6 ms·

I don't understand how couriers are extracting any margin from restaurants.

by say_it_as_it_is 6y ago

deleted 6y ago
[deleted]
tremon 6y ago
They don't. They make their margin by fleecing investors.
- ghaff 6y ago
  Their negative margin.
novia 6y ago
Right now restaurants are in a damned if you do damned if you don't situation with the various delivery services out there. If the restaurants explicitly agree to do business with grubhub and the like, they have to give the delivery service a 10% cut. The delivery service also takes a percentage cut on the customer side. I think there's the expectation that the restaurants keep charging the delivery service the same amount for food being delivered as they charge anyone who orders food from the restaurant and picks it up. This forces restaurants to raise the price for all their customers to pay for that 10% cut. Have you noticed that the prices for food via delivery are higher than the price for food you pickup? That's not due to the restaurant charging the delivery service a discriminatory price, that's actually the third way that the food delivery service takes a cut. Now, as a restaurant owner, you look at all these facts and decide that the delivery companies are fleecing you. You decide you'll use the waiters and waitresses you already had on staff to deliver the food to your customers, and you'll charge them something like $5 for delivery. Not really that unreasonable, given the circumstances, right? Well, what happens in those cases is that the delivery companies will list the restaurant anyways. And they'll offer free delivery. And they'll charge less for your food online than you charge them. They take the financial hit so later they can come to the restaurant owner with the data to show that they really need the delivery service after all. They'll undercut your business to get a greater market share. They've got lots of VC money to burn, that you, as a restaurant owner, can't compete with. Through all of this, customers will leave negative reviews on Yelp, for the restaurant, when the wrong food is delivered, or their food is cold, or their order was delivered to the wrong place. The reputation of the restaurant takes a hit due to the third party's shoddy delivery people. That's what this law is attempting to address.
- jimmaswell 6y ago
  So in the second scenario, you get to keep on selling food for full price and the delivery companies generate business for you for free, but it's a bad deal because .. a few people might leave bad reviews on yelp when something is clearly DoorDash's fault? It sounds like a good deal to me. You get bad reviews from idiots no matter what anyway.
  - novia 6y ago
    In the second scenario you will not be able to pay the waiters you had on staff before the pandemic. There's nothing for them to do (assuming the restaurant moves to carryout only, as is currently mandated in DC.) You get paid for the food from the delivery service, but you don't see any tips.
  - SamoyedFurFluff 6y ago
    > a few people might leave bad reviews on yelp when something is clearly DoorDash's fault? If you don’t have a good set up for delivery, the bad reviews will not be “a few” and it will certainly be more than what you would’ve otherwise had. There are examples of restaurants receiving literally dozens of negative reviews from this in a short period of time.
- say_it_as_it_is 6y ago
  Thanks for giving so much more color. I'm only focusing on one specific argument, though. I am not ignoring what you are presenting but challenging an invalid claim on profit extraction. A courier service is extracting profits no more than a waiter or waitress is. Whether it's staff (waiter) or contractor (courier), both are providing "delivery" services in exchange for fees. A waiter offers internal delivery within the restaurant. A courier offers external delivery to the home. Counting the courier's myriad cuts and how it monetizes its services isn't revealing profit extraction. You're revealing how couriers are paid for their services (10% of the bill + market premium).
mbesto 6y ago
The courier price (in the app) isn't the same price as the one when you physically go into the restaurant. IIRC its 25~35% higher. Source - good friend is a restaurant owner.
- say_it_as_it_is 6y ago
  If I buy something from you for $10 and then sell it to someone else for $15, I haven't taken anything away from you. You have your price and I have mine.
  - supernova87a 6y ago
    Yeah, but if my marked up $15 thing you sell to someone else is crappy because of your handling, and now the customer associates my name with expensive, crappy product, my brand has been spoiled by you.
    - say_it_as_it_is 6y ago
      You're presenting an issue that I agree with you about but unfortunately what you are arguing is a conflation of issues. The comment I am responding to is one that I've seen/heard in the context of courier services in that there is a profit extraction. I ask people to clarify but they never seem to do so. Instead, there's an echo chamber repeating what others have said without taking a moment to think about whether the argument is valid. What you are referring to isn't about profit extraction. It's about brands, reputation, distribution rights, etc. These are valid, separate concerns not related to the question I'm asking. The profit extraction argument is invalid until proven otherwise.
    - curryst 6y ago
      And yet most people don't struggle to realize that when your UPS chucks your package at your house and it breaks, that's UPS' fault, not whoever you ordered from. This whole argument revolves around a very uncharitable assumption that people are incredibly stupid and incapable of comprehending that the creation of the food and the delivery of the food are handled by two different parties. If that's the case, the more important thing to do here is cut off the average person from any financial instruments. They're incapable of assessing a simple two party process, they're certainly incapable of accessing the stock market, and allowing them access is predatory. /s

