8 ms·

> They paid $544m more to drivers to deliver food than they took in. Why? Maybe it's just not a very profitable business to send some guy in a Prius across tow

by freyr 7y ago

> They paid $544m more to drivers to deliver food than they took in. Why? Maybe it's just not a very profitable business to send some guy in a Prius across town to pick up a burrito, then drive back across town to deliver said burrito. I've tried it a few times and it took an inexplicably long time to get my order, and the food arrived cold and unappetizing. Never again.

leannekim 7y ago
Actually that IS a very profitable business, that is if you can charge people way more than most people are willing to pay.
- draw_down 7y ago
  Read that again.
gchamonlive 7y ago
Next time try selecting nearer restaurants. Their delivery fee is lower and they arrive quicker and in a better state. If there are none then there isn't much you can do, you have to trade off freshly cooked food for the convenience of having it delivered to you
- batiudrami 7y ago
  Honestly I do not get the Uber Eats hype. If I'm sober enough to drive I can get the same food, fresh and on a plate for cheaper. If I'm drunk I'm happy with a pizza delievered by Domino's. Getting food delivered slowly, cold and squashed into plastic containers is an awful experience, and it ends up costing me thirty bucks.
  - chillacy 7y ago
    If on-demand delivery scaled to the maturity of package delivery (like UPS/Fedex) I can imagine Dominos one day replacing their delivery operations with the future version of Uber Eats.
  - jamesknelson 7y ago
    Yeah, I agree that it doesn’t make sense in the suburbs. It really depends on where you live. In the center of a large city, you can order something in a minute, pay a couple dollars extra, and have the food at your door in 10-15 minutes. Deliveries are done by bike or scooter and there are hundreds of places to choose from that’ll deliver within half an hour. It’s great when you’re in the flow and don’t want to deal with the distractions that walking out the door inevitably entails.
  - leannekim 7y ago
    And it pollutes the environment with plastic trash and exhaust and CO2
    - xmprt 7y ago
      I get the extra trash from packaging required for delivery but how is it using extra CO2? The driver would be doing the same distance or less than you because they would be doing multiple pickups and dropoffs in a row so they're only contributing a one-way (more like 1.5) whereas you would have to do the roundtrip.
      - esotericn 7y ago
        Delivery packaging is the same as you'd get if you went there in your car. The appropriate comparison is with cooking at home. Takeaway food is a luxury.
  - lostmsu 7y ago
    I used it at work for lunches.
- ada1981 7y ago
  I tried ordering a pizza from NYC and it showed up like three days later in Palo Alto and was pretty cold. They also charged me an arm and a leg.
philliphaydon 7y ago
Here in Singapore, I'm not aware of anyone who uses a car for delivering food. (we don't have Uber Eats cos they couldn't penetrate the market here) Grab, Food Panda, Deliveroo, and a couple of others I cant think of, all use Bikes, Motorbikes, and e-Scooters. The model works really well here because majority of deliveries are short distance to apartment blocks. I can't imagine it working for long distances though. You would end up with cold food, long wait times, and it wouldn't be very environmentally friendly.
- pquerna 7y ago
  Uber owns ~20 to ~30 percent of Grab, JFYI. They specifically exited the Uber brand from Singapore, and pushed Grab.
  - latchkey 7y ago
    Same in Vietnam.
    - jfoster 7y ago
      It was a South East Asia deal. Without China (sold to Didi) and SEA, there's not too much of Asia where Uber still exists. In Japan they do. No UberX there, but Uber Eats look like they might be doing okay there. They are (including UberX) still in Taiwan.
      - kerng 7y ago
        I used Uber in Hong Kong.
        jfoster 7y ago
        Ahh yep, they're still in HK as well. South Korea too.
        philliphaydon 7y ago
vadym909 7y ago
If a restaurant is within 10 min of me, I just drive to it myself. If its 15+ min one way, I'll use DoorDash, but I don't get why the driver would drive 30 min for $5 including the use of their car and gas.
- ojbyrne 7y ago
  The only way this works economically is if the driver can batch up deliveries. Pick up multiple orders at one restaurant or a cluster of restaurants, then deliver them all to a series of residences along a route. I’ve always assumed that DoorDash et al try to do this.
  - servercobra 7y ago
    Uber has made it explicit by tossing in free delivery to a list of restaurants that presumably have an order going out near you. You get like 5 minutes to respond to a list of like 4 restaurants usually when you open the app at peak times.
    - ilikehurdles 7y ago
