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Comment by googlryas | Hacker News Reader

I assumed this was one of those "true stories" that content marketers put out to push their newsletter, but I see in an update he actually names the restaurant that allegedly did this.

Would this be fraud? Not necessarily ordering pizza from your own restaurant, but, say, ordering pizza from your own restaurant but only putting dough into the boxes?

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> Would this be fraud?

No. This is not fraud.

Doordash and the pizza company had no contractual relationship. The pizza company did not contract with Doordash to run an "$8 off" pizza promotion. Rather, Doordash, in an attempt to claim a near monopoly on the food ordering market, chose to sell food at a loss. The goal of this strategy is to get consumers used to buying from Doordash (while prices are low). Once a sizable percentage of orders are going through Doordash, Doordash can raise fees and refuse to list companies that don't pay up. The only way to get this sort of market share is through tactics like the one described (selling food at a loss).

When the pizza man chooses to buy his own pizza on Doordash, he is merely affording himself of the same cheap pizza that Doordash is providing to anyone else. Doordash is behaving rationally here. They need to capture the mindshare of users. By providing pizza delivery at prices that are lower than economically viable, Doordash will get this. The pizza man is simply choosing to benefit while he can. Long live the pizza man!

If he wanted to really stick it to them, he'd complain that his pizzas were just dough and get himself some doordash credits :)

> Doordash and the pizza company had no contractual relationship.

Don't Doordash and the pizza company owner have a contractual relationship when the pizza shop owner agrees to the Terms of Service for using the Doordash app to order food?

I have no clue if the doordash TOS forbids such usage, but it might?

No, that was kind of the point. Doordash listed them without the restaurant's approval. In fact it was a surprise to the pizza place they were on DD.

The restaurant agrees to Doordash’s terms when they buy pizza, not sell.

The restaurant did not agree to anything, at most the person ordering food agreed to something.

> the person ordering food agreed to something

That’s… the restaurant owner, though.

Which is legally distinct from the resturant.

If the owner agreed not to create a nuisance and they’re order creates a nuisance then they’re not meeting their agreement.

In your hypothetical case they could sue the owner but not the company.

> at most the person ordering food agreed to something.

That's the part I'm talking about. The restaurant owner agreed to something in order to use the app to buy pizza.

It's a bit bizarre that you are claiming this relationship might exist, when you could simply read the TOS and see if such a clause exists.

I'm not a lawyer, I can read the TOS but I'm not qualified to understand it. TOSes are a farce but that doesn't mean they can't be enforced.

EDIT: But I'll humor the premise, here are some lines from the customer TOS:

> (e) You will not use the Services to cause nuisance, annoyance or inconvenience.

> (q) You will not try to harm other Users, DoorDash, or the Services in any way whatsoever.

> (t) You will not abuse our promotional or credit code system, including by redeeming multiple coupons at once or by opening multiple accounts to benefit from offers available only to first-time users.

> You agree that promotional offers: (i) may only be used by the intended audience, for the intended purpose, and in a lawful manner;

What are the actual legal implications of these lines? I have no clue. Could they be construed by lawyers to forbid this scheme? I don't know.

It would be really interesting for DoorDash to argue in court that ordering food from them and then paying for it somehow harms them.

But in case you really can’t tell, no the terms don’t apply here. Lawsuits generally assume people have put on their big boy pants, if sell a painting for 10$ that ends up being worth millions that’s on you. You decided 10$ was a reasonable price at the time of sale and you don’t get to say but your honor I am an idiot.

Seems like a deliberate nuisance?

He was making individual orders of a large but not extreme size every few days. That's hardly a nuisance.

Seems like a meaningless distinction? The owner knows he’s being an ass - he wrote a whole article about it.

Let’s assume a random person across the street happened to make identical orders exactly when he did through random chance.

Could Door Dash argue that person was being a nuisance?

Law looks at intent.

Not for determining if something is a nuisance.

It's like harm, you are either inconvenienced or you arn’t.

> "no the terms don’t apply here"

Is that your legal opinion as a lawyer?

It says that customers agree to only use promotional discounts "for the intended purpose"; what does that mean and how can you be sure a business owner using promotional discounts to profit from arbitrage is the "intended purpose" of the promotional discount?

This stuff isn't complicated, “Intended purpose” is the obvious use aka making orders.

Finding the cheapest order possible and making repeated orders to DOS the company locally wouldn’t be.

This actually wasn't listed as a "promotional discount". Doordash just listed the pizza as cheap. And the pizza man decided to enjoy the cheap pizza.

