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My question is how long this can go on for before these delivery apps have to lower their fees. The fees are pretty obscene, and it's clear that apps like Grub

My question is how long this can go on for before these delivery apps have to lower their fees. The fees are pretty obscene, and it's clear that apps like GrubHub pass that cost to the restaurant rather than the customer because they know that the customer won't want to pay that much and that restaurants at least want some amount of attention and visibility in these apps, especially since more customers are wanting to use these apps rather than ordering through some crappy website or by calling in. But I'm not convinced that apps actually should require the amount of overhead they might try and claim is responsible for these high fees. Customer and driver support for delivery apps is pretty minimal and almost always outsourced. Nowadays, most driver support is handled via text, which means you can have fewer support staff and they can just multitask. When I drove for GrubHub, when I visited the regional office, it was usually staffed by one or two people who were only there maybe a few hours out of the day(which is why, at least a few years ago, you couldn't just randomly show up). It's possible that they have way more employees at their HQ... but I have to wonder just how much of their costs are essential and not fluff generated by excessive growth from VC funding. Why bother building a lean organization if the money will just keep coming in whether or not the business model brings in enough money? All it has to do is bring in enough money to make lenders confident in the future of the business. In any case, there seems to be room for a delivery app, or a system of delivery apps, to compete with top-heavy companies like GrubHub and DoorDash. Why not run a leaner delivery app business, charge restaurants a flat fee, don't bother with a big marketing department because partnered restaurants will do most of the marketing by visibility, have restaurants pay the base delivery fee, allow drivers to keep all their tips to encourage more drivers, and pass the $3-4 deliver fee to the customer? Say you charged partnered restaurants $199 a month, and you acquired the market share of GrubHub, which is ~115,000 restaurants; that would be $22,885,000 per months of revenue. Is that really not enough to run a successful delivery app? Or is this a matter of everyone wanting to run a bajillion dollar unicorn?

holoduke 6y ago
Completely agree. I think you can even ask just 10 per month. A team of 20 people is sufficient to run this entire business.
- satyrnein 6y ago
  GrubHub has 2700 employees. I think there's more going on there than you realize.
cameronbrown 6y ago
Ignoring marketing won't help, since the restaurants aren't inventivised to promote your app. There's huge opportunity cost switching away from the incumbent apps, too much risk for most businesses.
- ghaff 6y ago
  And you have to get the restaurants to sign up, which requires marketing/sales. It does seem like the sort of thing where someone could develop the app/framework and either focus on some specific lucrative markets (denser areas of higher income cities) and/or have some sort of franchise model. Very few people do a significant amount of take out delivery when they're traveling. So long as you have a profitable business in a city, there's no particular network advantage (other than any economies of scale) to serving other cities.
- tomjen3 6y ago
  As a consumer of takeout, I would totally install and use such an app, assuming it was any good. The restaurants would be incentivized to let all their customers know about it, which means they would be more than happy to have folders around etc. Not out of the goodness of their hearts, but because they would then not be held hostage to the other apps. Your issue is building the app, getting restaurants to sign up in the first place and running the nextwork.
contravariant 6y ago
It's going to go on until someone finally decouples the delivery from the discovery of the restaurants. Right now monopolies have the advantage because people don't go to restaurants and check if they have a delivery app, but people use delivery apps to see what restaurants are available. If ever there was a killer app for the semantic web it would be a delivery API. It's not going to happen because none of the parties involved have both the motivation and capability to pull it off, but one can dream.
- BurningFrog 6y ago
  > Right now monopolies have the advantage Real monopolies are singular.
- postingawayonhn 6y ago
  > It's going to go on until someone finally decouples the delivery from the discovery of the restaurants. There's probably a business in setting up a really simple delivery network that just focuses on connecting delivery drivers/riders with restaurants. Restaurants could take orders on their website or whatever other platform they want and then send them to the delivery network.
  - wenc 6y ago
    There is. It's called Postmates, and from comments I read on delivery driver subreddits, of all the apps drivers hate this one the most for various reasons (doesn't pay well, poor coordination, etc.). Now Postmates uses an elastic workforce, so it's subject to the supply/demand constraints of driver availability. What if it were possible to hire an permanent workforce of delivery drivers to serve a restaurant cluster (say large ethnic neighborhoods)? Not all cities have restaurant clusters so this wouldn't work everywhere, but maybe with some tweaks it might.
  - contravariant 6y ago
    I don't think the delivery part itself is the main problem, there's no inherent problems with restaurants needing a long term contract with delivery personel/companies, if they get unfair terms there are no real barriers for them to do their own delivery or go to someone else. However if their delivery isn't easily discoverable then this does hurt them, and unlike with simple delivery there's not too many options to make yourself discoverable when the de facto standard is run by a single company.
sumedh 6y ago
Have you heard of ideas are easy, execution is difficult? If you think its that easy why dont you do it yourself?