      That’s actually very clever. I have never used UberEats but among the dozens of delivery services I’ve used I generally try to minimize delivery/service fees so I end up buying from whichever decent restaurant has a free delivery “deal” going on. I don’t get how these middlemen are making any money from me. I’d see myself using this feature of UberEats if I bother to try the app in the future.
  - freyr 7y ago
    That drives the costs down, sure, but then you end up with food that's been sitting around as the driver goes from restaurant to restaurant and then travels from house to house.
- ghaff 7y ago
  TIL DoorDash actually delivers to where I live from quite a few restaurants--though the vast majority I wouldn't consider. I think they're the only delivery service that covers my address. To your point, if I were to use them, quite a few of the restaurants are a good 15 minute drive from where I live. Which is further than I'd bother to go to get takeout. It's also further than I'd probably chance to get, say, a burger delivered as I suspect it would be getting cold by the time I got it.
nkozyra 7y ago
It honestly doesn't strike me as a service for any place other than metropolitan areas. In nyc it's usually someone traveling 2mi or less on a motorbike/bicycle. The food comes quickly and relatively cheaply. In the suburbs someone drives a car 10-20mi round trip for what is usually a chain restaurant. No aspect of this makes sense to me economically.
- rootusrootus 7y ago
  Even in the suburbs there are non-chain restaurants and they are usually much closer than 10 miles. There is no particular reason food delivery would not be successful there. (and I can confirm, it works great, we do it all the time)
  - nkozyra 7y ago
    To be fair I said 10-20 mi round trip While I don't doubt your positive experience, it would be atypical for a suburb to have significant independent restaurants within 5mi of any given point, at least in most of the United States.
    - fkdo 7y ago
      > it would be atypical for a suburb to have significant independent restaurants within 5mi of any given point Some cities, like Dallas, seem to have a higher percentage of chain restaurants than the average suburb. Other cities, like Seattle, have a ton of restaurants that seem independent but are actually part of a portfolio of restaurants owned by one person, private equity, or a corporation experimenting. I expect uber eats will scale very well in the suburbs if they can get multiple orders in the same car efficiently. Restaurants are experimenting with food that travels better.
      - firebones 7y ago
        I don't know. The proposition to a non-chain restaurant in the suburbs, of which there are very few to begin with, reminds me more of a Groupon situation where the restaurants come out on the short end. In this case, it's not because they have to discount, it's because it's their reputation that takes the hit for Uber taking too long to deliver. Plus, a lot of local restaurants' margin comes not from the markup on the food, but the markup on the drinks. Many already offer carryout anyway.
atombender 7y ago
In NYC, at least, I've had Uber Eats orders delivered by a person on a scooter. Same as Seamless/GrubHub, Caviar, etc.
- CydeWeys 7y ago
  I don't know where exactly you are in NYC, but in Manhattan at least, it's almost always bikes, e- or otherwise.
- deleted 7y ago
  [deleted]
antpls 7y ago
Maybe they are investing in user habits, branding and data, such as : where are the consumers, where are the most wanted food, how frequent is it, at what time, etc. $544m are invested to grow the data machine. Uber uses the current fleet for now, but once they have more data to analyze, they can switch to a better operational model which would be hopefully profitable. What is worrying is the aggressive, anti-competitive, potentially illegal (depending on the country) subsidiaries aimed at killing the local competition.
- navigatesol 7y ago
  >they can switch to a better operational model which would be hopefully profitable. So they have been burning billions of dollars in the hopes that there might be a business model in the future? Maybe it's just that VCs were naive to think that taxis and food delivery were good businesses.
  - antpls 7y ago
    Your sentence seems to insist on "billions", but it's not that much in regard to all the invested money in the world. According to UNESCO (http://uis.unesco.org/apps/visualisations/research-and-development-spending/ http://uis.unesco.org/apps/visualisations/research-and-devel...), the world's spending on R&D (only) is estimated to be $1.7 trillions. Apple's R&D investment for 3rd quarter of 2019 is $4.2 billions. So, yes, billions are burned in the hope of finding things. Most probably, future generations will even burn hundred of trillions.
    - freyr 7y ago
      Thanks, I'll try that brilliant logic on my wife. "Sure, hun, the Porsche was expensive, but it's not that much in regard to all the money spent in the world!"
ashelmire 7y ago
Surely there's a place that sells burritos near you?

