5 ms·

How did they made a profit off this?

foobar1962 6y ago
They delivered pizza base with no toppings. The base was just so the boxes weren't empty. EDIT and Doordash got the price wrong (I forgot about that).
deleted 6y ago
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ljm 6y ago
Doordash priced the pizza at $16, but the pizza place charged $24. Presumably a 'growth hack' to get more users. The pizza place, seeing the difference, bought pizzas for $16 and received $24 from Door Dash, so for each purchase they were $8 better off. They also ordered plain pizza dough in larger quantities, for more profit. Presumably because they didn't have to actually make the full pizza.
- dogma1138 6y ago
  That makes more sense than someone just offering a free delivery.
- frombody 6y ago
  Technically they didn't have to make any pizzas at all. I always felt like the story about the dough was embellished a little bit to avoid being charged with fraud.
  - Slartie 6y ago
    They had to produce something that could legally be called a pizza to at least fulfill the purchase contract with DoorDash and avoid making themselves legally liable. But what would probably have worked would be to pull this off with two restaurants, each ordering pizzas from the other, with them sending the same physical pizzas around all the time. Cold and old pizza is still legally a pizza, just a bad one.
    - rainbowzootsuit 6y ago
      That reminds me of the Raines sandwich. "Minimum viable sandwich" https://www.atlasobscura.com/articles/raines-sandwich https://www.atlasobscura.com/articles/raines-sandwich So this is "Minimum viable pizza"
      - rrjjww 6y ago
        Before clicking on this I thought it was going to be about Cuomo's order in this summer that all restaurants offering drinks had to be served with food. I went to at least a couple outside bars that were serving half a piece of white bread with a slice of American cheese on it for your "meal"
    - ashtonkem 6y ago
      They have to claim that they made something that met the definition of pizza, but with the “buyer”, driver, and store colluding they could just lie.
      - Slartie 6y ago
        The first buyer is DoorDash however, and if they somehow want to take vengeance on you after you managed draining their funds in an otherwise perfectly legal way, they might just use the non-fulfillment of their initial purchase contracts as a wedge to take you to court (of course this assumes they somehow learned about that detail of your plan). I don't know if they would have any luck with that, but it's easy to prevent this from happening by actually delivering something that's basically a minimally viable pizza.
    - Mokosha 6y ago
      They could simply make a single pizza, and then deliver it to themselves N times.
    - Balgair 6y ago
      Reading through the article again, it is strongly implied that a lot of stores may have a similar arbitrage issue and the DD os getting taken to the cleaners over it. That and I don't think there are any legal issues over this as there were no contracts signed. If anything DD is the one in legal trouble over it.
- mrweasel 6y ago
  How would is that ever going to work long term? Most pizza places I frequent offer free delivery, or very cheap delivery once you get pizza for two people. The “growth hack” will never work when you compete with your supplier. Even if this was somehow going to work, once Doordash has pushed others out of the market, then they would need to raise the price significantly, pushing many to just do pickup themselfs. More suprising, to me, is that it was ever legal to list resturants without and opt in.
  - ljm 6y ago
    Growth hacks are never about sustainably growing a business, they're just there to fatten it up before parading it in front of the VCs. Of course by growth hacking, we're talking about the act of using unethical practices against users to boost certain metrics.
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josefx 6y ago
The goal is to kill the competition, no local delivery service can compete with a few million in VC funding. Once you are the only delivery in town you can raise the prices all you want and force the local restaurants into one sided deals on your terms. It also has a rather questionable legality
- tt433 6y ago
  When it's goods and not services (delivery is the service here, I guess, not the food as a good), usually it's termed dumping, and I'm fairly sure it's illegal. I don't know if that language ever gets used for services.
- jimmaswell 6y ago
  > no local delivery service can compete with a few million in VC funding A simple ordering form on the restaurant's own website always gets preference from me and seems to usually end up being the first result on Google/Google Maps.
  - jiofih 6y ago
    No, part of the problem here is that the big delivery company will always win in SEO.
    - jimmaswell 6y ago
      It doesn't in my experience. Google Five Guys near you, the actual first result ignoring ads will almost certainly be their website or even its order form. Same for every local restaurant with an order form I've tried it on.
      - kaslai 6y ago
        A lot of "local restaurant order forms" are actually sites set up by the likes of GrubHub, Uber Eats, etc. Not all of them, but it's one of the sneaky ways they use to insert themselves.
  - 6y ago

foobar1962 6y ago

They delivered pizza base with no toppings. The base was just so the boxes weren't empty. EDIT and Doordash got the price wrong (I forgot about that).

