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A number of anti-competitive business practices, such as offering delivery for restaurants without telling them. Previous discussion: https://news.ycombinator.

A number of anti-competitive business practices, such as offering delivery for restaurants without telling them. Previous discussion: https://news.ycombinator.com/item?id=23216852 https://news.ycombinator.com/item?id=23216852

andrewnicolalde 6y ago
Honest question, how is that anticompetitive?
- ceejayoz 6y ago
  The Grubhubs of the world have substantially better SEO juice; if they start offering delivery for your restaurant, their listing is probably going to wind up above yours. Once a substantial portion of a restaurant's orders come in this way, they can cut off the flow at will. "Sign a contract with us, or these folks will go elsewhere".
tonyarkles 6y ago
There’s a really interesting liability question that comes along with that. If I order food from a restaurant via a delivery service that has no contractual relationship with them, and happen to get sick, who’s on the hook for that? I, legally, have no business relationship with the restaurant in that circumstance.
- zwily 6y ago
  Legally, do you have a business relationship with a company you buy a product from on Amazon?
  - tonyarkles 6y ago
    That’s an interesting comparison! I admit it I took business law a long time ago, but I think the answer is: it depends. You’d also need to dig deep into the TOS for both the consumer side and the seller side. But ignoring the specific details, here’s my general thought process: - products sold directly by Amazon: you have products sourced through (nominally) a legitimate supply chain, where there are legal agreements for Amazon to be a distributor of the products. If the product is faulty, Amazon is likely protected by those agreements and the liability will likely ripple back to the OEM. But, Amazon sold the product to you, and depending on consumer protection laws in your jurisdiction, may ultimately be responsible if, say, the manufacturer goes out of business. - Fulfilled by Amazon: this gets trickier. In this case, it’s relatively clear that you’re not purchasing the product from Amazon, but rather from a company that has stored their product in Amazon’s warehouse. It seems to me that Amazon is less likely to be on the hook for this. - Third-party sellers: Amazon is mostly just a catalogue and payment processor in this situation, not to different than Etsy. Most likely the seller is on the hook here and not Amazon. Depending on how the seller came to acquire the product (legit supply chain or other), the manufacturer may or may not be on the hook via the distribution-agreement ripple. (For example, an independent company that refurbs broken phones and resells them on Amazon is unlikely to create liability for Samsung) In the delivery case, we’ve got an unlicensed (health inspector-wise) company distributing prepared food from a vendor they have no formal agreement with. If someone were to get sick, it seems pretty reasonable for the restaurant to shrug and say “we followed proper food handling protocols, maybe the liability should go onto the unlicensed company that bought our food, did who knows what with it, and resold it without our permission”.
    - ikeboy 6y ago
      In the Amazon case, different courts have said different things. You're right that if Amazon sold it directly they're definitely liable. But even if a third party sold it, there's an argument (which some courts have accepted) that Amazon is the "real" retailer. Substance over form. Note that Amazon doesn't even give FBA sellers the customer address anymore. They're effectively a retailer who just pays suppliers on consignment.
