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It feels as though much of tech has gone from helping people accomplish their goals efficiently to a business model of extracting rents while providing no or li

• dymk 7y ago
  If somebody is willing to pay the GrubHub fee, then they’re worth it. Really basic supply and demand, even if you personally don’t find the service useful. Yelp is still my go-to as an index of nearby restaurants and bars.
  • pszndr 7y ago
    > If somebody is willing to pay the GrubHub fee, then they’re worth it That's why they're tacking it on without warning > Yelp Is Sneakily Replacing Restaurants’ Phone Number So Grubhub Can Take a Cut
  • deogeo 7y ago
    They're worth it only because without paying them protection money, your restaurant gets no visibility due to overcrowded marketing by other restaurants that do use GrubHub. Without them, or without Yelp, some other yellow-pages equivalent would be used, and the same total number of orders would be placed. They are literally parasites.
    • dymk 7y ago
      Sounds like they provide a search/aggregation service that many users find useful.
      • deogeo 7y ago
        Lets say the internet isn't around yet, and people still use the yellow pages. One day, they decide to charge a 10% tax on all the revenue of a business, if they want to keep their listing in the yellow pages. Those that don't pay, get delisted. There is a competing service, the blue pages, that charges only a few cents for a listing. But it has far fewer readers, so any business that has only a blue page listing, not a yellow one, will see their income drop disastrously. So they are stuck paying a heavy tax to the yellow pages, even though if the yellow pages were to completely disappear, all the readers would switch to blue pages, and everyone would get the same search/aggregation service, for a fraction of the cost. That's pretty much the situation with Yelp/GrubHub, and I think that qualifies them as parasites (or rent-seekers, if you prefer).
        • nemothekid 7y ago
          I don't think your definition of rent-seekers is apt - how is your example any different from what Google has been doing for years? I could pay Bing a fraction of the price, but I still need to pay Google for traffic.
          • deogeo 7y ago
            > how is your example any different from what Google has been doing for years? If the shoe fits...
          • bantunes 7y ago
            > how is your example any different from what Google has been doing for years? It's not.
        • pmoriarty 7y ago
          "Lets say the internet isn't around yet, and people still use the yellow pages." People did use the yellow pages to find restaurants, but a better comparison to yelp might be Zagat's, which had restaurant reviews.
• Aperocky 7y ago
  I've never used Yelp and never really needed it. Google imo is a much more neutral service and not hard to use at all to find restaurants.
• Nasrudith 7y ago
  I suspect it is a downside of the financialization - silicon valley has become more generic business than any technical sophistication or engineering drive. It has become way more finance and marketing over time - if Google was "tech" (indexing algorithms) that evolved into more marketing (their advertising role) then social networks started fundamentally "half-marketing" by being social oriented as opposed to sophistication of number crunching. This isn't meant as a slight - some business domains are just fundamentally are more one than the other. But that still shapes the culture. Symbolically Juicero and Raw Water merchants show the shift to the lack of vision and smarts in a drive for cash. This isn't new of course - pets.com wasn't that bright either technically nor in the business sense but they were at least trying to move retail onto the internet. As for society - the term is rent seeking and ridding us of it entirely would be a major commitment and ironically unpopular. Unfortunately Yelp does have some value if not concretely - their name and reputation. If you were to try to launch a "zelp" tommorow nobody would stop you but chances are nearly nobody would go there because nobody heard of it and there is no good user content. It isn't quite classical rent-seeking as they are not enacting barriers and anyone could enter technically. The issue is size and how people use it. If the market share was split or anyone could enter the delivery market with no overhead their share would shrink. It is a side effect of consumer useage - there is a strong winner takes most tendency with the resulting network effect in spite of the fact the barrier to entry being so low and people going with the path of least resistance.
• asdff 7y ago
  To me, this is a sign of grubhub/insert copycat delivery service circling the drain, trying to extract whatever cash they can get before the inevitable. Anecdata, but among my peers people sort by delivery fee or try to game the system for a new user discount. Delivery fees can easily be $7 now which is like buying another entire portion at some restaurants. Personally, I use grubhub a lot--as a menu to look at for when I call the restaurant directly with my pickup order.
  • nrmitchi 7y ago
    I dont want to cycle back to the content of the article (and parent comment), but is this not exactly the behaviour that these dark patterns are attempting to capture? They (both Grubhub in the past, and Yelp now) have been caught providing "alternative" restaurant phone numbers so that your order, despite being delivered over the phone to the restaurant "directly", is still attributed back to Grubhub. They claim their fee from the restaurant just as if you purchased through the app itself, even though they were not in the transaction process at all.
  • jrochkind1 7y ago
    > Personally, I use grubhub a lot--as a menu to look at for when I call the restaurant directly with my pickup order. Which is of course exactly what the article is about. Depending on where you got that phone number, turns out you may be using grubhub to place the order and give grubhub a cut, when you think you are calling the restaurant directly with your pickup order.
