get as accurate as you want it to be... so long as you pay enough money to establish it. If you want, you can be flown to every part of the world and you can personally ensure that every fiber of your clothes is not coming from a sweatshop. Of course, that would be insanely expensive, but it is possible. 99.99999999999% of consumers don't want that much transparency.
What a product should cost depends on how much people are willing to pay for it. Whether a product should be allowed to exist depends on whether it's morally acceptable.
The issue with slaves, and products that pollute the environment or mistreat living things isn't how much they cost - it's that they exist at all.
I don't think the two are so easily separable. If you take for example, "a dozen eggs", most people would consider that an acceptable product. But if you said "a dozen eggs for ten cents", for those to be legitimate eggs, they must be stolen. If you could somehow inspect them and guarantee they were legitimate, I am sure plenty of people would accept those stolen eggs at that price, but their willingness to pay for it doesn't mean the existence of a market for "a dozen eggs for ten cents" is moral.
I'm reminded of how people would express outrage over products made in a low wage country being defective or toxic, and sometimes a response would be "well, people who demand ultra-cheap products deserve what they get". That's a denial of the fraudulent aspect of such a transaction, and the inability of the consumer to solve it.
As for pollution, if that's immoral, then so is going to the restaurant to eat itself as well as driving in general.
Not counting of course the fact that in certain regions of the world, if they don't do that they'll starve to death.
And human rights abuse? I had a job delivering, and it was honestly one of my favorite jobs. The pay wasn't great but just cruising around listening to music all night was awesome.
then "humans right abuse is somehow related to delivery but I won't specify how"
then I replied "I was a deliverer and it was a fine job"
Of the three arguments mine is most relevant.
Maybe you can explain how subway delivery involves human rights abuse.
right, so if you get pizza delivery, you're probably Hitler running Deep Horizon. What a nice way to argue your point.
If I wanted premium service and a premium seat, I can pay the premium price for business or first class, or fly on a better airline. Even though people complain about the terribly small seats and lack of service on budget airlines and economy tickets, they still choose the lowest seat price above anything else. And the cost of plane tickets has fallen drastically over the past few decades so it's not like the same product is more expensive, people just want cheap flights.
Appreciated their presence in the space or appreciated that some VC bozos were handing out huge discounts on taxi rides?
Why are restaurant owners ok with paying so much for rent on a useless (during COVID) storefront in a high traffic area, but when Uber Eats gives them more marketing and orders than the storefront does, Uber Eats is the bad guy.
Be mad at the landlord or COVID, not Uber.
I was, a long time ago, a delivery driver for Little Caesar’s and it seemed to work out for everyone without any technology to speak of.
EDIT: I am aware of the three party optimization problem for food delivery services. In housing seems to simplify that problem immensely given there is no /fourth/ party trying to optimize it from the outside and take a cut in the process.
2. Tips. Most people do not tip the app drivers. I suspect more people tip the pizza driver as he sees that you stiffed him. Customers are no longer paying for the delivery.
Sure, but that doesn’t preclude that Chinese restaurant from having their own delivery function. Each Domino’s restaurant needs to be self sufficient as well. Googling “Chinese food near me” seems to provide the look up.
> Customers are no longer paying for the delivery.
Have you seen the charges from an Uber eats delivery? We stopped using food delivery services entirely and just pick up now to save the ~$20 overhead on dinner.
I feel bad sniping at him, because I agree with the general principle that the economics of the restaurant industry are worse than they ought to be. But this genre of social reform take, "we must smash this business because it's doing well when others aren't", is just incredibly toxic.
You might have already been ordering from them & not realised - they used to be marked as “Editions” on Deliveroo:
https://foodscene.deliveroo.co.uk/promotions/deliveroo-editi...
IMO the relationship between delivery apps and restaurants could be a bit more mutually beneficial.