holoduke 6y ago

Completely agree. I think you can even ask just 10 per month. A team of 20 people is sufficient to run this entire business.

satyrnein 6y ago
GrubHub has 2700 employees. I think there's more going on there than you realize.

cameronbrown 6y ago

Ignoring marketing won't help, since the restaurants aren't inventivised to promote your app. There's huge opportunity cost switching away from the incumbent apps, too much risk for most businesses.

ghaff 6y ago
And you have to get the restaurants to sign up, which requires marketing/sales. It does seem like the sort of thing where someone could develop the app/framework and either focus on some specific lucrative markets (denser areas of higher income cities) and/or have some sort of franchise model. Very few people do a significant amount of take out delivery when they're traveling. So long as you have a profitable business in a city, there's no particular network advantage (other than any economies of scale) to serving other cities.
tomjen3 6y ago
As a consumer of takeout, I would totally install and use such an app, assuming it was any good. The restaurants would be incentivized to let all their customers know about it, which means they would be more than happy to have folders around etc. Not out of the goodness of their hearts, but because they would then not be held hostage to the other apps. Your issue is building the app, getting restaurants to sign up in the first place and running the nextwork.

contravariant 6y ago

It's going to go on until someone finally decouples the delivery from the discovery of the restaurants. Right now monopolies have the advantage because people don't go to restaurants and check if they have a delivery app, but people use delivery apps to see what restaurants are available. If ever there was a killer app for the semantic web it would be a delivery API. It's not going to happen because none of the parties involved have both the motivation and capability to pull it off, but one can dream.

BurningFrog 6y ago
> Right now monopolies have the advantage Real monopolies are singular.
postingawayonhn 6y ago
> It's going to go on until someone finally decouples the delivery from the discovery of the restaurants. There's probably a business in setting up a really simple delivery network that just focuses on connecting delivery drivers/riders with restaurants. Restaurants could take orders on their website or whatever other platform they want and then send them to the delivery network.
- wenc 6y ago
  There is. It's called Postmates, and from comments I read on delivery driver subreddits, of all the apps drivers hate this one the most for various reasons (doesn't pay well, poor coordination, etc.). Now Postmates uses an elastic workforce, so it's subject to the supply/demand constraints of driver availability. What if it were possible to hire an permanent workforce of delivery drivers to serve a restaurant cluster (say large ethnic neighborhoods)? Not all cities have restaurant clusters so this wouldn't work everywhere, but maybe with some tweaks it might.
- contravariant 6y ago
  I don't think the delivery part itself is the main problem, there's no inherent problems with restaurants needing a long term contract with delivery personel/companies, if they get unfair terms there are no real barriers for them to do their own delivery or go to someone else. However if their delivery isn't easily discoverable then this does hurt them, and unlike with simple delivery there's not too many options to make yourself discoverable when the de facto standard is run by a single company.

sumedh 6y ago

Have you heard of ideas are easy, execution is difficult? If you think its that easy why dont you do it yourself?