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Comment by walrus01 | Hacker News Reader

For vehicle based delivery in cars...

Apps like these are relying on people who've already sunk some huge amount of money into a car and are not doing the fully loaded cost per mile calculation of operating a car in stop-and-go delivery service in an urban environment.

If you calculate the purchase cost of car, insurance, fuel, repairs/maintenance, tires, oil changes, depreciation etc, it's quite bad.

The actual amount of money earned by the delivery person after subtracting the fully loaded cost of the car is often near minimum wage in some states.

Much the same as Lyft and Uber actually.

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The cost per mile for the class of people making these comments is not the same as the cost per mile for the guy doing delivery work.

You probably drive a nice new Camry or some other vehicle that is far from the "floor value for A to B transportation in a given mechanical condition" and will fall in value precipitously as it hits various milestones. The delivery driver has some 15yo car with over 150k on it where value is purely dependent on mechanical condition.

You probably replace your tires when your mechanic tells you. These delivery driver runs them until they're bald.

You take your car to the premium mechanic. The delivery driver has "a guy" who does 99% of his basic maintenance for cheap and only ever has big stuff done at the mechanic.

These people (the ones who understand the economics of what they do, which is most of them) don't maintain their cars like techies do. They take a page out of the age old "pizza delivery" playbook. With the highly variable nature of distance driven and compensation these people are generally well aware of operational costs vs gross income. You kind of have to be.

when I say that a delivery driver has sunk some huge amount of money into a car, relative to their annual income, it's probably proportional to what I pay for a modern japanese car.

if you make $32k a year, a $4000 corolla is a lot of money.

it is not at all the same economics as the actual historical method of pizza delivery by cheap crappy car, because of the greatly increased cost of fuel (while delivery driver wages are nearly the same now as they were 20 years ago), and the fact that the traditional delivery driver is paid almost entirely in cash.

It's a car. Not a semi truck. The delivery driver isn't treating the car as a capital investment that is used to make money delivering stuff. The overwhelming of them are just taking advantage of a car they already have.

that's exactly what I'm saying, they're effectively using up the fractional lifespan of the car they already have sunk money into, and already possess, without doing the fully informed calculation on what it's actually costing them.

taking advantage of a car you already have still has a calculable financial cost in how much fuel and wear/tear you put on a car doing a theoretical 8 hour delivery shift.

app based delivery service things are relying upon the delivery people not calculating the fully loaded cost of their time and vehicle together to determine their own real net wage.

Put another way, the cost of operating a car that involves any significant amount of mileage over time--especially in areas that don't see a lot of corrosion due to salted road roads in winter--is mostly per-mile costs not time-based. If you drive your car a lot, there's very little free money that you're tapping into.

You just don't get it. Even after amortized maintenance you're making money doing delivery. Not much, but you are. Certainly on the order of min-wage on a bad day and much better on a busy day.

If you want more money you have the choice between picking up an inflexible 2nd or 3rd low hour job vs filling that time doing gig economy crap using stuff you already own (a car). Gig economy crap might not pay well after expenses, but is still very much net positive after expenses.

They know that cars cost money per mile to run. They might not know exactly how much but they have a pretty good idea on an annual basis. If picking up a crappy min-wage job that requires you to keep to their schedule is the alternative then gig economy crap is often the least worst option.

These people aren't idiots. Stop acting like they are. This is one of the things HN does that really pisses me off. As a rule poor people are much, much, much better at tracking cumulative expenses than the kind of people who shop at whole foods and only have a vague idea of what things cost because they can afford it either way and don't actually need to hone that skillset.

All of your comment reads like some excuse why VC funded food delivery app companies should continue to abuse low wage workers, because of course they're fully informed and know what they're getting into. These are the people who ultimately often end up with something like the WA state minimum wage after all expenses are subtracted.

I didn't say that they're idiots, my point was that they're being taken advantage of in the current economic situation that they exist in.

Maybe you should question why these people are apparently forced to pick between nothing other than an effectively-minimum-wage gig economy job with no benefits or job security, or a minimum wage job assembling food at taco bell or something and nothing better, effectively operating as a permanent underclass. From the way you describe it you seem to be totally okay with that situation in the economy. I'm not.

> If you want more money you have the choice between picking up an inflexible 2nd or 3rd low hour job

oh for fuck's sake, why don't you just tell people that they should lick the boots of their gig economy no-benefits "employer" some more? get a 2nd or 3rd job just to exist in this late stage capitalist hellscape with 4 roommates in any major city.

IDK what your dumb deal is here.

The gig economy crap isn't bad. It's just another set of options in the sea of crap jobs. If anything it puts pressure on jobs that pay a little better to be more flexible.

If these people really thought they were getting the shaft they'd have gone and got other equally crap jobs. We're leaving what was probably one of the lowest unemployment periods in US history. It's not like the bulk of these people couldn't have been mixing paint at Lowes, pushing a broom, manning a cash register at Walmart, schlepping boxes around a warehouse or stripping drain plugs at Jiffy Lube had they felt so inclined to. But instead they took these gig jobs? Why? Because all things considered it was less crappy than the next best also crappy option.