How this could potentially work -
1. Restaurants modernize their web presence with the help of the app company. They make it easy for consumers to order online through their website, or some sort of aggregation app, but the restaurants maintain their brand, and process payments.
2. Restaurants put out a bid to deliver an order through the delivery app and someone in the area agrees to pick it up
3. The delivery person receives the fee and perhaps a few bucks as tips upon delivery
The app company would make money through long term contracts (partnerships) with the restaurants to service their delivery needs. These types of long term partnerships could be much more valuable to both the app (tech company) and the restaurant - the app company could help the restaurant modernize and maintain their online presence which is much more valuable than pinching them with fees.
Obviously this is more challenging for both sides since it requires buy-in, long-term collaboration, etc but the other option is to not adapt and continue fighting delivery apps for tight margins.
I feel like Yelp would be in a perfect place to do this if they weren't too busy pinching restaurant owners for ad money.
It didn’t help that a month before shutting down a group of workers unionized in Ontario, and further threw a wrench in a terribly low margin business and now none of them have a job and the entire city is stuck using Uber
Note: Foodora only shut down their Canadian business, not their European one.
Foodora had acquired Hurrier which was our other homegrown food delivery service here in Toronto, which is obviously no longer an option either. They too were struggling with margins, which I know from speaking to people who worked there.
I don't think unionizing is ever a problem. I you do moralistic acceptable business practices. If your business is only profitable by paying below acceptable salary, push side costs onto employees or cutting corner wrt. employee safety then it IHMO it is better for your business to close. Additionally if a whole industry is affected by this then IMHO it needs a major reform in how it works or it should just cease to exist.
Sure food delivery can not cease to exist, it's needed but if their is no way to operate it profitable without taking advantage of delivery personal and/or restaurants then it needs a major change. Either people need to accept that delivered food is more costly or the state needs to subvention it (during epidemics and similar where it's an somewhat essential service for some people, like when your stove just broke yesterday).
But their shareholders see this as an opportunity to expand the markets. They aren't taking this for granted, they're aggressively spending on marketing, on signing up restaurants for their platform (except DoorDash, they list most restaurants without partnership), on ads for Google, Facebook, and other major platforms. This is why they aren't making a profit.
But it's eating so much into their costs that they're doing some sneaky practices: they're doing the same that Etsy does, taking more out of the net sales on advertising that the restaurant did not consent to knowing they will be charged for it as much as they were.
A comment I made about that here: https://news.ycombinator.com/item?id=23195743
I am definitely in the minority on that, but not in a tiny minority.
Just because they can have food made for food delivery services, doesn't mean it will be the best choice for regular customers.
Where restaurants compete with food delivery is by being in a physical location that people seek to have an experience. Or a quick stop on a car ride. Or a fast snack near work.
For some restaurants food delivery simply won't work.
So this is not only abuse of the restaurants, it's economical self-injury. Possibly self-destructive entirely.
A formerly prestigious newspaper is arguing against a new business benefitting in a strained supply chain. It's a weak attempt to gain status.
Maybe some people could setup a non-profit platform to connect delivery driver and restaurants and is focused on transparency?
Operating such a platform shouldn't be to expensive. The major cost (I guess) lies in advertisement and paying people to actually do the delivery.
I believe customer being able to see how much of the price goes to the platform, the delivery driver and the restaurant (maybe required by a law?) would not just open up the eye for unfair practices but also for understanding why prices are higher when delivering (as it becomes clear that 3 parties instead of one need to live from the money).
Given how many complains against delivery services cropped up in the recent half year on hacker news it maybe might be time for (small&mid-sized) restaurants to organize?
I have both DoorDash and the Dasher app. I've seen the order I might regularly pay a $2.99 fee for (I don't as I have DashPass) be offered to drivers for $13 with a $4 tip. This was on a $30 order for two.
How you pay for delivery is a major issue.
What I meant is the cost for the platform not the products and service on it. I.e. the costs to keep the app running and doing the bookkeeping on in the server.
