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Comment by i_am_jl | Hacker News Reader

>Dominos had this down pat twenty years ago, how come everything with an app is so much more expensive?

The people making the app need a much bigger cut than Domino's. Domino's cut only needs to be big enough to pay their delivery drivers, they make their money selling pizza and the delivery is just an additional service that drives business.

The app maker needs a cut big enough to pay their delivery driver and also be the main revenue stream for their entire business since they're not making money off the pizza.

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I would contend that Dominos is a pizza logistics company rather than a seller of retail pizza (compare Pizza Hut).

https://biz.dominos.com/about-us/innovations/

They're not just selling pizza to make money - but also looking at making cars.

https://www.hagerty.com/media/car-profiles/why-dominos-dxp-d...

While I'm not going to claim that was a good idea, the point is that Dominos sees making and delivering pizza as one and the same business.

> 154 examples of the DXP cars were built. Along with the delivery driver, each DXP car could carry up to 45 pizzas, 12 two-liter sodas, and all the extra dipping sauces one could ever want. Add to that the fact that the car’s still held their five-year 100,000-mile warranty, were cheap on gas, and created a surprising amount of buzz, it is hard not to look at the DXP program as a success, low production aside.

Hopefully they were made of something nonferrous to prevent pooling by pesky Kouriers.

Edit: the Hagerty story was a nice read, thank you for linking to it

Is this not corpspeak kool-aid? Dominos and Pizza Hut do the same thing. They deliver pizza to people. Dominos knows how to hype the markets, though.

Pizza Hut has in store seating, Dominoes does not.

If Dominos is a logistics company then Pizza Hut is both a logistics company and a dine-in restaurant.

I believe that Dominos would include the delivery as part of its core competencies and business value that distinguishes it from other pizza companies while others do not consider delivery as part of their core business.

Plenty of Pizza Huts don't have indoor seating anymore. Some Dominos used to, not sure if any do now.

It’s a shame they did not name the car model Deliverator

The margins of the delivery business could be razor thin because the scale at which the app can operate is much bigger than domino's. There are ~7000 domino's in US, and hundreds of thousand on uber eats. I think as more apps offer the same service we'll see a race to the bottom and have a reduction in cost, but not to the VC subsidized levels we saw five years ago.

Picking up one order from a restaurant takes the same amount of time as picking up a dozen. This is a much more important economy-of-scale than having a large app country-wide install base to spread dev costs over.

So I think a third-party delivery business must seek exclusivity contracts to be competitive with an in-house solution.

So what we need is bundling of orders based on 1) restaurant location 2) recipient location 3) time

And if that could be done, maybe just 2 orders to start with (for example carpool benefits for 2 people), that will be awesome, but if you could pool 4-5 orders, that will make bank !

I guess this model, if scaled purely based on the model, will imply restaurants co-located (same parking lot) will benefit from such an arrangement.

That factor is driving the virtual restaurant (ghost kitchen) trend. There are commercial kitchens set up purely to service delivery orders. They use a single facility but have multiple different restaurant brands with different menus (burgers, Mexican, Italian, vegan, etc). These ghost kitchens have no dining rooms and you probably can't even directly order food outside of a delivery service.

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

These are the worst quality-wise. Yes, you can write a review if something went really bad. But not having customers right there who can complain and might even get an extra or a replacement gives less incentive to keep quality up. "Specialising" in everything, pizza-burger-kebab-china, is also likely a warning sign.

> But not having customers right there who can complain and might even get an extra or a replacement gives less incentive to keep quality up.

This is a super good point. I didn't think about that.

IMO thats the most important point of delivered food. Just compare the process and you will instantly see the difference. In a restaurant, the waiter will openly serve you your food. You get instant feedback. And see right away if something is off. In the delivery case, you get a closed package at your door, say "Thanks" to the deliverer and close the door again. Only when the guy (who isn't responsible for the quality anyway) has left you open your package and are confronted with whatever you got. Maybe something spilled, maybe something misses, maybe something was wrong. And maybe its already cold... Whenever you use a delivery system, you take all these risks, and apart from a grumpy review, you can't do much about these... Personally, I think this is where the margin hides. Delivered food can generally have lower quality without customer complaints reaching the vendor.

I was thinking about it context of complaing to folks running the ghost kitchen vs say at a pizza hut location. I have gotten free food when they screwed up my order at pizza places, and they did care about resolving my problems.

At least in the UK this is the default behaviour from Deliveroo, standard delivery does cost money but might get your driver/biker go to multiple other houses on their way to you, or pay extra to get it direct. It made me stop using them, as there's no way to guess whether the normal option will bring the food fresh or not, and paying the premium each time made it feel too expensive.

Also paying the extra premium (whether Deliveroo, Just Eat or Uber Eats) for first delivery is kinda pointless (at least here in the South West) as the drivers seem to be delivering for all the apps at the same time, so your delivery takes 35 mins for the 10 min premium delivery and sometimes they even turn off GPS after they've picked it up if they're delivering for another app first.

So expensive for a frustrating cold food delivery.

I think that's the real difference under all this - Dominos employs drivers (and they get paid by tips, sure there are issues) but it's all one thing. If they deliver a cold pizza it's on them.

All the delivery app companies are NOT making the food so the blame game starts AND they are not employees so a bunch of gaming is going on.

I know my one experience with Uber eats is such that I'll never use it again, and instead travel myself.

Also food delivery drivers employed directly by restaurants typically have an insulated carrier in their car or on their bike to keep your food warm. Uber Eats drivers don't so the food gets cold way faster.

Guess that depends on your location - in the 3 European countries I've lived in, Deliveroo and Uber drivers/riders almost universally had insulated cuboid bags (usually with one of the companies' branding on) in their car or on their bike in all three countries, while Dominos pizza was the same in one country, in another country Dominos used cars with no insulation except the cardboard pizza box, and I don't know about Dominos in the 3rd.

(And I'm not sure if my experiences were representative of each country, just that they were consistent in each city.)

Uber Eats drivers definitely don't have them where I live. Food almost always arrives cold, even when the delivery time is very short. When I lived in NYC most deliveries were done by bike and all of them had insulated bags so the food was typically warm unless it had been super delayed.

So if Uber buys out some small grocery store chains it could work, especially if its in major market cities.

I wonder if it could be solved with a decentralized system. You'd still need a way to vet drivers and handle refunds. I'm not sure other delivery apps bother with the former until bad reviews come in, and maybe the latter could be just between the customer and the store? Would be a big win for customers and gig workers if you could get past the obstacles.

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