deleted 6y ago

[deleted]

ljm 6y ago

Doordash priced the pizza at $16, but the pizza place charged $24. Presumably a 'growth hack' to get more users. The pizza place, seeing the difference, bought pizzas for $16 and received $24 from Door Dash, so for each purchase they were $8 better off. They also ordered plain pizza dough in larger quantities, for more profit. Presumably because they didn't have to actually make the full pizza.

dogma1138 6y ago
That makes more sense than someone just offering a free delivery.
frombody 6y ago
Technically they didn't have to make any pizzas at all. I always felt like the story about the dough was embellished a little bit to avoid being charged with fraud.
- Slartie 6y ago
  They had to produce something that could legally be called a pizza to at least fulfill the purchase contract with DoorDash and avoid making themselves legally liable. But what would probably have worked would be to pull this off with two restaurants, each ordering pizzas from the other, with them sending the same physical pizzas around all the time. Cold and old pizza is still legally a pizza, just a bad one.
  - rainbowzootsuit 6y ago
    That reminds me of the Raines sandwich. "Minimum viable sandwich" https://www.atlasobscura.com/articles/raines-sandwich https://www.atlasobscura.com/articles/raines-sandwich So this is "Minimum viable pizza"
    - rrjjww 6y ago
      Before clicking on this I thought it was going to be about Cuomo's order in this summer that all restaurants offering drinks had to be served with food. I went to at least a couple outside bars that were serving half a piece of white bread with a slice of American cheese on it for your "meal"
  - ashtonkem 6y ago
    They have to claim that they made something that met the definition of pizza, but with the “buyer”, driver, and store colluding they could just lie.
    - Slartie 6y ago
      The first buyer is DoorDash however, and if they somehow want to take vengeance on you after you managed draining their funds in an otherwise perfectly legal way, they might just use the non-fulfillment of their initial purchase contracts as a wedge to take you to court (of course this assumes they somehow learned about that detail of your plan). I don't know if they would have any luck with that, but it's easy to prevent this from happening by actually delivering something that's basically a minimally viable pizza.
  - Mokosha 6y ago
    They could simply make a single pizza, and then deliver it to themselves N times.
  - Balgair 6y ago
    Reading through the article again, it is strongly implied that a lot of stores may have a similar arbitrage issue and the DD os getting taken to the cleaners over it. That and I don't think there are any legal issues over this as there were no contracts signed. If anything DD is the one in legal trouble over it.
mrweasel 6y ago
How would is that ever going to work long term? Most pizza places I frequent offer free delivery, or very cheap delivery once you get pizza for two people. The “growth hack” will never work when you compete with your supplier. Even if this was somehow going to work, once Doordash has pushed others out of the market, then they would need to raise the price significantly, pushing many to just do pickup themselfs. More suprising, to me, is that it was ever legal to list resturants without and opt in.
- ljm 6y ago
  Growth hacks are never about sustainably growing a business, they're just there to fatten it up before parading it in front of the VCs. Of course by growth hacking, we're talking about the act of using unethical practices against users to boost certain metrics.

deleted 6y ago

[deleted]

deleted 6y ago

[deleted]

josefx 6y ago

The goal is to kill the competition, no local delivery service can compete with a few million in VC funding. Once you are the only delivery in town you can raise the prices all you want and force the local restaurants into one sided deals on your terms. It also has a rather questionable legality

tt433 6y ago
When it's goods and not services (delivery is the service here, I guess, not the food as a good), usually it's termed dumping, and I'm fairly sure it's illegal. I don't know if that language ever gets used for services.
jimmaswell 6y ago
> no local delivery service can compete with a few million in VC funding A simple ordering form on the restaurant's own website always gets preference from me and seems to usually end up being the first result on Google/Google Maps.
- jiofih 6y ago
  No, part of the problem here is that the big delivery company will always win in SEO.
  - jimmaswell 6y ago
    It doesn't in my experience. Google Five Guys near you, the actual first result ignoring ads will almost certainly be their website or even its order form. Same for every local restaurant with an order form I've tried it on.
    - kaslai 6y ago
      A lot of "local restaurant order forms" are actually sites set up by the likes of GrubHub, Uber Eats, etc. Not all of them, but it's one of the sneaky ways they use to insert themselves.
- 6y ago