- vorpalhex 6y ago
  Not a lawyer but in this case it seems like the delivery company is placing the actual end order with the restaurant on your behalf and is acting as the proxy, so any issues you would take up with the delivery company. The delivery company may or may not have the ability to rectify issues at the end of the month with the restaurant depending on their relationship.
  - tonyarkles 6y ago
    Yeah, agree. And in the case of the companies that are reselling restaurant food without the restaurant’s permission/agreement, the “delivery” company is probably on the hook.
tanilama 6y ago
Can't the company just deliver the food?
- shagie 6y ago
  If delivery isn't a core part of the business and there isn't something for the delivery driver to do when there are no deliveries, having staff to do those deliveries isn't viable. At my local pizza place, the delivery drivers are also wait staff and cooks (not primarily, but are able to serve in those capacities). When there are no deliveries, they're working (and getting paid) - the majority of the time, they're a pizza place and doing deliveries. Dominoes excels at doing this at scale. But if you're the local sit down brew pub delivery isn't part of your standard thing. You can't hire a person to be a driver with the expectation that they'll do one delivery a night... and then what do you do on the nights they don't work? A restaurant that isn't set up with deliveries being a primary source of getting to food to the customer - which includes having the staffing levels/tasks for delivery high and low - the economics of it doesn't favor adding staff to do it. Note that deliveries also take a certain commitment of capital to make sure that the packaging for the food is appropriate for take away and that the delivery vehicle has the proper things to make that work (keeping food hot or cold as appropriate). Having staff that can meet the demand as appropriate is key there for customer expectations. If you call for delivery and the wait time is 2h because they only have one driver that does an out and back each time - that's not going to be good. So they could... but it an investment in staff that needs to be flexible in time and task, in packing for takeout, and in vehicle equipment. Unless this is to add a reasonable bit to revenue, the additional planning and logistical difficulty isn't worth it.
adrr 6y ago
I don't see how that is anti-competitive. I buy my favorite sandwiches through these services because the deli doesn't offer delivery services. They are providing me with a service and i am paying for it higher prices and a delivery fee. Deli still gets the same amount of money if i walked in and bought it. Its like expedited passport services where you pay someone to go stand at the passport office line instead of doing it yourself. No one calls those services anti-competitive.
- albntomat0 6y ago
  If that's the extent of what the delivery service does, that's fine. When the delivery service makes its own website/phone number, pretending to be the restaurant and intercepting its normal business, or starts doing deliveries without notifying the restaurant (potentially hurting the reputation of the restaurant), that's where the issues emerge. https://www.saddlebackbbq.com/how-google-doordash-grubhub-conspire-screw-local-restaurants https://www.saddlebackbbq.com/how-google-doordash-grubhub-co... Previous discussion: https://news.ycombinator.com/item?id=23194727 https://news.ycombinator.com/item?id=23194727 https://www.buzzfeednews.com/article/venessawong/grubhub-phone-order-call-fee-coronavirus https://www.buzzfeednews.com/article/venessawong/grubhub-pho...

