Otherwise I can’t really justify spending $25 to get a burrito delivered. Amazing that people have normalized paying for the insane number of fees plus tip to get one thing delivered.
The other thing to think about is people are probably just shifting money from eating out, to delivery. I mean you could go to Chili's and spend $50 for two people, or you could get Chipotle delivered for $30.
There are also the shrinking frugal demographic like me who can afford a $25 burrito, but out of principle would absolutely not pay that much for a bunch of beans wrapped in a tortilla, microwaved for 1 minute.
My overarching point being that if people can barely afford the current VC subsidized food delivery prices, what is the possible market size for non VC subsidized food delivery?
Edit: I don’t see a source for 42M Americans having incomes over $100k per year. This source says 15.5% of US households had incomes over $100k, and at 128M households, that is 20M households with incomes over $100k.
https://www2.census.gov/programs-surveys/demo/tables/p60/270...
I went to lunch with a girl who worked at a Bestbuy. She spent the entire time trying out figure out how the a group of current BestBuy employees nearby at the restaurant could afford the food (overpriced $20 meal) for such a causal meal.
My former landlord financed everything she ever did, including her damn electronics she would throw away or break in a year. She was a widow, on social security and was cheated out of a pension. I have no idea how her monthly payments weren't thousands per month.
Americans fucking suck at financial literacy and trap themselves in debt pits. Alternatively, people spend themselves silly without stepping back and realizing their savings is staying at $0 by living larger than they should if they want savings to go up.
Yet, 4 out of 5 Americans live paycheck to paycheck, and 3 in 10 have no emergency savings at all.
The numbers will vary based upon what study/report you read, but the message is clear that the majority of people are not making financially sound decisions.
Living paycheck to paycheck can happen even if you're making 400-500k. I've seen people do it.
You can have no emergency savings (at all) and be making $100k+.
It's pretty easy - spend everything you have (often on "dumb" things like expensive takeout for every meal, a lease on a car you don't need, more house than you can afford, refreshing electronics constantly for no reason, etc.).
The reasons usually boil down to lack of emotional regulation and/or bad spending habits, not lack of income - though it is easier to do with low income, as the margins are smaller.
Same thing in Seattle, Los Angeles, Portland, NYC, Chicago, pretty much any major city. Which is also where a lot of economic activity comes from.
I feel like every time I tap the screen while using a delivery app I get charged a dollar
This comes out to a real marginal difference of about 4-6$, which I don't really care about.
Edit: people keep mentioning markups. I see those much more often on GrubHub (actually, every place is marked up on GrubHub except big chains), but don't see markups my regular set of local restaurants.
Seems like free DashPass is valid only for a year.
> Complimentary DashPass Subscription for Chase Sapphire Reserve and Preferred cardmembers: Your Chase Sapphire account will receive one complimentary DashPass subscription from DoorDash for at least 12 months when the subscription is activated by 12/31/21. After the DashPass discounted period ends, you can choose to continue to be enrolled and charged the then current monthly DashPass rate
They also have an offer for the Freedom and Slate cards (which have no annual fee) albeit free DashPass only for the first 3 months and a 50% discount for the next 9. So, still a good deal overall when compared to paying $9.99 every month. Thanks!
In many cases there's a markup on the food over the restaurant's prices. There's delivery fee that's generally $2-$3, a service fee that's hidden in the "taxes and fees line item", not to mention a small order fee etc on some orders. And, of course the tip. This I do not understand. It went from tipping the waiter a bit more because you were well taken care of at the restaurant dining experience, to pre-paying a tip to the driver before knowing if the food's good or if the delivery is late etc. The restaurant doesn't get any of the tip. Anyway, a subsided food delivery that you got is not sustainable.
To be honest I do not understand the tipping culture at all. Its expected to tip a restaurant staff if you eat at the restaurant, but not if you get the food delivered. But, expected to pre-pay a tip the driver who delivered the food (irrespective of quality of food or delivery) but not the USPS/UPS/fedex driver who delivered anything else even if he/she carries a heavy package over a flight of stairs. Its expected to tip a uber/lyft driver even on a shared ride with other folks but not a bus/metro/train driver. None of it makes sense to me :)
I'm not defending the tipping pay structure, but it's certainly not some confusing mystery.
On a side note, I've noticed that most restaurants around me will add $3-4 per dish when using Uber Eats vs. just calling them directly.
Sometimes groups will order, but in my experience they do not.
Doordash is really hard for me to justify, I only use it when given gift cards etc. It can literally double the price of a meal (a $20 mcdonalds order becomes $35-40). Even during covid I still generally do curbside because that feels like a very minimal risk.
