7 ms·

That story about the pizzas was crazy. Especially the end where you have the doordash driver in on it, just pretending to deliver the pizzas. At what point woul

That story about the pizzas was crazy. Especially the end where you have the doordash driver in on it, just pretending to deliver the pizzas. At what point would Doordash notice? A thousand pizzas? A hundred thousand pizzas? A million pizzas?

rhacker 6y ago
I read that story elsewhere today, but I was left with a few holes - when the door dash driver pays for the pizza, was it their own personal credit card, or was that a door-dash issued card? That was the missing part for me. I think that they would notice at some point, and potentially trigger a fraud lawsuit - at some point the terms of service that all these people are agreeing to - would probably cover fraud. But even if not covered in the terms of service, one would probably still lose a lawsuit based on the fraud alone.
- Apocryphon 6y ago
  These hyper-growth chasing startups are too busy to notice, not to mention they have their own lawsuits to worry about. https://www.thedailymeal.com/eat/n-out-sues-doordash-delivery-service-mishandling-food/111215 https://www.thedailymeal.com/eat/n-out-sues-doordash-deliver...
- MattGaiser 6y ago
  > a door-dash issued card? DoorDash issues something called a Delight card.It is basically a prepaid debit card.
- skrtskrt 6y ago
  I mean they are knowingly reselling something for less than it costs them, without ever touching the product, and they have no agreement at all with the restaurant owner that could stipulate "hey when you sell the pizza it has to meet these criteria". They specifically avoided letting the restaurant owner know that they were being sold through DoorDash, which is sketchy and definitely would lose DoorDash some sympathy about being "defrauded". I just can't see fraud here, only a giant company that is built on losing money intentionally creating a system that loses money with zero guardrails. Then people just... used that system exactly as it was.
wmf 6y ago
Drivers are presumably tracked via GPS although who knows if the app verifies that data.
jpm_sd 6y ago
Gotta love the illustration in the original post: https://themargins.substack.com/p/doordash-and-pizza-arbitrage https://themargins.substack.com/p/doordash-and-pizza-arbitra... Not to mention some horrifying numbers: > Doordash reportedly lost an insane $450 million off $900 million in revenue in 2019 (which does make me wonder if my dream of a decentralized network of pizza arbitrageurs does exist). > Uber Eats is Uber's "most profitable division” . Uber Eats lost $461 million in Q4 2019 off of revenue of $734 million. Sometimes I need to write this out to remind myself. Uber Eats spent $1.2 billion to make $734 million. In one quarter.
- jacquesm 6y ago
  Interesting definition of profitable. Should be 'least losing' instead of 'most profitable'.
  - labster 6y ago
    It’s because on HN we don’t see the :rofl: emoji in the original post being quoted. Loss of meaning without the emoji, I’m afraid.
- christophilus 6y ago
  It really does remind me of the .com bubble in many ways. The quote from Scott McNeely[0] has sprung to mind a lot lately. - MSFT 10x sales - V 17x sales - MA 16x sales - NFLX 9x sales - BYND 23x sales - ZM 68x sales Some of those are obviously great companies with fat margins and well worth above average multiples. But ZM at 68x sales? The market feels a bit out of touch. [0] "At 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends. That assumes I can get that by my shareholders. That assumes I have zero cost of goods sold, which is very hard for a computer company. That assumes zero expenses, which is really hard with 39,000 employees. That assumes I pay no taxes, which is very hard. And that assumes you pay no taxes on your dividends, which is kind of illegal. And that assumes with zero R&D for the next 10 years, I can maintain the current revenue run rate. Now, having done that, would any of you like to buy my stock at $64? Do you realize how ridiculous those basic assumptions are? You don’t need any transparency. You don’t need any footnotes. What were you thinking?"
selimthegrim 6y ago
That isn't much different from the aluminum merry-go-round https://www.bloomberg.com/opinion/articles/2014-11-20/the-goldman-sachs-aluminum-conspiracy-was-pretty-silly https://www.bloomberg.com/opinion/articles/2014-11-20/the-go...
yborg 6y ago
Doordash is already 'in on it' on a whole different scale than the pizzeria, this is generating order flow and the real payoff is the next couple of hundred million dollars from Masayoshi. That's what they'll notice.

