Apps Are Helping to Gut the Restaurant Industry | Hacker News Reader

Apps Are Helping to Gut the Restaurant Industry

nytimes.com

23 pointsmitchbob9 comments

This is like what happened to newspapers with the rise of the internet. It was great for the top few - the NYT, the Washington Post. But why would you read the Cincinnati Enquirer if it was equally convenient to read the Wall Street Journal?

Similarly, the rise of DoorDash etc is going to be bad for most restaurants. If there are 100 Chinese restaurants in my city, why would I ever order from one that wasn’t one of the best? Any restaurant whose food isn’t good enough to win on DoorDash is going to be hurt when more people choose delivery.

It will be great for some, though. The best restaurants with big delivery volume will be able to expand and improve their margins by operating at a larger scale.

Is that how restaurants work in reality? Restaurants are very different to newspapers.

Suppose there is a "best" Chinese restaurant in a city. Is its food still good if it has all the way across the city to reach you? How long does it take to arrive to your house? Can it produce a volume of food to feed an entire city?

OK, maybe this restaurant has many locations. You're now proposing that the best Chinese restaurant in a given city is a chain. Chain restaurants are not historically known for offering the best food available. And now you also have variation across restaurants, unless your restaurant is literally just Panda Express, where standard food comes frozen in a giant plastic sack.

Many colleges have started canceling formal courses in linear algebra because we have a video recording of Gilbert Strang, but few cities are in danger of losing their Chinese restaurants because a single one is so obviously the best.

https://get.rushable.io is helping change this for Houston, TX at least - 0% commissions and just $80/month.

I'm not affiliated but I do think their software works quite well from the eaters' perspective. Would love if they got a bit more traction, I think it would be great for both restauranteurs and customers alike.

This is completely backwards. Restaurants don't have to partner with delivery apps. If they're not organized to make a profit given those margins, they should stop participating. If they can't turn a profit, they should naturally go out of business.

Likewise, no one is forcing people to use delivery apps. The apps provide a benefit of convenience without a huge cost overhead. If people don't want to use the apps, they shouldn't use the apps. If they can get higher value by going to restaurants directly, rational customers will do that.

Delivery apps are simply helping to sweep the market clean of inefficient mom'n'pop food shacks and helping us get to healthier business reality where restaurants are better aligned with diners. Have you seen Gordon Ramsay's Kitchen Nightmares? Most restaurants are run by insane people who have no idea what they're doing!

If diners really expect undeliverable value and restaurants must be held together with duct tape and baling wire, it is an unhealthy market and will naturally destroy itself.

> without a huge cost overhead

DoorDash and Uber Eats are extremely expensive.

So is running your own delivery service. And if a restaurant wanted their delivery service to be as good as Uber Eats or DoorDash it would be more expensive than Uber Eats or DoorDash.

The point is that even good restaurants operate on margins that can't afford places like doordash to take 10-20%. Diners expect what's offered to them in the market, and if doordash is offering me your restaurant quality food delivered to my door for $2 then that's the value. It doesn't matter to the customer that it's the result of several billion dollars of venture capital with the expectation that to make that investment worth while the entire western world would need to become indentured servants.

Sure, so diners should look at Doordash, see that all that's available at a sustainable price is Taco Bell, and decide whether they want Taco Bell or not. Restaurants that can't afford to be on the platform shouldn't be on the platform.

Also, it doesn't cost a billion dollars to open a restaurant. Restaurants are wasteful, but not that wasteful. And diners don't care how much your restaurant cost you to open, or that you had to get venture capital to do it.

The larger services engage in predatory practices.

From the article:

"With deep pockets, the dominant app companies have devised ways to put pressure on restaurant owners to sign contracts with them, including downloading menus without restaurants’ consent and then offering their own delivery. Grubhub registered internet domain names of tens of thousands of independent restaurants. Legislators should curtail such anticompetitive practices."

Reply on news.ycombinator.com