4 ms·

What do the economics look like for the old Pizza or Chinese delivery places in a pre-app world?

deleted 6y ago
[deleted]
dannyw 6y ago
Restaurant: Keeps ~85-90% of order Delivery driver: Paid a portion by restaurant, paid a portion by tips Telephone: $60 / month utility bill ---- Today: Restaurant: Keeps 60-70% of order Delivery driver: Paid a portion by Uber, paid a portion by tips Uber: Paid 30% + delivery fees, service fees See the problem?
MattGaiser 6y ago
Perhaps this is a bit dated, but one of my relatives once did delivery for a Chinese restaurant. He worked solely for tips. So in that case, the entire delivery was paid for by the customer. Not so sure about pizza, but the tip issue probably comes into play there again. The customer covered the delivery cost and a 15% tip is more than most delivery fees in my area even on small orders.
ska 6y ago
To be fair, they often also pushed depreciation onto their (young, naive) drivers. But other than that, there is essentially no marginal cost to the delivery infrastructure, you pay part of the driver cost directly (via tip), they at most take a cut to go to drivers (minimum) wages, but that's a fixed cost not % of checks.
bpicolo 6y ago
Lots of those roles paid/pay under the table. At GrubHub's scale, tax evasion doesn't work.
yibg 6y ago
I did pizza deliveries back in my youth. Got 2-4 dollars plus tips for every trip. The 2-4 dollars essentially covered vehicle costs and the tips were what I made. Thing is when I did we kind of optimized for the trip costs / payout. Deliveries only happened (for free) for orders over a certain value. During peak times (around dinner) we’d also batch orders. I’d often go out with 3 or 4 deliveries at a time and come back in about an hour with $30 or so just in tips. The 3 hours or so of dinner rush basically paid for the rest of the day.
- flatiron 6y ago
  For me the best was corporate offices. One order was an entire conference room of people ordering on the company dime with an auto 20% tip. Some times I would get close to $100 for a trip in the late 90s for 30 minutes to unload and load a car. Delivering flowers was also $10 a delivery. I would take off school on “flower holidays” and crush it at nursing homes and stuff. My parents were supportive of my hussle.
  - yibg 6y ago
    New Year’s Eve as well. Happy drunk people tip really really well. Also not sure they always knew how much they were tipping, but hey I was a broke 16 year old, I’ll take whatever is handed to me. I remember a couple of New Years eves I walked away from the night with a few hundred bucks. That was a lot of money for me at that age.
jcdavis 6y ago
Ancedotally (I don't have a ton of concrete details here): 1. From what I understand restaurants doing delivery largely were breaking even on it considering the costs - there was no third party looking to take 20-30% of the gross. 2. Again anecdotally, I suspect the old school pizza/chinese delivery places are more efficient in terms of deliveries per driver per hour. What I see with a lot of UberEats/Grubhub etc is drivers waiting a lot at restaurants, bouncing around a bunch to pick up one or 2 orders each. Vs the old-school pizza model of a driver being able to pick up a bunch of orders at once.
- kiwidrew 6y ago
  > the old school pizza/chinese delivery places are more efficient in terms of deliveries per driver per hour Precisely this! It's amazingly inefficient to dedicate an entire person (and their 1000kg car) for the delivery of a single 2kg takeaway meal. Uber tries to "solve" the problem by giving drivers two orders at the same time, but their implementation is terrible: 1. Sometimes the restaurant doesn't have both orders ready at the same time, so one of the orders is growing cold and soggy. 2. Uber's dispatch system has such a strong preference for batching deliveries together that a driver will often get assigned two orders that are going in opposite directions from the restaurant! 3. The high-volume restaurants (like McDonald's) have managed to exempt themselves from the double-delivery system [for the obvious reason that customers hate getting cold food!].
freewilly1040 6y ago
I did delivery for a slightly upscale pizza restaurant about ten years ago. For lower tier chain restaurants I think delivery driving was a scam in which the restaurant relied on the employee being unable to calculate that costs of gas + vehicle depreciation made the effective wage of driving delivery very close to zero. I think the old world was restaurants squeezing delivery drivers. Now it's the app squeezing both the restaurant and the delivery driver.

deleted 6y ago

[deleted]

Restaurant: Keeps ~85-90% of order Delivery driver: Paid a portion by restaurant, paid a portion by tips Telephone: $60 / month utility bill ---- Today: Restaurant: Keeps 60-70% of order Delivery driver: Paid a portion by Uber, paid a portion by tips Uber: Paid 30% + delivery fees, service fees See the problem?

