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I don't get it, how would the restaurant be losing money from this behaviour? Isn't Grubhub paying the regular takeout price, same as if you order it yourself?

ayewo 6y ago
It's a bit more nuanced than that. The best way to think of food delivery businesses funded by VCs is to think of them as payday lenders. Some background reading: https://themargins.substack.com/p/doordash-and-pizza-arbitrage https://themargins.substack.com/p/doordash-and-pizza-arbitra... Be sure to also read this insightful comment left by a former GrubHub employee: https://themargins.substack.com/p/doordash-and-pizza-arbitrage/comments#comment-220885 https://themargins.substack.com/p/doordash-and-pizza-arbitra...
ghthrowaway99 6y ago
At face value non-partnered restaurants dont lose money, they simply get more customers (essentially, getting some of the services that partnered restaurants get, but for free since partnered restaurants pay fees for each order that goes through the platform) However, in truth they pay damage in reputation. If the delivery company delivers food slow, or lets it get cold, then the customer will blame the restaurant. On top of that, unpartnered restaurants will naturally get slower delivery times because the order flow involves grubhub delivery people walking in and placing an order (or calling in), whereas partnered restaurants get point of sale systems integrated with grubhub's backend. They get less accurate delivery time estimations. They might pay a much higher delivery fee or service fee. All things add up to a worse customer experience.
- an_opabinia 6y ago
  People order every day from non Amazon, non Amazon Prime sellers on Amazon. My feeling is end users know what they’re getting into as long as they’re informed the restaurant is non partnered, and your bosses just need to take the 5m to come up with a brand.
  - colejohnson66 6y ago
    I’ve heard many stories about people’s orders taking longer than 2 days to arrive[a] (sometimes even 5+ weeks). When asked, they say they ordered on Amazon and are upset at Amazon for it being late. After you explain that Amazon is also a marketplace, they understand why it’s late (it’s the seller’s fault), but they’re still upset at Amazon for not making it clear enough that it wasn’t going through Prime. [a]: I.E. non-Prime purchases (ignoring the fact that Prime purchases can also just be late)
    - leppr 6y ago
      That indicates mostly a branding/communication problem and not something fundamentally wrong with the practice of layering services over other third-party services.
    - donarb 6y ago
      People don’t realize that Amazon Prime doesn’t promise 2 day shipping from the time you order. It’s 2 day shipping from the time they fill your order, which could be a week or two later.
vkou 6y ago
Grubhub fucks up the order, the customer leaves a bad yelp/google review for the restaurant. (Because the customer was tricked into believing that they were interacting with the restaurant the entire time.) That's why this is fraud.

ayewo 6y ago

It's a bit more nuanced than that. The best way to think of food delivery businesses funded by VCs is to think of them as payday lenders. Some background reading: https://themargins.substack.com/p/doordash-and-pizza-arbitrage https://themargins.substack.com/p/doordash-and-pizza-arbitra... Be sure to also read this insightful comment left by a former GrubHub employee: https://themargins.substack.com/p/doordash-and-pizza-arbitrage/comments#comment-220885 https://themargins.substack.com/p/doordash-and-pizza-arbitra...

ghthrowaway99 6y ago

At face value non-partnered restaurants dont lose money, they simply get more customers (essentially, getting some of the services that partnered restaurants get, but for free since partnered restaurants pay fees for each order that goes through the platform) However, in truth they pay damage in reputation. If the delivery company delivers food slow, or lets it get cold, then the customer will blame the restaurant. On top of that, unpartnered restaurants will naturally get slower delivery times because the order flow involves grubhub delivery people walking in and placing an order (or calling in), whereas partnered restaurants get point of sale systems integrated with grubhub's backend. They get less accurate delivery time estimations. They might pay a much higher delivery fee or service fee. All things add up to a worse customer experience.

an_opabinia 6y ago
People order every day from non Amazon, non Amazon Prime sellers on Amazon. My feeling is end users know what they’re getting into as long as they’re informed the restaurant is non partnered, and your bosses just need to take the 5m to come up with a brand.
- colejohnson66 6y ago
  I’ve heard many stories about people’s orders taking longer than 2 days to arrive[a] (sometimes even 5+ weeks). When asked, they say they ordered on Amazon and are upset at Amazon for it being late. After you explain that Amazon is also a marketplace, they understand why it’s late (it’s the seller’s fault), but they’re still upset at Amazon for not making it clear enough that it wasn’t going through Prime. [a]: I.E. non-Prime purchases (ignoring the fact that Prime purchases can also just be late)
  - leppr 6y ago
    That indicates mostly a branding/communication problem and not something fundamentally wrong with the practice of layering services over other third-party services.
  - donarb 6y ago
    People don’t realize that Amazon Prime doesn’t promise 2 day shipping from the time you order. It’s 2 day shipping from the time they fill your order, which could be a week or two later.

vkou 6y ago

Grubhub fucks up the order, the customer leaves a bad yelp/google review for the restaurant. (Because the customer was tricked into believing that they were interacting with the restaurant the entire time.) That's why this is fraud.