  • c3534l 7y ago
    Yelp can't grow anymore. Now is when they make money and pay back their investors.
    • treyfranciscoh 7y ago
      Not really, they've been public for many years. Investors were "paid back" (i.e. had a chance to sell stock) a long time ago.
• floatrock 7y ago
  > It's leveraging it's market power to make money rather providing customers with any value... feels like society needs to come up with a new word, new idea The term economists use is "rent seeking behavior". There's a more interesting data play here, but I'll get to that in a sec. Now, ostensively the value is driving traffic and increasing number of customers. What they're actually doing is the blitzscaling playbook: become the only channel people go to online when looking for restaurants (last 10 years) and now monetize the captured audience (next 10 years). Because as people have moved online, what else are you going to do? Take down your yelp page? That's the pessimistic take. The optimistic take is the data play here. It's confusing, because they said two opposing things: > Grubhub says it retains these recordings and uploads them to the private page that restaurants use to manage their service so that restaurants can audit them and dispute any errors. Grubhub says it does not use the recordings for any other purpose. vs. > "There is a restaurant on the Upper East Side that serves sushi. We worked with them and we said that there's a trend for poke bowls. We suggested that they start adding some of these items to their menu,” Grubhub senior vice president Kevin Kearns said at the hearing. “They did this and within one month, they doubled their orders, and within three months they 7x’ed their orders to 1,600 orders a month..." So the data play is aggregating what people are ordering and turning that into analytics. Now that 15% take isn't just the cost of online rent, but it's also your cost to get insight into what everyone around you is ordering. That said, the next question is whether the indian restaurant around the corner is actually going to use grubhub analytics to optimize their menu by placing their matar paneer higher up because that's what's being ordered at similar indian places and grubhub's telling them they can improve conversions by 6.3%, but that's effectively what some engineer or PM at Grubhub thought up. If that story is believable, then it's a more-than-just-rent-extraction narrative. It's still kinda shitty, but that's why you sell jeans and shovels, not become a gold miner.
  • floatrock 7y ago
    Or to put that last line another way: if you're making a data play, you aren't going to win over many early customers if you blindfold them and tell them to use your data analytics with a gun to the back of their head. Grubyelp's data play may be a fantastic way to collect order data and help restaurants "Optimize Everything", but if the monetization is done in a way that people cry hidden fees and the onboarding is a binding arbitration clause buried in a contract, well, we know what a disregard for your customers does. Many people use Lyft because "it's not as scummy as Uber" despite Kalanick being gone for a few years now. Just last week DoorDash got a huge backlash when people learned where their tips were actually going. This kind of growth hacking works to pad short term numbers, but long term it only works if you're a Comcast or Equifax and don't actually need to give a shit what people think of you.
• mirrorlake 7y ago
  Grubhub's value to me is that they send out surveys to most (or all?) customers who order from restaurants, so the star ratings are actually useful to me. A lower rating is a huge red flag when I'm checking out new places, at least. But is that worth 15%? Most definitely not.
  • acdha 7y ago
    The problem is that low quality is most commonly due to the delivery process, and Grubhub is thoroughly dishonest about this. I stopped using them after they twice lied and tried to blame the restaurant for cold food, not knowing that I had called and verified that the food had been ready and waiting for the driver an hour earlier.
  • jswizzy 7y ago
    The problem with that is food quality changes with transportation and time. Unless a dish is designed for delivery it can be much lower quality since it is not served properly.
• SilasX 7y ago
  >The person used Yelp solely to look up the phone number of a restaurant. GrubHub deserves 15% of his order for that? Hah, that reminds me of what’s happening with the custom of tipping, where it’s expected for more and more places with less and less service: https://news.ycombinator.com/item?id=18241477 https://news.ycombinator.com/item?id=18241477
• tempestn 7y ago
  "Something else" indeed. Recently a scam site popped up that copied the branding of our site, autotempest.com. (They registered autoStempest.com and copied our logos and such.) They claimed to be a dealership based in Texas, but were actually posting fake vehicles and having people wire them money (which they obviously kept). One of the things these scammers did to appear legit was set up a Yelp page with a bunch of fake reviews. We informed Yelp, but they refused to remove the page, because they "believe that the public benefits from sharing their experiences with local businesses." Obviously that doesn't make any sense since the entire business is fictitious, not to mention trademark infringing, but that was their response. So I did the only thing I could—posted a 1-star review of the fake business, warning people about the scam. Yelp removed my review, with the explanation that I did not appear to be a customer of the business.
  • Aeolun 7y ago
    What I do not understand is why nobody copied yelp with an ethical business model yet.