The idea is that if it's hard to profitable operate platforms for food delivery if you properly pay the delivery person and the restaurant, then maybe it would be better to not try to do so and instead operate such a platform as a non-profit (or shared responsibility of a large group of restaurants) focused on connecting independent delivery personal and restaurants.
With that you would only have the service/app operational cost and if the area you cover is large enough you probably could have something like a fixed $1 or less cost per delivery (+food cost + delivery personal cost).
Naturally this also would mean you don't have money for doing much R&D or advertisement. So it would be in the responsibility of the restaurants to advertise that people can order online over that platform.
I.e. it would turn the whole delivery business conceptually upside down by putting the focus on the restaurants. Or you could say it's just going back to the roots.
I'm not sure if that could work in the US. But I think it has a chance of working in many EU countries.
You'll need legal teams to write up you contracts/TOS, and keep them updated in the face of changing laws and regulations. Site reliability engineers to keep everything running, and dedicated development teams for bug fixes and unavoidable application changes (say you realize there's a bug exposing customer data, you need that fixed now, not whenever you can find a contractor). Don't forget phone support.
When you factor in the cost of running the delivery app, plus about $10-15 per hour to pay the driver, which has to account for driving to the restaurant and to the customer, I'm not sure how much cheaper food delivery can be. It's already a competitive marketplace, and there's even small, regional apps, but I haven't seen any that are significantly cheaper in general (excluding things like temporary specials, deals with a restaurant chain, etc...)
Eventually the workers improved their condition through massive and coordinated strikes that entirely blocked the production and prevented anyone to replace them until their requests were met.
(On the other hand the fact that delivery apps are funded by VC money and don't turn profits either sounds even more ominous: does it mean that consumer spending is fuelled by debt and still not producing profit for anyone involved?)
Restaurants left with ugly payments to 'delivery apps' sounds bad, but most of the reason is delivery is expensive!
The bulk of the cost here is not some magical money-making software, it's the time, effort, gas, wear and tear, energy of someone delivering.
Most delivery app companies are losing money anyhow.
A better approach might be to strongly deregulate delivery and taxi services. Let anyone do it, have some industry-standard practices (i.e. you have to register, certain vehicles for certain things, some minimum pricing laws etc.) and then let's see how that works.
Restaurants can literally order a regular taxi for food delivery and such general taxis could be used for a lot of things.
If I could have a nice meal out right now, I’d probably spend 2x what I would pre covid! Anything just to do something nice away from home.
The accounting is significantly easier apparently when the company just gets a monthly Doordash bill rather than having to deal with individual receipts on concur or something.
[0] Foodsby delivers to company offices, not individuals. They coordinate orders with the restaurants, so that they aren't delivering single meals, and the restaurants can put a cap on the number of orders so they're not overwhelmed. The restaurant does the delivery so they control that cost (no hidden charges to them)
And the fees charged by delivery services are artificially low due to the high level of competition and all the investor money.
And them forcing part of their costs onto the restaurants. ;=)
Still stopping operating a restaurant doesn't stop all costs, so operating it on a small flame and doing a bit of not very profitable delivery jobs can still be better then not operating at all.
https://atyourdoor.co/ does delivery for a lot of local distilleries.
I think this local consortium thing is the way a lot of smaller businesses will go.
"EatNYC.org is an updated list of restaurants that are still open for pickup and delivery in New York City*. Ordering directly ensures restaurants keep 100% of what you pay. "
And quite honestly, without food delivery most of these restaurants would be dead anyway so they really should be thankful. There’s no way they could coerce enough customers to drive down, find parking and wait while they expose themselves to COVID just for a meal.
That said I think where these delivery services have come in is at places that historically didn’t have their own delivery. Now these places suddenly have “delivery as a service” to add on with Seemingly no additional work, a fee, and additional revenue.
These places could easily start their own delivery service if they want, but they must still think it’s easier to pay the delivery as a service fees.
