Food delivery apps rack up $20B in losses in fierce battle for diners | Hacker News Reader

Food delivery apps rack up $20B in losses in fierce battle for diners

ft.com

20 pointsbelter24 comments

It seems like everyone loses in this model. Consumers are paying 2x normal pricing to get delivery. I've heard very mixed reviews from drivers. Restaurants seem to feel the need to jack up the prices to not get destroyed by the fees being charged. And the delivery services... the ones selling the shovels... are losing $20B somehow.

I miss old delivery services when stores had their own drivers. It was much more consistent, and if there was a problem they'd make it right. DoorDash will give refund, which is fine, but doesn't help with solving food problem that led me to them in the first place.

I also had DoorDash try to guilt me into ignoring issues by saying I reported things more often than most and it hurt the restaurants and drivers. I was getting bags with more than 50% of my order missing, sometimes the main course missing, and many times a completely different meal with someone else's name on it. Trying to make me feel guilty for reporting when I didn't get what I paid for, when I was paying a premium for it, left a really bad taste in my mouth. They tried to make it sound like I was taking advantage of their policy, without explicitly saying it, and that wasn't the case at all.

A few things that would solve most problems would be:

1. Having the restaurant contact the customer if something isn't available, like any standard restaurant would in the pre-DoorDash days. This way order issues can get resolved, either my substitutions or adjusting the order cost and expectations accordingly.

2. Having a unique and simple code that is really big on the receipt. Some places currently use something like last name, first initial, which has been a been a problem with some of the wrong orders. Looking at the receipt I can see some ambiguity and where someone in a hurry would make a mistake.

3. Show issue rates at restaurants. On what percentage of orders are mistakes made that lead to a refund? This would be a helpful stat, as I have noticed some restaurants are much worse than others, to the point I stopped ordering from them. Let the customer see this, and better yet, if they fall below a certain threshold, kick them off the app until they can get their act together and show they fixed whatever the problem was. Things like this make everyone look bad.

These are things these companies should be fixing with their system to reduce these problems, not trying to shift blame to customers.

Tech and specialization of food delivery was supposed to make things more efficient. The opposite is the reality. Now I try to order from places really close to me so picking it up myself is the best option, or order from a mom'n'pop pizza/restaurant that still does their own deliveries to a very local area.

Don't forget that people who aren't involved at all lose as well because the delivery drivers park in the middle of the street with their blinkers on and block traffic/bike lanes.

As with most things the solution is to have better designed communities where people can walk/bike to restaurants/grocery stores and deliveries can be done by bike if needed.

I order food occasionally, but it’s only when my alternative costs are too high.

For example, if I have a busy day and haven’t been to the grocery store, I’ll occasionally order in knowing it’s 2x the price. Likewise, if I’m watching the kids and they’re in bed, I’ll occasionally pay the premium to have food delivered.

DoorDash has an incredibly bad reputation online for stiffing customers. The model seems broken. For a company that is built on digital technology it should be straight forward to get an indicator if drivers are running multiple orders at once (cold food), thieving from deliveries or not delivering properly (customer reports), and if restaurants are getting orders incorrect.

Just a fun anecdote, I showed up to pickup my own online order at a restaurant. The order had been given to a dasher and delivered to someone else, with the same first name, who was now furiously calling the store. They got about double the amount they had ordered, but they must have really wanted the shrimp. I then had to wait for that call to end just to find out my order needed to be remade.

I only order for myself typically, and often when I get the complete wrong order it is for a family. Once I got 2 normal meals and a kids meal. Sure, it was more food, but nothing I ever would have ordered. Most of it was thrown away, and I ended up re-ordering what I wanted. More food isn't always a bonus. I felt bad that the food was being wasted, and for whoever's food I got, since they now had a hungry kid that was going to have to wait another hour for their meal.