    • milesskorpen 7y ago
      There are a lot of vertical specific ones. Trip. OpenTable. Thumbtack. Hard to monetize though.
    • guiltygatorade 7y ago
      Probably because most users are blissfully ignorant of the less ethical bits of how Yelp conducts its business. As long as there isn't a huge discrepancy between the expectation and the services/goods rendered, most people can't tell the difference over something that is largely subjective anyway.
      • sak5sk 7y ago
        This and many users are hooked on the social networking effect where other users are liking their reviews. Twitter is much the same - you get a constant stream of endorphins every time you see people liking and retweeting your crap. It's socially toxic but effective.
• themagician 7y ago
  > It feels as though much of tech has gone from helping people accomplish their goals efficiently to a business model of extracting rents while providing no or little value. This isn't new. So much of what we consider "value" today is just information asymmetry. Hiding phone numbers, hiding true costs, stuffing data into a proprietary database with a service contract, hiding whoever the real manufacturer of something is… that is where the money is made. The Internet was supposed to fix that, but instead of getting an "Internet" we got a series of private networks, loosely connected, with gatekeepers. You can visit different ones, but they don't' really talk to each other. You can add your own information, but it won't really get seen by anyone because everyone has been conditioned to go through one of the big gates. We tried for a while, with things like open protocols and semantic web, but most people quickly realized there was a lot more money to be had creating walled gardens.
• lancesells 7y ago
  I really wish there was a GrubHub competitor that charged a monthly fee instead of the model of paying more the more successful you are. Restaurants pay x per month with normal processing fees and that's it.
  • gjreda 7y ago
    This was GrubHub's original model. Restaurant's don't want to pay a flat fee when they don't see enough orders they feel is necessary to justify said fee. [1] https://youtu.be/a2oTps7tKS4?t=893 https://youtu.be/a2oTps7tKS4?t=893
    • lancesells 7y ago
      Interesting. I wonder if you could eliminate some of that with a free tier until your first couple orders or something.
  • randerson 7y ago
    Order through the restaurant's own website/app if they have one.
• dreamcompiler 7y ago
  The "something else" is a protection racket. "Nice restaurant you got here. Be a shame if something happened to your high ratings." Yelp should be prosecuted under RICO.
  • edanm 7y ago
    Ummm, do you not see a difference between forcing people to pay you money on threat of violence, vs. choosing whether to allow people to market on your platform?
    • dreamcompiler 7y ago
      Yelp forces businesses to pay them money on threat of lowering their ratings, which can destroy the business. This is quite well-documented. One example appears below. I stand by my assertion. https://cliffbig.blogspot.com/2014/04/the-yelp-protection-racket.html https://cliffbig.blogspot.com/2014/04/the-yelp-protection-ra...
• malandrew 7y ago
  > while providing no or little value. If there was no or little value, people wouldn't be using Yelp. Clearly there is value being provided, such as discovery, search and reviews. Now the quality of those three is debatable and changes from person to person, but to say they are providing no or little value is disingenuous. This isn't about Grubhub at all. This is about Yelp. Grubhub is just the vendor to Yelp that is allowing Yelp another way to monetize its service.
• dwd 7y ago
  I think the bad actor here is as much Yelp as Grubhub in that they are using Grubhub's relationship and ability to charge a restaurant to monetise their own listings. That's where this is unethical and possibly fraudulent when you look at there action as basically generating fake advertising clicks.
• wutbrodo 7y ago
  I've never been a fan of Yelp as either a service or a company, but the assumption that they used yelp to look up the phone number isn't warranted here. Yelp's whole value prop has always been reviews and discoverability, and you're just handwaving that away and claiming that the only relevant workflow here is googling a known restaurant after having made the decision to order and using Yelp's page simply to find the phone number. That isn't to say that I don't think Yelp's behavior here is gross, but the broader picture you paint of pure middleman rent extraction with no value created, eg with: > The person used Yelp solely to look up the phone number of a restaurant. Is circular in that you assume your conclusion and then point to it as evidence.
  • arcturus17 7y ago
    It’s absolutely warranted here because the article author mentions they are calling their favorite sushi restaurant.
    • aembleton 7y ago
      Wouldn't they have a menu at home from their favourite sushi takeaway? Then they can just call the number on the menu, and even store it in their phone.
      • therealx 7y ago
        No? A lot of us don't keep paper around, and while some people do it, most people I know don't add restaurants to their contact list.
    • wutbrodo 7y ago
      Ha oops. I missed that. Thanks for the background
• mikestew 7y ago
  It feels as though much of tech has gone from helping people accomplish their goals efficiently to a business model of extracting rents while providing no or little value. Down vote me to hell for the "+1", but man that struck me as profound, and I wanted you to know (no contact info in profile). If only briefly, I had a moment of clarity that put a finger on that yucky feeling I feel about the tech industry lately.