by freyr 7y ago

leannekim 7y ago

Actually that IS a very profitable business, that is if you can charge people way more than most people are willing to pay.

draw_down 7y ago
Read that again.

gchamonlive 7y ago

Next time try selecting nearer restaurants. Their delivery fee is lower and they arrive quicker and in a better state. If there are none then there isn't much you can do, you have to trade off freshly cooked food for the convenience of having it delivered to you

batiudrami 7y ago
Honestly I do not get the Uber Eats hype. If I'm sober enough to drive I can get the same food, fresh and on a plate for cheaper. If I'm drunk I'm happy with a pizza delievered by Domino's. Getting food delivered slowly, cold and squashed into plastic containers is an awful experience, and it ends up costing me thirty bucks.
- chillacy 7y ago
  If on-demand delivery scaled to the maturity of package delivery (like UPS/Fedex) I can imagine Dominos one day replacing their delivery operations with the future version of Uber Eats.
- jamesknelson 7y ago
  Yeah, I agree that it doesn’t make sense in the suburbs. It really depends on where you live. In the center of a large city, you can order something in a minute, pay a couple dollars extra, and have the food at your door in 10-15 minutes. Deliveries are done by bike or scooter and there are hundreds of places to choose from that’ll deliver within half an hour. It’s great when you’re in the flow and don’t want to deal with the distractions that walking out the door inevitably entails.
- leannekim 7y ago
  And it pollutes the environment with plastic trash and exhaust and CO2
  - xmprt 7y ago
    I get the extra trash from packaging required for delivery but how is it using extra CO2? The driver would be doing the same distance or less than you because they would be doing multiple pickups and dropoffs in a row so they're only contributing a one-way (more like 1.5) whereas you would have to do the roundtrip.
    - esotericn 7y ago
      Delivery packaging is the same as you'd get if you went there in your car. The appropriate comparison is with cooking at home. Takeaway food is a luxury.
- lostmsu 7y ago
  I used it at work for lunches.
ada1981 7y ago
I tried ordering a pizza from NYC and it showed up like three days later in Palo Alto and was pretty cold. They also charged me an arm and a leg.

philliphaydon 7y ago

Here in Singapore, I'm not aware of anyone who uses a car for delivering food. (we don't have Uber Eats cos they couldn't penetrate the market here) Grab, Food Panda, Deliveroo, and a couple of others I cant think of, all use Bikes, Motorbikes, and e-Scooters. The model works really well here because majority of deliveries are short distance to apartment blocks. I can't imagine it working for long distances though. You would end up with cold food, long wait times, and it wouldn't be very environmentally friendly.

pquerna 7y ago
Uber owns ~20 to ~30 percent of Grab, JFYI. They specifically exited the Uber brand from Singapore, and pushed Grab.
- latchkey 7y ago
  Same in Vietnam.
  - jfoster 7y ago
    It was a South East Asia deal. Without China (sold to Didi) and SEA, there's not too much of Asia where Uber still exists. In Japan they do. No UberX there, but Uber Eats look like they might be doing okay there. They are (including UberX) still in Taiwan.
    - kerng 7y ago
      I used Uber in Hong Kong.
      - jfoster 7y ago
        Ahh yep, they're still in HK as well. South Korea too.
        philliphaydon 7y ago

vadym909 7y ago

If a restaurant is within 10 min of me, I just drive to it myself. If its 15+ min one way, I'll use DoorDash, but I don't get why the driver would drive 30 min for $5 including the use of their car and gas.

