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Comment by Sayrus | Hacker News Reader

While you pay a markup on the application, UberEats and others keeps 25/30% of the price based on the marked up price. If you make the calculation they usually have to cut into the kitchen margin while the price for the customer stays more expensive.

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Can't the restaurant just say no?

Unless something has changed over the last couple years, restaurants opt in to being available on those apps. Uber Eats and the others are generally integrated into the restaurant's point of sales system.

That would explain why they sell less or cheaper food, which appear too high on the app due to the markup they have to add to the price to handle the fees. This would be an alternate explanation to why things seem inflated. Even with inflated ingredients prices, it actually still doesn’t add up how the volume dropped so much such that each unit would need to cost that much more (I’m arguing it can’t just be the ingredient prices being high). The fees adding to the perceptual inflation make sense.

It’s more expensive volume or less cheaper volume they can make due to higher ingredient prices PLUS the fees they have to add to cover the delivery service cut. That’s how you get a $20 burger for delivery.

This all gets worse when the prices become sticky at the retail place itself (app prices enter the real world). These delivery service are a serious agitator, true disrupter.

Nah. Those delivery services were opt-out until California passed a law in 2021 prohibiting that kind of behavior.

Ok, but if they're doing it without the restaurant's buy in, then they're presumably just acting as a middleman and ordering from the restaurant themselves, at which point I'm not sure how they're stiffing the restaurant 20-30%. If I were running a restaurant and Doordash kept calling me trying to submit an order for cheaper than the food costs I would simply decline to take their business...?

Doordash puts up a listing for a restaurant and siphons off take-out traffic. Once Doordash gets a critical mass they can turn around and "negotiate" with the restaurant.

And the restaurant can say “no.”

If I were a restaurateur and caught a glimpse of a Doordash driver in my finest establishment, the first thing I would do is put together a simple online order form and start advertising it in every order. If you just disappear from the app one day, your customers trying to reorder would probably go somewhere else – but if they know they can order on your site instead, they probably will (if your food is good enough and your ordering experience is top-notch, or vice versa).

  And the restaurant can say “no.”

And now you have hordes of angry customers who can't understand why you have a Doordash listing (that you didn't create and don't want) but won't fulfill orders.

  If I were a restaurateur and caught a glimpse of a Doordash driver in my
  finest establishment, the first thing I would do is put together a simple
  online order form and start advertising it in every order.

Whether it's not wanting to give Doordash a cut, not wanting to sell food that doesn't travel well for delivery, not wanting to crowd out local customers, not wanting Doordash to hijack their brand, not wanting Doordash to crowd out their own in-house delivery, or whatever actual restaurant owners litigated these forced listings because they didn't want to be listed on Doordash.

e.g. https://boston.eater.com/2016/3/4/11160924/legal-sea-foods-s...

The claim isn't that your saying no to fulfilling orders, it's that your saying no to giving them a discount.

  The claim isn't that your saying no to fulfilling orders,
  it's that your saying no to giving them a discount.

Well, no. This is the comment I responded to:

  Unless something has changed over the last couple years,
  restaurants opt in to being available on those apps.

That very much asserts that the issue is about accepting orders. Doordash et al were initially opt-out.

Yeah, like the restaurant can say “no” to giving a discount, they can say “no” to people wanting their food to get delivered now. It’s just that now it’ll be a bad business decision probably.

Everything is possible. And every choice has its own set of tradeoffs. But no, there’s no time machine to the pre-Doordash world now.

If restaurants didn't put themselves on the platform, wouldn't that mean the restaurant is getting full price? Its equivalent of paying someone to call in your order and picking it up. What are the negatives?

This is all, of course very fuzzy, but "I will spend 30 dollars on food tonight" can turn into "I call the restaurant and order 30 dollars of takeout" vs "I use door dash to get 30 dollars of food from that restaurant", and in the latter the restaurant sees less sales. But if I'm already like "I will have food from this place I like" and it's not on doordash or w/e, I might still be motivated enough to head over there!

There's a lot of dynamic variables here (including of course the "the person doesn't order from the restaurant"), but the few times I've used those delivery apps I end up ordering very little food for a lot of money.

I try to just do takeout instead.

You're just arguing against delivery food generally, not against Uber.

Of course delivery has a cost, was even typical for pizza delivery before the apps. If you're that price conscience, takeout always exists.

While I won't go as far as to say that Dominos & co. are trying to run delivery entirely at cost, it is not clear to me that delivery from a shop directly vs delivery with a middle layer (having to pay lots of engineers fancy salaries mind you..) is an equivalent operation.

Remember, delivery apps take the costs and then their cut. That cut theoretically has some pressure from markets or whatever, but ... well.....

I'm splitting hairs here, granted

Dominos uses door dash in my area.

Not always

- https://www.eater.com/2020/1/29/21113416/grubhub-seamless-ki...

- https://www.knoxnews.com/story/entertainment/dining/2018/10/...

- https://lawstreetmedia.com/featured/restaurant-sues-doordash...

- https://www.golocalprov.com/news/legal-but-unethical-ri-rest...

- https://www.wctv.tv/2023/12/19/phony-restaurant-listing-door...

These stories are horrible, but that doesn't prove restaurants lose money on Doordash. One of my clients bootstraps online ordering for restaurants. About 80% of those restaurants request to be on Doordash, and have been on there for many years. I assume they're not all dumbasses losing money on every order.

Doesn't excuse Doordash taking advantage of anyone.

Not every restaurant can handle the deferred payout either. Their business is based on receiving payment at the time of service. The restaurant model operates on razor thin margins, and they don’t buy their food on net 30 terms, but they have to absorb costs as if they do.

There are other issues, but this setup looks a lot like paying the mafia due to the imbalance of power.

Sure but you're blurting generic talking points that don't address the evidence of Doordash hosting millions of restaurants obviously profitably for the restaurants

That's mixing up different concerns. If they make an unauthorized site for a restaurant, with no agreements, then the restaurant is getting full menu price.

While the unauthorized sites potentially deliver poor customer service and (the appearance of) higher prices, potentially driving away customers? Who do you know that comparison shops all the different ways to order from the same restaurant?

Price shouldn't be the only thing the restaurants care about.

> Price shouldn't be the only thing the restaurants care about.

Did I imply otherwise?

"Different concerns" means there is more than one concern...

When the market is captured by the marketplace apps: No, not really

Sure they can, and go bankrupt because people order more than they go to restaurants nowadays.

That's my understanding. Uber takes 25%, but by default that's offset by increasing the on-app price 25% relative to the in-store price, and the owner has to explicitly opt out of that behavior. So at the end of the day, they should be getting the same amount as in store orders unless they opted out of the markup, right?

That calculation doesn’t work. If an item costs $10, and Uber marks it up 25% then Uber lists it at $12.50. When Uber takes 25% of the marked up price, they’re taking $3.125 and the restaurant is getting less than $10.

Under would just mark up the price to $13.33 so after they take their 25% the restaurant would get $10.

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