The restaurant was represented by the person ordering the food. That person had to agree to TOS when downloading the Door Dash app. That is what is being considered.

Owing a business doesn't mean every action you take represents the company.

Not necessarily, considering how DoorDash adds restaurants to their site without their knowledge and foists the customer service burden onto them.

e: Yes, the original article makes it clear that he didn't sign up for this: https://www.readmargins.com/p/doordash-and-pizza-arbitrage

I don't mean a TOS between Doordash and the restaurant, I mean the TOS between Doordash and customers of Doordash using the Doordash app. The pizzeria owner signed up to Doordash as a customer, in order to buy pizzas.

And he honored this contract. He paid $16 for each pizza, just as Doordash offered. The fact that Doordash was selling pizzas for a loss was Doordash's problem, not his.

> And he honored this contract.

I don't know, what does the TOS actually say? The app's TOS might say something like "you can't use this app to order food from a business you own", or something else that might forbid this scheme. Maybe it doesn't though, I don't know and haven't read it, but I think it could.

I have no reason to believe the TOS contains a clause like that.

I’d argue it’s clearly a ‘nuisance’, which is prohibited by the TOS.

There is one Term that is probably applicable, but this was certainly not the case they were anticipating when they wrote the term:

> (f) You will not use the Services, or any content accessible through the Services, for any commercial purpose, including but not limited to contacting, advertising to, soliciting or selling to, any Merchant, User or Contractor, unless DoorDash has given you prior permission to do so in writing.

This hinges on if trying to make money by using the service as a consumer counts as commercial use. But you can tell they were thinking about very different scenarios when they wrote this term.

If you access any of our websites (or other methods) … you have read, understand, and agree to be bound by this Agreement - https://help.doordash.com/consumers/s/terms-and-conditions-u...

The T&C attempts to bind “merchants” to the “Self-Delivery Product Addendum”, which states: Merchant shall ensure that pricing of Merchant Products under the PickUp Program is not greater than the pricing of the same Merchant Products for pickup (a) in-store - https://help.doordash.com/merchants/s/us-addendum-self-deliv...

So it’s expressly prohibited. But are they bound to the additional merchant provisions if they never signed up to be a merchant?

Of course not. He’s not acting as a merchant when he orders pizza from himself on Doordash and can’t be bound by contract terms he never agreed to. Doordash didn’t ask him to sell pizzas on doordash, they decide to list his products themselves below cost. He doesn’t have an agreement with them except as anyone else ordering food from doordash, or doordash ordering food from him as anyone else could. Doordash doesn’t bind him contractually any way here.

Uh huh. There’s also this in the T&C: You will not use the Services, or any content accessible through the Services, for any commercial purpose, including but not limited to contacting, advertising to, soliciting or selling to, any Merchant, User or Contractor, unless DoorDash has given you prior permission to do so in writing. the pizza shop owner used it for the commercial purpose of selling pizza to himself.

In English law, if it’s dishonest, it’s fraud. The pizza shop owner’s conduct was plainly dishonest by the standards of “ordinary decent people”. Where was this, anyway? What’s the local standard? Probably a variation of exactly the same.

I like DoorDash’s chances on this.

Then you are a real advocate for predatory marketing or doordash or you are just a pedant...

Two wrongs make a right?

I was providing an analysis of the situation. The name calling is not appropriate.

I just scanned through the TOS. The only thing I could find that's related to this at all is a clause saying that you won't submit a review or rating "for any Merchant or business for which you have an ownership interest, employment relationship or other affiliation or for any of that company’s competitors"

Nothing about not ordering from your own business.

I feel like such a clause, even if somehow enforceable, could easily be worked around. The owner's child could place the order. Or the owner's spouse. Or a close friend.

Clearly the better option for Doordash is to simply not engage in predatory pricing to begin with.

Still probably fraud since done with intent.

I don't think you could add such language to a TOS and have it be legally binding.

Potentially yes, and I think people are skimming over this because they want to agree with what the shop owner is doing (because Doordash sucks and is a predatory business).

To buy from Doordash, you have to agree to some TOS on their app. Sales, as has been pointed out, no. But buying, yes. He could be violating that TOS, if they try to prevent this sort of thing. Since this loophole was reported on in a fairly well-known publication years ago, it isn't ridiculous to think they have something in there.

IANAL, but I wonder if he could coordinate with somebody to have them order the pizzas instead, so he doesn't have to agree to anything.

A funny idea might be to start offering Doordash's discount to in-person customers who were going to buy the pizza anyway. "Just order on this stupid app and set your delivery location to our address, then we'll Doordash it across the room or whatever."

