What is everyone's problem? Why do we want to interfere with this?
Sure, they will get some deliveries but what about the people that would buy at $10 but not $15? And what about the people that won't dine in because they think prices are 50% higher than they are.
GrubHub is skimming valuable customers while discarding others. That's good for them but ultimately harmful for the restaurant.
It's marking them up... yeah. Is that a problem? Do you realise when you go to a store all the products are 'falsified' by marking them up on top of what the producer sells them to the retailer for?
Doordash or whatever says 'for $x we will put a WhateverBurger burger into your hand'. As long as that's what they achieve, this seems fundamentally honest to me.
As a consumer I don't really care where that $x goes to - Doordash, WhateverBurger, delivery person... doesn't seem my business to interfere in people's private financial agreements.
The diner gets offered a deal and can take it or not.
The restaurant gets offered a deal and can take it or not.
The delivery person gets offered a deal and can take it or not.
Seems to me like everyone is acting ethically here, and everyone is accepting a deal they're presumably happy with. If they aren't, they can turn it down and go elsewhere.
That's not what they do, though. The receipt shows line items with a cost for the food, a fee for the service, and a delivery fee.
The problem is there's an additional fee for the service hidden in the supposed cost of the food; customers don't actually know what Doordash's cut really is.
But why would you care? I don't need to know the bill of materials for all my transactions. When I buy a coffee I don't expect to know how much they paid for the beans.
If you wanna say "delivering a pizza will cost you $20" and leave at that, fine. If you tell me the Grubhub fee is $5 and it's actually $10, I'm upset.
...but this is exactly how other industries already work and everyone's fine with it!
When you buy a TV from Amazon they both mark it up and also charge you delivery!
And they didn't give you the option to save by managing delivery on your own!
Why don't you get mad at Amazon for marking up products as well as charging delivery?
What percentage of customers do you think understand that Grubhub is marking up their food?
>If they aren't, they can turn it down and go elsewhere.
That's precisely the problem. Some of the restaurants customers are turning it down and going elsewhere because Grubhub has misrepresented their prices.
Why do they need to care about the markup? If the burger price seems like a good deal, go for it, otherwise don't.
> Some of the restaurants customers are turning it down and going elsewhere because Grubhub has misrepresented their prices.
Well then that seems like the situation is fixing itself due to everyone's free ability to do what they want? So why are we complaining?
Why don't you answer the question?
>Well then that seems like the situation is fixing itself due to everyone's free ability to do what they want? So why are we complaining?
In what way is the situation being fixed?
Well I'm not the one who cares about it. I don't understand why anyone else would. So I can't answer it!
> In what way is the situation being fixed?
People who don't want to do business with Doordash don't have to. If you don't like Doordash you can just forget they exist. It's not a problem.
And let's not act like this law was passed because of consumers- this is restaurant owners trying to have their cake and eat it too.
Doordash or whatever says 'for $x we will put a $y WhateverBurger burger into your hand,' but $y is already higher than a WhateverBurger costs. People are left thinking that $x isn't that high a cost for delivering a $y burger, but the actual delivery cost is $x plus some percentage of $y, so both the numerator and denominator are falsified.
They're lying about their value proposition.
So add $x and $y together. If that price works for you go for it, if not, don't.
A markup plus a fee is already a common thing. It's done so that there is a minimum to cover expenses plus something that can vary with higher value items because you can get more profit from people who are willing to pay for more luxury items. It's not strange or unusual or a foreign concept to anyone already living in a Western economy.
I don't see why you'd care how they arrive at the final price. Just look at the final price.
These vendors are distorting that signal by misrepresenting the price. If it were clean-cut, and the original price were still visible, and the delivery as a separate 15-20% fee, then fine, I could do exactly what you suggest. Is it or is it not worth it to have this delivered right now?
But it's not. Let's say I see an arbitrary restaurant serving the kind of food I'm in the mood for, say Vietnamese food. I can then look and see the price to know roughly what quality of food to expect: Is it closer to $10 or $30 for an entree, since those are two very different things.
The total price might not even matter to me. But if I order a $20 entree with an extra delivery fee, and what shows up is a $10 entree, then that's a problem and most people will believe that the restaurant offers terrible value, because they were lied to by the intermediary.
That's the issue. It's not "am I will to have my In-N-Out burger delivered for $6 extra," it's "with Doordash lying to me about these restaurants I've never been to, I have no idea whether this is worth doing or not until I've already paid and accepted delivery."
But that’s just not true. Branded products vary in price on different retailers. A can of Coca-Cola can be wildly different prices in different places. Are you not used to this as a consumer?
> Having a 3rd party, which may still add value to both the brand and end-user, interject and abstract from the brand's determined prices is unethical, period.
I don’t understand - have you never bean to a supermarket or a department store before? They sell other brands in their store. Do you not realise they’re also marked up?
I think everyone else is playing dumb!