Post-covid, I'll probably use instacart/shipt maybe once or twice a year - I'm 100% sure there will be times where for whatever reason I just can't get out and the world will end if we run out of milk for the kids. But when there's not a pandemic on, taking the kids to the grocery store knocks out so many birds with one stone:
* kids get to get used to the grocery store experience
* we get groceries
* my wife gets a break
Also noteworthy: Shipt didn't respect any of my store's B1G1 offers. It didn't even appear in their system while shopping (Instacart did). I actually know a Shipt shopper that was getting free stuff all the time because of this.
If you're strapped for time but still want to stay safe and save money, consider stores that have curb side service like Wal-Mart. You get in store prices with no extra fees and no-contact hand off.
Not sure about prices but I didn't really have a choice.
FWIW though I do mainly use instacart, since my amex card counts them as a grocery store/supermarket, I get my 6% cashback.
"Amazing that people have normalized..." something that is ridiculously convenient and comes at a marginal additional cost? I'm no more amazed at that than wash-n-fold laundry or taxi service.
Isn't the point of takeaway that you get hot fresh food without having to prep it? 'Stocking up' on takeaway seems counterproductive.
Which the vast bulk of people don't use either. I'm sure there's some market and I've seen market research that suggests grocery delivery is something that will hang around at higher levels post-COVID. (Though the same report also highlighted home cooking, not food delivery.)
I admittedly don't have great food delivery options where I live. But getting most prepared food delivered isn't something I find very interesting at all.
Who the hell said they did? These are long-standing and economically viable businesses - that was my only point.
DashPass is $10/mo which which turns every delivery into ~$1+tip. The idea that I can buy 30min-1hour of a real human's time and labor for $3-4 to deliver me food is silly.
My usual Indian take-out order is $16 if I spend 40 minutes for the round trip or $18 to get someone to deliver it to me.
Delivery fee + service fee + tip meant I still ended up paying $18 for the service. I can't imagine I'd ever be a buyer at the full price.
Also in my experience (in Chicago) the food in the app costed $1-2 more per item (this wasn't listed anywhere, but if you compare the cost with what the resturant charged it was a lot more).
Also there was at least one resturant that I visited that would give you less if you ordered through a delivery app to make up for the fact that they had to pay a fee. This is shady and shitty on the resturant's part and not really DD's fault (although frankly it's kind of predictable) but it was still a thing that happened when I used the app.
I haven't used it for about a year though (because of the above shady practices) so they might have changed.
I don't like that they inflate prices and will not order directly from them because of it. They should be transparent about how much their service costs rather than hiding the true cost of their service in the item prices. I feel like it's likely their fault and not the restaurants since it seems like every restaurant has inflated doordash prices. My only theory is that they may be charging the business service fees in addition to the service/delivery fees they charge the customer.
They do white label delivery for a fast food restaurant I order from. I've had it take 2 hours to deliver multiple times and even had one order get cancelled by doordash after they couldn't get anyone to pick up the order. Most of that delivery time is made up of it switching between multiple people who they expect to pick up my order. Once someone actually picks up my order it only takes about 5 minutes to get to me.
- $2.03 for the burrito (vs 1.29 in store)
- $2.99 for fees and taxes
- $3.99 for the delivery fee
- $2 for the dash tip??? Is 20% customary? It's the lowest dash suggests.
- $11.01 for your burrito
It's ludicrous. They're catching you at every point to extract cash. Yes, a human delivered something to you, but for the cash conscious, this is an absurdly expensive tilt.
- $15+2 for say, pad thai + taxes - $4 for delivery - $3 for tip
I'm not saying that paying 40% extra for food is a reasonable decision for most people, but (a) I can afford to pay $7 to avoid traveling across town for a specific meal I want, and (b) these numbers get even better with a larger order. If you're the consumer that wants a single $2 bean burrito, the market answer is clearly that you should put a dozen in your freezer and microwave them yourself.
I also think the Doordash business model is not super valuable, but it clearly has some value. Restaurants make an increasing portion of their revenue from delivery (especially during COVID), and having to staff, manage, and route a delivery person themselves is not their core competency. Does signing up with Doordash marginally increase revenue? Yes.
Obligatory note that many people order more than one thing, and that some people eat things that are more expensive than burritos. The fees to order a single $7 burrito and 5 x $20 meals are similar in absolute $ terms. And of course, many of the popular services have effectively capped delivery fees at ~$10/mo so ordering once weekly brings the delivery fee down to ~$2.50.
If I'm paying a delivery fee + tip, you better at least get it to my door. That has less than a 50% chance of happening with these services. These days, it's cheaper, faster, and safer to pick it up myself.
>Amazing that people have normalized paying for the insane number of fees plus tip to get one thing delivered.
By the same token, you can ask why people eat out in restaurants given how much more expensive it is compared to cooking at home. I take your point about the expense though. If you habitually get delivery, it will add up to significant sums .. but then again, so does eating out.
There is no middleman sucking a bunch of money out of my community.