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Comment by mulmen | Hacker News Reader

Gig work in general and food delivery specifically is the poster child for the tragedy of ZIRP. These companies somehow took what pizza shops and Chinese restaurants have been doing profitably for decades and with the power of unlimited free money… made it a losing proposition for restaurants, couriers, customers, governments, and even themselves.

Food delivery isn’t a technology problem. It’s a trivial hiring and logistics problem. One that can literally be solved successfully by teenagers. There might have been a market for an ultra-lean driver-as-a-service with an SLA suitable for pizza delivery but I’m not even sure that’s viable.

Pizza shops are vertically integrated, staffed by entry level workers, and still have razor thin margins. It’s not a career, it’s a way to build skills and get a better job.

What an incredible blunder.

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On paper it's attractive; there were still loads of restaurants that didn't do delivery, because they didn't want to do the hiring and admin of taking them. These companies came and offered them the logistics, tech, vehicles, staff, apps (= discoverability), etc, without the risk of hiring people themselves but not having enough work for them. It was very attractive for restaurants that didn't do delivery yet.

And on paper it was attractive for delivery people, who in theory have jobs all the time instead of only a few hours at the busiest time of night, to be sent home when it went quiet.

But that was all on paper. In practice the intermediary company creamed off the money that would otherwise go entirely to the restaurant and the delivery person. And it wasn't enough.

Who would've thought that cramming a whole team of developers and expensive cloud resources on top of the notoriously thin margin food business could have failed?

I remember when Silicon Valley made fun of the concept 10 years ago and I have made a point of never installing any such apps on my phone.

You missed out, I got a lot of convenient dinners for dirt cheap on the VC dime.

Good for you

The food delivery businesses like Deliveroo and Uber Eat have been fantastic for consumers.

Suddenly we have access to a whole range of restaurants, and even convenience stores, instead of only the dodgy takeaway pizzas, kebabs, and 'Chinese' for what is a very cheap price.

This may not be viable long term because of the low productivity of riders but it's great while the VC money lasts.

Sure it’s nice when the VCs are buying market share but there’s not a profitable business here. Best case you still have some legacy delivery shops when the VCs get tired of burning cash.

In my area both DoorDash and UberEats are ridiculously expensive. GrubHub seems to be the most reasonably, fairly, and transparently priced, but even then it’s a significant premium for a worse experience.

I could just have Amazon, Safeway, or WalMart deliver me frozen microwaveable or stovetop dinner with the rest of my groceries. I would get better food for less money with similar effort at the price of a little planning ahead. When delivery apps charge what it actually costs alternatives become far more appealing.

They are not "buying market share", they are enabling a service that did not exist before. Everybody wins expect perhaps eventually the investors...

Food delivery existed long before these companies. They’re literally spending money to buy market share in the hope they can then increase prices and turn a profit. This is exactly what Uber did to cabs. And what these companies have already done in existing markets.

The vast majority of the restaurants on Deliveroo, Uber Eats, Just Eat etc. in the UK did not (and still do not) offer delivery themselves.

I would say that in the UK it was really only pizza places that offered delivery.

Now with these apps you can get virtually any type of cuisine delivered from a wide range of restaurants.

Right but the food is bad when it’s delivered. That’s why delivery wasn’t offered in the first place.

Considering how popular those services are, I think people are fine with it.

The issue really is only profitability: a single delivery is expensive in labour cost while consumers do not want to pay a lot for it.

Exactly. People are only fine with it when prices are subsidized by venture capital.

Agreed, and even for those that did offer delivery before, Deliveroo/UE is a significant improvement. My experience of restaurant-led delivery is longer dispatch times, while they wait to build up a significant batch for delivery, and then them struggling to find your address half the time and having you come hunt for them while on the phone. Deliveroo is fast and to my door, with much better choice and UX. Though the charges they add on at the checkout screen are a bit unexpected sometimes

I really didn't notice much difference as a consumer tbh. The restaurants I wanted to eat at ended up a wash since the food didn't do well via delivery, and the rest of them are the regular pizza, kebabs, indian and chinese takeaways that were always there anyway. There's just more of them now, but they're all pretty much the same.

