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DoorDash will never be profitable, because there are three businesses that need a cut from a sale: driver, restaurant, and doordash. That just makes it very exp
by satya71 6y ago
DoorDash will never be profitable, because there are three businesses that need a cut from a sale: driver, restaurant, and doordash. That just makes it very expensive.
- zymhan 6y agoThat is not a convincing argument. Middlemen exist in many markets.
- satya71 6y agoNot three middlemen in every transaction. At most two. Everyone needs ~30% cut. 1.3 * 1.3 * 1.3 = 2.2
- gamblor956 6y agoThere is only the one middleman, DoorDash, in two separate but related transactions. The restaurant is the company making the food for the customer, and the delivery person is the person delivering the food for the restaurant. DoorDash doesn't provide any food-related service except being in between the restaurant/customer and the restaurant/delivery person.
- bigbubba 6y agoThe credit card processor almost certainly being used by the customer adds another middle man.
- gamblor956 6y agoA middleman refers to someone whose role in the transaction is to bring the actual transacting parties together. While credit card processors are involved in the transaction between the customer and restaurant, they are not a middleman to the transaction because they don't bring the parties together; the parties or a third party does that. Additionally, credit card processors provide services to both sides of the transaction: they provide non-cash payment collection services to restaurants, and they provide customers a means to pay for things without immediately exchanging cash or other assets.
- dx87 6y agoTell me about it. My company gave everyone a Doordash gift card because we normally do quarterly meetings with a catered lunch, and it was $55 for 2 drinks, two burgers and 1 fry from Five Guys. Plus it took over an hour for it to be delivered.
- bluedino 6y agoOn the other hand, using promotions I can get Famous Dave’s delivered for about $5 more than it would cost for me to drive there, pick up, bring back....saves me almost an hour.
- ev1 6y agoIsn't Five Guys about $12-14/burger, $5-8/fry in-store inclusive of sales tax in the first place?
- ghaff 6y agoClose to that. I rather like a number of the "fast casual" burger places, but they're not cheap. (And it's unlikely I'd spend the money to get a half-cold soggy version delivered.)
- dmurray 6y agoDoordash can take an arbitrarily small amount, since their marginal cost per sale is very small. And restaurants and drivers both get paid in existing models of delivery food, which work fine.
- bigbubba 6y agoThey may be profitable for a time, by parasitically sucking the life out of restaurants. But when the host dies, parasites are in trouble.