They're telling me they're shocked that a business would mark up a product they buy from someone else to re-sell? And I think it's a bit off they're calling it 'unethical'. It's no different to what other companies do all the time and people consider it acceptable and the only distinction is the label of delivery/retailer?
The restaurants do it themselves! They resell wine with their own markup plus charge a service fee!
Also, this is a luxury product we're talking about - restaurant food delivered to you home. Why are people so aghast that they're having to pay a marked-up premium for it?
Imagine you’re selling chocolate that you want people to associate with luxury/wealth. To achieve this you might want to limit resellers to be 5 star hotels and luxury stores rather than the 1 dollar store.
Of course you can. What makes you think you can't?
People are free to resell any goods they own (exceptions for things like controlled substances, other things with regulations etc.)
Took you long enough, thread!
In general we don’t expect resellers to reveal their cost of goods sold.
That's exactly what Grubhub is doing.
Because customers who order through Grubhub/Doordash blame the restaurant for issues such as high prices and wrong orders instead of Grubhub/Doordash. So on one hand, the restaurant gets increased business but on the other they never interact with the customer directly and so their business' reputation depends on Grubhub/Doordash/etc to not fuck up, which is unlikely.
It would be better and fairer to legislate that GrubHub and others must be clear about where their pricing comes from rather than legislating what their prices should be.
They can still charge whatever they want for their fee. They just can't hide their fee in the list price of your sushi.
Legal: "Your pizza is $10. Our fee is $3, delivery is $5. Total bill $18." Restaurant gets $10.
Not legal: "Your pizza is $10 (but we quietly take $3 of that). Our fee is $3 (but we hid an extra $3 in the pizza!). Delivery is $5. Total bill $18." Restaurant gets $7.
Legal: "Your pizza is $7. Our fee is $6, delivery is $5. Total bill $18." Restaurant gets $7.
Legal: "Your pizza is $10. Our fee is $6, delivery is $5. Total bill $21." Restaurant gets $10.
Legal (but not great for business): "Your pizza is $10. Our fee is $600 because 'fuck you, we have VCs to pay', delivery is $5. Total bill $615." Restaurant gets $10.
These apps can lead to poor experience and perception of the restaurant due to the delivery short comings and customers tend to transfer any unhappiness with the delivery as being the restaurants fault (eg late delivery and cold food).
Should a manufacturer have the right to say that you can't re-sell something that you bought from them fairly? That doesn't sound great to me. If Doordash fairly buy the food then they can sell it to me (as long as they follow food regulations). That sounds fine, doesn't it?
In addition, most restaurants will not just accept takeout orders from a random person that shows up on a bike, it’s an organized partnership. I wonder how they even achieve that.
Why not?
- they don’t have the appropriate packaging, ie don’t actually do delivery
- it’s inconvenient for their order pipeline / system
- they can’t vouch for the carrier handling, is the food going to arrive still hot? A shaken mess?
- is the carrier going to add or remove something before it reaches the customer?
Any of those can be damaging for the restaurant, losing a customer, or even downright dangerous in the case of incorrect handling.
Let's pare it down to only you and the unsolicited service - You come home from work and the neighbor kid from six blocks down you've never met bills you for mowing your lawn while you were away.
Let's pare it down to only the unsolicited service and the business - Hi, we put out a bunch of ads that say we're you and have a bunch of customers lined up ready to order. We'll tell you who they are for a 10% service fee. Also we lied to your customers about your prices.
Imagine you bought a new car two months ago, then find out the sales person was just some guy who hangs out on the lot, told you he works for the dealership, and charged you a 10% markup over the dealership's actual price. Imagine your elderly neighbors fell for a door-to-door roofing scam that works the same way.
Then they charge the customer for an additional service actually rendered - the delivery. They charge this as a delivery fee and a markup that they can vary on more expensive items. This is pretty normal for a retail business to do.
When they're marking the item price up, that claim is false. Given these apps' SEO juice and ubiquity, users are left with the false impression that Restaurant X sells a pretty expensive burger.
Like when you shop on Amazon - they say 'the TV is $x and our delivery fee is $y' - really the manufacturer charged them < $y but they mark up and then also charge a delivery fee, don't they?
Nobody looses their mind at this.
I would be upset if Amazon had brick-and-mortar stores and they sold me a $100 TV with a $10 delivery fee online, but that same product was available for pick-up at $90. I'd be fine with it sold in-store for $100.
We do flip out when these sorts of pricing tricks are used. One I can recall: Best Buy ran a bestbuy.com intranet in-store to wiggle out of online deals. https://www.engadget.com/2007-03-03-best-buys-secret-intrane...
This seems like an information problem rather than a pricing problem. As long as the customers understand the relationship between GrubHub and the restaurant, I don't see any problem with GH charging whatever the market will bear. But right now they seem to be deliberately misleading the customer by listing fake prices separate from the delivery fee.