What I did notice, was the prices going up if looking at the delivery company websites, so now I just go to the restaurants sites again so I'm not paying additional markups.

The biggest "win" is that they all have some form of delivery tracking, so I at least know if they've delivered to someone down the road by accident and I don't have to call up after an hour to find out I'm not getting my food ¯\_(ツ)_/¯

> Food delivery isn’t a technology problem. It’s a trivial hiring and logistics problem.

It doesn't matter how you classify the problem; food delivery apps have a ton of advanced logistics going on behind the scenes that the basic "pizza shop delivery" of decades past don't have.

Consider route optimization with multiple restaurants and multiple stops, area incentives for drivers, recommendation algorithms for consumers that take into account time of day + location, etc.

> It doesn't matter how you classify the problem

It does if you care about building a viable business.

> food delivery apps have a ton of advanced logistics going on behind the scenes that the basic "pizza shop delivery" of decades past don't have.

Pizza shops don’t have advanced logistics because they don’t need it. A pizza shop can already saturate multiple drivers.

> Consider route optimization with multiple restaurants and multiple stops, area incentives for drivers, recommendation algorithms for consumers that take into account time of day + location, etc.

But this complexity isn’t necessary and the tiny increase in efficiency is less than the cost of the algorithms and systems to run them.

> But this complexity isn’t necessary and the tiny increase in efficiency is less than the cost of the algorithms and systems to run them.

That's obviously not true, since those companies would simply stop doing it if it cost them more than it was earning them.

> It does if you care about building a viable business.

A business is either viable or not viable. It doesn't matter how it's classified.

At least in my area, customers have more choices beyond mediocre pizza and chinese restaurants.

I have had all kinds of food delivered but the quality really suffers. Pho, BBQ, burgers, teriyaki, burritos, none of it really works for delivery. I have never had great delivery food. It’s always inferior to the restaurant, even from take-out places. Delivery pizza and Chinese places offer dishes specifically suited to survive the rigors of delivery. That’s why their food is mediocre in person. It’s optimized for delivery.

Big food delivery is a fundamentally doomed business because the existing companies are treating this like a logistics problem to be solved by technology when really it’s a product problem. To make this business work you need to sell cheap, simple food that’s still satisfying. That means delivery-specific dishes.

I still don't understand though why people do delivery pizza when decent-quality frozen pizza is often far cheaper than delivery, and it comes out of one's oven piping hot. Unless we're considering folks without ovens.

It’s an immediate convenience when you don’t already have something easy. Something comes up and spoils your plans, you have a bad day, you order some pizza. It’s not something you do all the time.

Delivery pizza is a sustainable business when it’s the only place around that will deliver you hot and ready food right now. Everyone else wins on quality.

Perhaps I've been buying the wrong brands (though I've certainly tried several expensive ones. Frozen and fresh), but I've never been able to cook pizza in my own oven that's as good as even Domino's, let alone somewhere better

I don't think I've ever gotten delivery pizza that also wasn't piping hot, and it didn't require me to pre-buy pizzas ahead of time and the quality is much better from delivery than frozen. I have a local brand of frozen that I really like but they are essentially $10+ now and still aren't actually as good as fresh.

Do you often have enough frozens to feed a party of 10?

Pizza delivery is rarely done for one or two eaters. Only makes sense at >5

I've not had a frozen pizza that was as good as a mid-quality pizza place.

Even the better ones cheap out on toppings, size and you don't get as much choice in what you have.

I like frozen pizza well enough, and I'll get it from time-to-time, but if I'm going to get pizza, it's more likely to be takeout, because it just tends to be better and take a similar amount of time. It really is expensive though, so it's not something I have often.

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