In Poland, Pyszne.pl is usually better and offers a wider selection than Uber Eats. The delivery is often provided by the restaurant itself, just like you suggest. In fact, I made two orders from Uber Eats today and both are delivered by the restaurant. But even then the intermediary keeps them honest with reviews and access to the platform. It's not pure rent seeking.
Before that, these platforms do a lot of promotion, marketing, and allow for easy discovery. They have greatly expanded the market. Just like Uber did for taxis.
No one's forgotten anything, that's just simply not true. I've never used UberEats or DoorDash, and I've had food delivered plenty of times over the years, and never had a problem.
I assume this is the same sort of propaganda Uber fans use when they claim taxi service was universally terrible and corrupt before they came along and disrupted everything. No, for the most part both taxis and restaurant delivery worked perfectly well for most people, most of the time.
Never needed to, I could just call them on the phone.
>you couldn't figure out what the price was before ordering so there was no direct competition
Sure I could, I would just ask them how much to get from point A to B. The price I was quoted was always accurate.
>many localities had an anticompetitive licensing scheme on top of that
Has no effect whatsoever on me as a customer.
>and a not insignificant number of drivers would take you the long way during off-peak hours IOT inflate the price
I've literally never had that happen.
Quotes on the phone aren't in writing and I've never had them honored. "Oh that's just an estimate."
Lack of competition has an effect on all customers. Nobody is exempt from economics.
Sure, but it works perfectly fine elsewhere, most people aren't calling the taxi from loud, crowded areas. Having an app is convenient but not having an app is hardly a horrible experience.
>Quotes on the phone aren't in writing and I've never had them honored. "Oh that's just an estimate."
The price I've been quoted has always been the price I paid. It's unfortunate that you appear to live in a wretched hive of scum and villainy but your personal experiences are hardly universal. There are plenty of places around the world where taxis work just fine.
To me the main issue is for restaurants the margins are thin and the price/profit equation is very different for every restaurant. So applying the same business/pricing model for all restaurants won't work. The only sustainable way is to let customers pay for the delivery. Right now the apps are forcing the restaurants to pay up in some ways by service shaming them to sign up and offer delivery. Of course profitable restaurants will become do more business and the rest will lost more money. Not a good thing for the over all ecosystem.
I guess this is when the concept of kitchens set up just for delivery will take off.
The only answer is shockingly enough for both the delivery services and the restaurants to charge enough to be profitable and then people will have to choose to get out or pay the market rate. Capitalism is the answer.
On the other hand, since I am a bleeding heart capitalist, I have no problem with the government giving people money who can’t or shouldn’t go out to make it easier for them to get delivery.
The restaurant loses some money because they have to pay for take out containers instead of being able to use a reusable plate, but they're not having 30% taken from them. I guess it helps that their customer base is those who probably aren't going to try to pull a fast one on the restaurant (one that caters to foreigners) but I don't think screwing over delivery people is very ingrained in the culture eitherway.
30% might be worth it if the only way people will discover you is if they search "pizza" into an app and you have the highest rating within the first three results, but if people are seeking out your restaurant as returning customers then you shouldn't need to pay 30% for a very expensive ad.
Basically small shops doing 40-80% of their revenue by delivery but limit delivery to places reachable shortly with a scooter and min amounts of 20€ or so.
This shops then have their own delivery person working part time for them and when they have many orders or orders at times where the delivery person doesn't work they order an external delivery person (and then often make very little profit with that delivery).
The only difference is that you pay the company and they pay the delivery personal.
Orders are mostly done per phone. And payment mostly done in cash. Through often the delivery personal has a mobile card reader, too.
Through we also have US stile apps, with similar problems (but better labor laws, so at least wrt. employee abuse they tend to be slightly less terrible).
(Ref: Germany, Berlin)
That's a deal-breaker for me as I want to pay with a credit card.