rhacker 6y ago

I read that story elsewhere today, but I was left with a few holes - when the door dash driver pays for the pizza, was it their own personal credit card, or was that a door-dash issued card? That was the missing part for me. I think that they would notice at some point, and potentially trigger a fraud lawsuit - at some point the terms of service that all these people are agreeing to - would probably cover fraud. But even if not covered in the terms of service, one would probably still lose a lawsuit based on the fraud alone.

Apocryphon 6y ago
These hyper-growth chasing startups are too busy to notice, not to mention they have their own lawsuits to worry about. https://www.thedailymeal.com/eat/n-out-sues-doordash-delivery-service-mishandling-food/111215 https://www.thedailymeal.com/eat/n-out-sues-doordash-deliver...
MattGaiser 6y ago
> a door-dash issued card? DoorDash issues something called a Delight card.It is basically a prepaid debit card.
skrtskrt 6y ago
I mean they are knowingly reselling something for less than it costs them, without ever touching the product, and they have no agreement at all with the restaurant owner that could stipulate "hey when you sell the pizza it has to meet these criteria". They specifically avoided letting the restaurant owner know that they were being sold through DoorDash, which is sketchy and definitely would lose DoorDash some sympathy about being "defrauded". I just can't see fraud here, only a giant company that is built on losing money intentionally creating a system that loses money with zero guardrails. Then people just... used that system exactly as it was.

wmf 6y ago

Drivers are presumably tracked via GPS although who knows if the app verifies that data.

jpm_sd 6y ago

Gotta love the illustration in the original post: https://themargins.substack.com/p/doordash-and-pizza-arbitrage https://themargins.substack.com/p/doordash-and-pizza-arbitra... Not to mention some horrifying numbers: > Doordash reportedly lost an insane $450 million off $900 million in revenue in 2019 (which does make me wonder if my dream of a decentralized network of pizza arbitrageurs does exist). > Uber Eats is Uber's "most profitable division” . Uber Eats lost $461 million in Q4 2019 off of revenue of $734 million. Sometimes I need to write this out to remind myself. Uber Eats spent $1.2 billion to make $734 million. In one quarter.

jacquesm 6y ago
Interesting definition of profitable. Should be 'least losing' instead of 'most profitable'.
- labster 6y ago
  It’s because on HN we don’t see the :rofl: emoji in the original post being quoted. Loss of meaning without the emoji, I’m afraid.
christophilus 6y ago
It really does remind me of the .com bubble in many ways. The quote from Scott McNeely[0] has sprung to mind a lot lately. - MSFT 10x sales - V 17x sales - MA 16x sales - NFLX 9x sales - BYND 23x sales - ZM 68x sales Some of those are obviously great companies with fat margins and well worth above average multiples. But ZM at 68x sales? The market feels a bit out of touch. [0] "At 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends. That assumes I can get that by my shareholders. That assumes I have zero cost of goods sold, which is very hard for a computer company. That assumes zero expenses, which is really hard with 39,000 employees. That assumes I pay no taxes, which is very hard. And that assumes you pay no taxes on your dividends, which is kind of illegal. And that assumes with zero R&D for the next 10 years, I can maintain the current revenue run rate. Now, having done that, would any of you like to buy my stock at $64? Do you realize how ridiculous those basic assumptions are? You don’t need any transparency. You don’t need any footnotes. What were you thinking?"

selimthegrim 6y ago

That isn't much different from the aluminum merry-go-round https://www.bloomberg.com/opinion/articles/2014-11-20/the-goldman-sachs-aluminum-conspiracy-was-pretty-silly https://www.bloomberg.com/opinion/articles/2014-11-20/the-go...

yborg 6y ago

Doordash is already 'in on it' on a whole different scale than the pizzeria, this is generating order flow and the real payoff is the next couple of hundred million dollars from Masayoshi. That's what they'll notice.