A further extension of this would be, if he can figure out what Doordash is parsing wrong on his online menu, then maybe he could try to work out how to get that field to show up as $1. I'm not sure if it was this one, but there was some place that had had their fancy custom pizza listed with their plain cheese pizza price. So maybe they could start their menu with something like:

Plain pizza raw (subheader: It is literally a lump of uncooked dough, don't buy this): $1

> Rather, Doordash, in an attempt to claim a near monopoly on the food ordering market, chose to sell food at a loss.

This is called price dumping for anyone that wants to read up on it.

and it's illegal in some places

Link please

https://en.wikipedia.org/wiki/Predatory_pricing

I believe they only applies to a company in a "dominant" position

Gas stations have been successfully sued under such laws. So clearly, there's some flexibility when it comes to the definition of dominant.

i don't know the case behind this example, but i can imagine that if a small city only has a few gas stations, even just one undercutting all the others, forcing them to close would be a form of domination.

so basically (and i am just guessing here) a company becomes dominant the moment its competitors start going out of business because of this companies predatory pricing.

Also, https://www.hg.org/legal-articles/sales-at-a-loss-in-belgium... .

Unfortunately it's usually only illegal when a monopoly or other dominant company does it. SV seems to have worked around this by funding "startups" so much that they have the capital to engage in dumping before becoming dominant in an industry.

at least in the US doordash already reached more than 50%. i believe if it can be argued that it was only able to achieve this through predatory pricing then at this point it should be possible to stop it from continuing that pricing strategy.

> Would this be fraud?

It's hard to imagine. The restaurant clearly has no contractual relationship with Doordash. I don't know why they even bothered with the dough and boxes.

If they shipped empty boxes the driver probably would have noticed and brought it to someone's attention. either refusing to deliver or ending the promotion early.

> why they even bothered with the dough and boxes

So it wouldn't be fraud. They had to deliver what was ordered.

You always enter in a contractual relationship with companies like Doordash if you buy anything through them - which they clearly did here. Whether or not this scheme breaks said agreement could only be answered by checking it closely, but if their legal department is worth anything there's probably some general purpose safeguard against abusing the service.

Ah yes the general. "Ultimately we can choose to screw you however we want, but we've made some sort of blanket clause in this that if you try something that is a breach of contract"

Or as the The PHB in Dilbert once said "It's better than legal we are using the law to keep justice away."

But Door dash also entered a contractual relationship when it bought pizza from the pizzeria. Did they read that contract clearly?

I wouldn't bet on a small pizza place having a dedicated legal team that can craft clauses to keep this kind of abuse away.

Enforceability and recourse are hurdles to punishing the pizza parlor with anything more than denying them a listing if at some point they wanted one. The pizza parlor did not ask to be listed so recourse seems especially weak.

For this to be fraud someone would have to be defrauded.

Certainly the owner was not defrauded, nor anyone working with him to purchase the dough. Nor was Doordash defrauded: they offered to sell anyone pizzas for $16, and the owner took them up on the offer.

Doordash defines itself as a technology company responsible for connecting customers with restaurants using dashers as contractors for delivery and itself providing logistics for ordering, paying, and routing dashers.

Can you imagine what the press would do if Doordash actually sued the local pizza place because it was dumb, or filed a police report? I think it wouldn't be pretty, and the stock price could go down, and doing something that makes your stock go down can lead to an investor lawsuit.

Not a lawyer, this is not legal advice, I'd love to see a lawyer analyze this though.

It may or may not be fraud as the letter of the law, but this is definitely the shadiest part of the story. Also a pretty lame thing to do.

It would have been much more elegant to add some crazy overpriced option to your pizzas where you could make a huge margin. Like "gift wrap +$100" which would mean putting a $0.01 ribbon around the box. You could make much more money this way from Doordash with less hassle than switching certain orders to plain dough.

Would this be fraud?

IANAL, but I am going to go against the prevailing trend and suggest that it might actually be fraud. In ordering the pizzas from Doordash, he misrepresented himself to Doordash as a genuine customer (for financial gain).

As far as not actually delivering complete pizzas, that may not be fraud as he did not misrepresent the product to . . . himself. However, I could also see an argument for it being fraud as Doordash bought pizzas from him, and he did not deliver pizzas (regardless of the fact that Doordash then sold the "pizzas" back to him for less).

I mean, if the customer doesn't complain, why would Doordash care?

>Would this be fraud?

It might be fraud. I doubt the damage would be worth the possible backlash for doordash to pursue this.

No.

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