Sometimes it is too late to re-order, as the restaurants stop taking orders or close between the original order being placed and the delivery. I've had that happen a few times. I've had some really sad dinners some nights due to that.

https://archive.today/bZ2rh

Are there really that many HNers who subscribe to FT, or have we devolved into having entire conversations as a mere reaction to a headline? (as I post this 2-3 hours after many other comments) Damn. :-s

After reading TFA, I'm surprised post-pandemic food service delivery usage is as high as it is today (in the ballpark of pandemic highs):

https://archive.ph/bZ2rh/679f7982ae6fbbfeae7e46350f253318eb6...

This seems positive for the future of the market sector.

Personally I avoid the delivery apps if at all possible, because I've learned it's usually a masochistic exercise in signing up for disappointment (and cooking a Simple Meal isn't really that hard, lol). I admit the dream of hot and fresh food delivered on demand is an appealing dream.

In the meantime, enjoy that not-even-lukewarm burrito.

Not to start a holy war, but I’m curious when you consider the pandemic to have ended.

When people mostly reemerged, around summer 2021.

>Are there really that many HNers who subscribe to FT, or have we devolved into having entire conversations as a mere reaction to a headline? (as I post this 2-3 hours after many other comments) Damn. :-s

There are paywall bypass browsers extensions. I don't even notice when a site has a paywall.

Good. Hopefully they'll go under and put an end to this sad chapter. The food delivery industry is a plague in the UK.

(Almost always) sloppy junk food being delivered cold, by mostly illegal immigrants (the companies don't really care about vetting) or people swapping delivery accounts (thereby creating a safety risk), on modified bikes who largely disobey traffic laws and create dangerous situations amongst pedestrians in built-up areas.

It's also a bad deal for everybody involved. The restaurants lose, the delivery drivers lose and the customers lose, and the middleman apparently can't even turn a profit. The only people in my apartment block who still buy it are the rich foreign students (Chinese and Arabian), because money is clearly nothing to them.

And what you get from it is a high calorie, over oiled and salted burger, pizza, Chinese/Indian meal, or other slop which contributes to the national obesity/overweight rates (over 64%), because you're too lazy to cook even an easy recipe.

If you want a special meal, you'd be better off going to the restaurant and at least eating it hot, and if you subsist off this stuff, you'd be better off kicking the habit and getting your life in order. Living off of this stuff is just the new smoking.

It's almost like trying to insert yourself as a middleman in an industry with super tight margins may not be the greatest business model.

In the ZIRP era, everything seemed possible. Some of the resulting companies just got enough traction to prolong their demise.

The head of Domino's Pizza is on record in the past saying they could never make money on delivery, despite years of trying. Don't have time to find a link right now, but just wanted to add this to the conversation.

My guess is that if they couldn't, then it's not a money-making business. Or at least the business model has to change a bit first.

I just don’t get why people keep ordering from them. It’s not that hard to throw a steak in a pan or whatever.

In my extended family, it's a huge generational gap, with those under 30 using the apps constantly and those over 30 only using traditional delivery from pizza and Chinese restaurants that have their own drivers. One of the weirdest experiences was when my nephew had milk and a couple other items delivered only a couple of hours after he got home from his job at a grocery store. Guess he didn't think about getting those items at the end of his shift. The delivery apps seem to have integrated themselves into their way of thinking how food gets to the house. It's a bit odd for me as I'm not part of that generation.

People are creatures of habit and gravitate towards path of least resistance.

It's harder than sitting on your ass and having someone else do it for you.

The best tasting ingredient in a dish is “someone else made it”

Aw you actually think everybody has the means and the desire to do that. Love that for you.

It would be interesting to see how many people work for the delivery apps and how many of them would otherwise be working for the restaurants they're now delivering food for. Could some of the difficulties restaurants are having finding workers be due to part of labor market they usually have access to are now doing delivery instead of production?

Cold food, missing items, delivered to the wrong address 70% of the time for 200% the price. Shut-up and take my money for negligible value!

Timely - Amazon Prime rolled out its "forever" free GrubHub delivery service yesterday.

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