>oh for fuck's sake, why don't you just tell people that they should lick the boots of their gig economy no-benefits "employer" some more? get a 2nd or 3rd job just to exist in this late stage capitalist hellscape with 4 roommates in any major city.

Stop being dense. Nobody is falling for it. These gig jobs are not typically primary jobs. They make shit primary jobs because the income is variable week to week. They're typically people's 2nd or 3rd job that they can schedule around their primary one.

Your disdain and callous disregard for the rights of low wage earners living paycheck-to-paycheck or worse is clearly evident in your classist comments on "pushing brooms", "schlepping boxes" or "stripping drain plugs", I will not engage further.

I used to push brooms, schlepp boxes and strip drain plugs. And I'd go right back to that last one if it paid what tech does (actually I lied, I'd go work in a junkyard, can't strip the drain plug if you never put it back and better work atmosphere).

If you want to sugar coat the reality of these jobs you're doing it for yourself, not for them. These jobs are low skill, low pay and low status and the people doing them know it. They have bigger problems then whether specific language choices do or don't offend the sensibilities of the ivory tower crowd.

But pizza places have been doing delivery for decades with employee cars. Why is it now "bad" when a tech company does it? The scale?

a) traditionally, the delivery driver keeps the entire tip in cash. there's no bullshit "delivery fees" added to an order which actually don't go to the driver.

b) it used to be a lot less costly to operate a basic car in the US/Canada on a dollar per mile or km basis

To point A, delivery fees have been around for a while and have never gone to the driver. Is there some app or scenario in which the driver doesn't keep the entire tip? Because I'm not aware of any.

To point B, how is this tech-specific? The question was about why someone driving their car to deliver for Domino's is OK but driving their car to deliver for DoorDash is exploitation.

point A, app based food delivery services with "delivery fee" charged to the customer and not passed on to the driver is a new thing.

15 or 20 years ago if you order a pizza from your local pizza place, the price you pay for the pizza is fixed and known, and you tip the driver in cash. there's no extra 3rd charge line item for "delivery" anywhere.

point B, the advent of app based food delivery in the past 8 years happens to coincide with greatly increased cost of operating the car. I was explaining why traditional method of delivery used to be much more economically viable. Two things happening simultaneously, increase in cost of fuel and operating cars and the increased popularity of app based food delivery does not mean correlation equals causation.

tips weren't that good back in the older days. most people only tipped a $1 if anything and thought the delivery fee went to the driver which in a way it did because they usually got paid hourly plus a small fee.

I'm guessing at least part of the reason is that old school delivery driving doesn't have to be profitable, only the whole business does. If you have a healthy margin per pizza, that margin can subsidise the loss made per delivery. You just have to make sure that the profit from the increased number of pizzas sold makes up for the cost of delivery and you're good.

Food delivery services, on the other hand, have to make the delivery itself not only profitable, but profitable enough to produce a somewhat livable wage for the driver once expenses like gas and car wear are accounted for, and the whole company has to live off of whatever it can siphon off from what the drivers get.

$300,000,000 in investor money to earn back, software people earning $300,000/year, managers for them, etc. Divided amongst a lot of premises, yes, but still expensive. Instead of just a couple guys answering a phone.

Pizza packs well, is ordered in large quantities, is easy to store on the seat, is fairly high margin, stacks, and the stores doing this delivery have dedicated drivers with good estimates for how much volume they'll be doing in a night and a fixed supply of drivers with guaranteed wages. They also didn't deliver as far.

App drivers are constantly playing this game of guessing where the next order will come from and where they'll end up.

Also Pizza companies doing their own delivery may be happy with the delivery fee being less than their cost of delivery if it gets them more orders than they would otherwise as long as the order is profitable. e.g. $10 pizza with $2 delivery and $8 cost of production and $3 cost of delivery in range. Each hand picked up pizza makes $2 profit, each pizza delivered makes $1, but if the amount of net new orders from doing delivery is >2x the amount of people that switch from pickup to delivery then the business profits.

In the app case, the business may still benefit (except now the apps have pressure to try extract discounts from the business), but that -$1 for delivery is either being subsidised by VC funding which won't last, or by paying the delivery staff less than their real costs.

Pickup customers subsidized the cost of delivery. drivers earned money folding boxes, delivering flyers other prep work. and drivers would take upto 4 orders at a time.

> Why is it now "bad" when a tech company does it? The scale?

I think it's because of how badly they're doing it. They're operating at a significant loss, with unhappy customers, unhappy drivers, unhappy restaurants, and poor service.

There weren't any significant problems with the legacy model. Pizza delivery staff didn't try to talk you into accepting a cheese pizza instead of pepperoni. They didn't lie about their credit card machine not working. They showed up just like the new services, and specifying the order in English usually also worked well. Which were all problems with taxis pre-Uber.

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