3 ms·
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
by 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 agoSounds like they provide a search/aggregation service that many users find useful.
- deogeo 7y agoLets 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 agoI 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.
- 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.