ojbyrne 7y ago
The only way this works economically is if the driver can batch up deliveries. Pick up multiple orders at one restaurant or a cluster of restaurants, then deliver them all to a series of residences along a route. I’ve always assumed that DoorDash et al try to do this.
- servercobra 7y ago
  Uber has made it explicit by tossing in free delivery to a list of restaurants that presumably have an order going out near you. You get like 5 minutes to respond to a list of like 4 restaurants usually when you open the app at peak times.
  - ilikehurdles 7y ago
    That’s actually very clever. I have never used UberEats but among the dozens of delivery services I’ve used I generally try to minimize delivery/service fees so I end up buying from whichever decent restaurant has a free delivery “deal” going on. I don’t get how these middlemen are making any money from me. I’d see myself using this feature of UberEats if I bother to try the app in the future.
- freyr 7y ago
  That drives the costs down, sure, but then you end up with food that's been sitting around as the driver goes from restaurant to restaurant and then travels from house to house.
ghaff 7y ago
TIL DoorDash actually delivers to where I live from quite a few restaurants--though the vast majority I wouldn't consider. I think they're the only delivery service that covers my address. To your point, if I were to use them, quite a few of the restaurants are a good 15 minute drive from where I live. Which is further than I'd bother to go to get takeout. It's also further than I'd probably chance to get, say, a burger delivered as I suspect it would be getting cold by the time I got it.

nkozyra 7y ago

It honestly doesn't strike me as a service for any place other than metropolitan areas. In nyc it's usually someone traveling 2mi or less on a motorbike/bicycle. The food comes quickly and relatively cheaply. In the suburbs someone drives a car 10-20mi round trip for what is usually a chain restaurant. No aspect of this makes sense to me economically.

rootusrootus 7y ago
Even in the suburbs there are non-chain restaurants and they are usually much closer than 10 miles. There is no particular reason food delivery would not be successful there. (and I can confirm, it works great, we do it all the time)
- nkozyra 7y ago
  To be fair I said 10-20 mi round trip While I don't doubt your positive experience, it would be atypical for a suburb to have significant independent restaurants within 5mi of any given point, at least in most of the United States.
  - fkdo 7y ago
    > it would be atypical for a suburb to have significant independent restaurants within 5mi of any given point Some cities, like Dallas, seem to have a higher percentage of chain restaurants than the average suburb. Other cities, like Seattle, have a ton of restaurants that seem independent but are actually part of a portfolio of restaurants owned by one person, private equity, or a corporation experimenting. I expect uber eats will scale very well in the suburbs if they can get multiple orders in the same car efficiently. Restaurants are experimenting with food that travels better.
    - firebones 7y ago
      I don't know. The proposition to a non-chain restaurant in the suburbs, of which there are very few to begin with, reminds me more of a Groupon situation where the restaurants come out on the short end. In this case, it's not because they have to discount, it's because it's their reputation that takes the hit for Uber taking too long to deliver. Plus, a lot of local restaurants' margin comes not from the markup on the food, but the markup on the drinks. Many already offer carryout anyway.

atombender 7y ago

In NYC, at least, I've had Uber Eats orders delivered by a person on a scooter. Same as Seamless/GrubHub, Caviar, etc.

CydeWeys 7y ago
I don't know where exactly you are in NYC, but in Manhattan at least, it's almost always bikes, e- or otherwise.
deleted 7y ago
[deleted]

antpls 7y ago

Maybe they are investing in user habits, branding and data, such as : where are the consumers, where are the most wanted food, how frequent is it, at what time, etc. $544m are invested to grow the data machine. Uber uses the current fleet for now, but once they have more data to analyze, they can switch to a better operational model which would be hopefully profitable. What is worrying is the aggressive, anti-competitive, potentially illegal (depending on the country) subsidiaries aimed at killing the local competition.

navigatesol 7y ago
>they can switch to a better operational model which would be hopefully profitable. So they have been burning billions of dollars in the hopes that there might be a business model in the future? Maybe it's just that VCs were naive to think that taxis and food delivery were good businesses.
- antpls 7y ago
  Your sentence seems to insist on "billions", but it's not that much in regard to all the invested money in the world. According to UNESCO (http://uis.unesco.org/apps/visualisations/research-and-development-spending/ http://uis.unesco.org/apps/visualisations/research-and-devel...), the world's spending on R&D (only) is estimated to be $1.7 trillions. Apple's R&D investment for 3rd quarter of 2019 is $4.2 billions. So, yes, billions are burned in the hope of finding things. Most probably, future generations will even burn hundred of trillions.
  - freyr 7y ago
    Thanks, I'll try that brilliant logic on my wife. "Sure, hun, the Porsche was expensive, but it's not that much in regard to all the money spent in the world!"

ashelmire 7y ago

Surely there's a place that sells burritos near you?