andrewnicolalde 6y ago

Honest question, how is that anticompetitive?

ceejayoz 6y ago
The Grubhubs of the world have substantially better SEO juice; if they start offering delivery for your restaurant, their listing is probably going to wind up above yours. Once a substantial portion of a restaurant's orders come in this way, they can cut off the flow at will. "Sign a contract with us, or these folks will go elsewhere".

tonyarkles 6y ago

There’s a really interesting liability question that comes along with that. If I order food from a restaurant via a delivery service that has no contractual relationship with them, and happen to get sick, who’s on the hook for that? I, legally, have no business relationship with the restaurant in that circumstance.

zwily 6y ago
Legally, do you have a business relationship with a company you buy a product from on Amazon?
- tonyarkles 6y ago
  That’s an interesting comparison! I admit it I took business law a long time ago, but I think the answer is: it depends. You’d also need to dig deep into the TOS for both the consumer side and the seller side. But ignoring the specific details, here’s my general thought process: - products sold directly by Amazon: you have products sourced through (nominally) a legitimate supply chain, where there are legal agreements for Amazon to be a distributor of the products. If the product is faulty, Amazon is likely protected by those agreements and the liability will likely ripple back to the OEM. But, Amazon sold the product to you, and depending on consumer protection laws in your jurisdiction, may ultimately be responsible if, say, the manufacturer goes out of business. - Fulfilled by Amazon: this gets trickier. In this case, it’s relatively clear that you’re not purchasing the product from Amazon, but rather from a company that has stored their product in Amazon’s warehouse. It seems to me that Amazon is less likely to be on the hook for this. - Third-party sellers: Amazon is mostly just a catalogue and payment processor in this situation, not to different than Etsy. Most likely the seller is on the hook here and not Amazon. Depending on how the seller came to acquire the product (legit supply chain or other), the manufacturer may or may not be on the hook via the distribution-agreement ripple. (For example, an independent company that refurbs broken phones and resells them on Amazon is unlikely to create liability for Samsung) In the delivery case, we’ve got an unlicensed (health inspector-wise) company distributing prepared food from a vendor they have no formal agreement with. If someone were to get sick, it seems pretty reasonable for the restaurant to shrug and say “we followed proper food handling protocols, maybe the liability should go onto the unlicensed company that bought our food, did who knows what with it, and resold it without our permission”.
  - ikeboy 6y ago
    In the Amazon case, different courts have said different things. You're right that if Amazon sold it directly they're definitely liable. But even if a third party sold it, there's an argument (which some courts have accepted) that Amazon is the "real" retailer. Substance over form. Note that Amazon doesn't even give FBA sellers the customer address anymore. They're effectively a retailer who just pays suppliers on consignment.
vorpalhex 6y ago
Not a lawyer but in this case it seems like the delivery company is placing the actual end order with the restaurant on your behalf and is acting as the proxy, so any issues you would take up with the delivery company. The delivery company may or may not have the ability to rectify issues at the end of the month with the restaurant depending on their relationship.
- tonyarkles 6y ago
  Yeah, agree. And in the case of the companies that are reselling restaurant food without the restaurant’s permission/agreement, the “delivery” company is probably on the hook.

tanilama 6y ago

Can't the company just deliver the food?

shagie 6y ago
If delivery isn't a core part of the business and there isn't something for the delivery driver to do when there are no deliveries, having staff to do those deliveries isn't viable. At my local pizza place, the delivery drivers are also wait staff and cooks (not primarily, but are able to serve in those capacities). When there are no deliveries, they're working (and getting paid) - the majority of the time, they're a pizza place and doing deliveries. Dominoes excels at doing this at scale. But if you're the local sit down brew pub delivery isn't part of your standard thing. You can't hire a person to be a driver with the expectation that they'll do one delivery a night... and then what do you do on the nights they don't work? A restaurant that isn't set up with deliveries being a primary source of getting to food to the customer - which includes having the staffing levels/tasks for delivery high and low - the economics of it doesn't favor adding staff to do it. Note that deliveries also take a certain commitment of capital to make sure that the packaging for the food is appropriate for take away and that the delivery vehicle has the proper things to make that work (keeping food hot or cold as appropriate). Having staff that can meet the demand as appropriate is key there for customer expectations. If you call for delivery and the wait time is 2h because they only have one driver that does an out and back each time - that's not going to be good. So they could... but it an investment in staff that needs to be flexible in time and task, in packing for takeout, and in vehicle equipment. Unless this is to add a reasonable bit to revenue, the additional planning and logistical difficulty isn't worth it.

adrr 6y ago

I don't see how that is anti-competitive. I buy my favorite sandwiches through these services because the deli doesn't offer delivery services. They are providing me with a service and i am paying for it higher prices and a delivery fee. Deli still gets the same amount of money if i walked in and bought it. Its like expedited passport services where you pay someone to go stand at the passport office line instead of doing it yourself. No one calls those services anti-competitive.

albntomat0 6y ago
If that's the extent of what the delivery service does, that's fine. When the delivery service makes its own website/phone number, pretending to be the restaurant and intercepting its normal business, or starts doing deliveries without notifying the restaurant (potentially hurting the reputation of the restaurant), that's where the issues emerge. https://www.saddlebackbbq.com/how-google-doordash-grubhub-conspire-screw-local-restaurants https://www.saddlebackbbq.com/how-google-doordash-grubhub-co... Previous discussion: https://news.ycombinator.com/item?id=23194727 https://news.ycombinator.com/item?id=23194727 https://www.buzzfeednews.com/article/venessawong/grubhub-phone-order-call-fee-coronavirus https://www.buzzfeednews.com/article/venessawong/grubhub-pho...