Comment by wzwy | Hacker News Reader

Comment by wzwy | Hacker News Reader

> In large part by not asking restaurants for permission to list them on DoorDash's platform and publish their menus. A lot of restaurants complained about this but DoorDash didn't care. In cities like Seattle, this was made illegal but by then DoorDash was too big. A lot of these VC funded companies use shady tactics to grow and usually have powerful allies in the right places. Btw, AirBnB was also notorious for spamming Craigslist using bots to bootstrap their two-sided marketplace

How true is this?

What I understand is DoorDash lists restaurant and their menus without permission. Does that mean DoorDash doesn’t charge a listing-fee and gets revenue purely from those who order food?

Yes it’s true. Basically DoorDash creates a fake website for the restaurant and even sets up a phone line to take orders. The order is then forwarded to the actually restaurant who aren’t aware that this order is done through DoorDash. If there are any issues i.e. wrong order forwarded, too busy for phone orders so long prep time, or out of a particular menu item, the restaurant gets the blame and the customer has no idea that they didn’t order with the restaurant directly but rather through a middle man. This has little upside for the restaurant and plenty of downsides.

DoorDash also sets prices independently of the restaurant menu. In some cases this means DD prices are higher than the store, in others DD prices it lower than the restaurant, and takes a loss in hopes of gaining market share.

This results in fun opportunities like Pizza Arbitrage https://www.readmargins.com/p/doordash-and-pizza-arbitrage

That's amazing. didn't they do that in Silicon Valley show ? didn't think it was real

Yes. In these cases, which aren't all - DoorDash does have contracts with many businesses - DoorDash is acting as a reseller, purchasing food at retail and selling it on to the customer for profit, at least when they get the prices right - www.bbc.com/news/technology-52724062

Reply on news.ycombinator.com