MattGaiser 6y ago

Perhaps this is a bit dated, but one of my relatives once did delivery for a Chinese restaurant. He worked solely for tips. So in that case, the entire delivery was paid for by the customer. Not so sure about pizza, but the tip issue probably comes into play there again. The customer covered the delivery cost and a 15% tip is more than most delivery fees in my area even on small orders.

ska 6y ago

To be fair, they often also pushed depreciation onto their (young, naive) drivers. But other than that, there is essentially no marginal cost to the delivery infrastructure, you pay part of the driver cost directly (via tip), they at most take a cut to go to drivers (minimum) wages, but that's a fixed cost not % of checks.

bpicolo 6y ago

Lots of those roles paid/pay under the table. At GrubHub's scale, tax evasion doesn't work.

yibg 6y ago

I did pizza deliveries back in my youth. Got 2-4 dollars plus tips for every trip. The 2-4 dollars essentially covered vehicle costs and the tips were what I made. Thing is when I did we kind of optimized for the trip costs / payout. Deliveries only happened (for free) for orders over a certain value. During peak times (around dinner) we’d also batch orders. I’d often go out with 3 or 4 deliveries at a time and come back in about an hour with $30 or so just in tips. The 3 hours or so of dinner rush basically paid for the rest of the day.

flatiron 6y ago
For me the best was corporate offices. One order was an entire conference room of people ordering on the company dime with an auto 20% tip. Some times I would get close to $100 for a trip in the late 90s for 30 minutes to unload and load a car. Delivering flowers was also $10 a delivery. I would take off school on “flower holidays” and crush it at nursing homes and stuff. My parents were supportive of my hussle.
- yibg 6y ago
  New Year’s Eve as well. Happy drunk people tip really really well. Also not sure they always knew how much they were tipping, but hey I was a broke 16 year old, I’ll take whatever is handed to me. I remember a couple of New Years eves I walked away from the night with a few hundred bucks. That was a lot of money for me at that age.

jcdavis 6y ago

Ancedotally (I don't have a ton of concrete details here): 1. From what I understand restaurants doing delivery largely were breaking even on it considering the costs - there was no third party looking to take 20-30% of the gross. 2. Again anecdotally, I suspect the old school pizza/chinese delivery places are more efficient in terms of deliveries per driver per hour. What I see with a lot of UberEats/Grubhub etc is drivers waiting a lot at restaurants, bouncing around a bunch to pick up one or 2 orders each. Vs the old-school pizza model of a driver being able to pick up a bunch of orders at once.

kiwidrew 6y ago
> the old school pizza/chinese delivery places are more efficient in terms of deliveries per driver per hour Precisely this! It's amazingly inefficient to dedicate an entire person (and their 1000kg car) for the delivery of a single 2kg takeaway meal. Uber tries to "solve" the problem by giving drivers two orders at the same time, but their implementation is terrible: 1. Sometimes the restaurant doesn't have both orders ready at the same time, so one of the orders is growing cold and soggy. 2. Uber's dispatch system has such a strong preference for batching deliveries together that a driver will often get assigned two orders that are going in opposite directions from the restaurant! 3. The high-volume restaurants (like McDonald's) have managed to exempt themselves from the double-delivery system [for the obvious reason that customers hate getting cold food!].

freewilly1040 6y ago

I did delivery for a slightly upscale pizza restaurant about ten years ago. For lower tier chain restaurants I think delivery driving was a scam in which the restaurant relied on the employee being unable to calculate that costs of gas + vehicle depreciation made the effective wage of driving delivery very close to zero. I think the old world was restaurants squeezing delivery drivers. Now it's the app squeezing both the restaurant and the delivery driver.