I don't understand how couriers are extracting any margin from restaurants.

deleted 6y ago

[deleted]

tremon 6y ago

They don't. They make their margin by fleecing investors.

ghaff 6y ago
Their negative margin.

novia 6y ago

Right now restaurants are in a damned if you do damned if you don't situation with the various delivery services out there. If the restaurants explicitly agree to do business with grubhub and the like, they have to give the delivery service a 10% cut. The delivery service also takes a percentage cut on the customer side. I think there's the expectation that the restaurants keep charging the delivery service the same amount for food being delivered as they charge anyone who orders food from the restaurant and picks it up. This forces restaurants to raise the price for all their customers to pay for that 10% cut. Have you noticed that the prices for food via delivery are higher than the price for food you pickup? That's not due to the restaurant charging the delivery service a discriminatory price, that's actually the third way that the food delivery service takes a cut. Now, as a restaurant owner, you look at all these facts and decide that the delivery companies are fleecing you. You decide you'll use the waiters and waitresses you already had on staff to deliver the food to your customers, and you'll charge them something like $5 for delivery. Not really that unreasonable, given the circumstances, right? Well, what happens in those cases is that the delivery companies will list the restaurant anyways. And they'll offer free delivery. And they'll charge less for your food online than you charge them. They take the financial hit so later they can come to the restaurant owner with the data to show that they really need the delivery service after all. They'll undercut your business to get a greater market share. They've got lots of VC money to burn, that you, as a restaurant owner, can't compete with. Through all of this, customers will leave negative reviews on Yelp, for the restaurant, when the wrong food is delivered, or their food is cold, or their order was delivered to the wrong place. The reputation of the restaurant takes a hit due to the third party's shoddy delivery people. That's what this law is attempting to address.

jimmaswell 6y ago
So in the second scenario, you get to keep on selling food for full price and the delivery companies generate business for you for free, but it's a bad deal because .. a few people might leave bad reviews on yelp when something is clearly DoorDash's fault? It sounds like a good deal to me. You get bad reviews from idiots no matter what anyway.
- novia 6y ago
  In the second scenario you will not be able to pay the waiters you had on staff before the pandemic. There's nothing for them to do (assuming the restaurant moves to carryout only, as is currently mandated in DC.) You get paid for the food from the delivery service, but you don't see any tips.
- SamoyedFurFluff 6y ago
  > a few people might leave bad reviews on yelp when something is clearly DoorDash's fault? If you don’t have a good set up for delivery, the bad reviews will not be “a few” and it will certainly be more than what you would’ve otherwise had. There are examples of restaurants receiving literally dozens of negative reviews from this in a short period of time.
say_it_as_it_is 6y ago
Thanks for giving so much more color. I'm only focusing on one specific argument, though. I am not ignoring what you are presenting but challenging an invalid claim on profit extraction. A courier service is extracting profits no more than a waiter or waitress is. Whether it's staff (waiter) or contractor (courier), both are providing "delivery" services in exchange for fees. A waiter offers internal delivery within the restaurant. A courier offers external delivery to the home. Counting the courier's myriad cuts and how it monetizes its services isn't revealing profit extraction. You're revealing how couriers are paid for their services (10% of the bill + market premium).

mbesto 6y ago

The courier price (in the app) isn't the same price as the one when you physically go into the restaurant. IIRC its 25~35% higher. Source - good friend is a restaurant owner.

say_it_as_it_is 6y ago
If I buy something from you for $10 and then sell it to someone else for $15, I haven't taken anything away from you. You have your price and I have mine.
- supernova87a 6y ago
  Yeah, but if my marked up $15 thing you sell to someone else is crappy because of your handling, and now the customer associates my name with expensive, crappy product, my brand has been spoiled by you.
  - say_it_as_it_is 6y ago
    You're presenting an issue that I agree with you about but unfortunately what you are arguing is a conflation of issues. The comment I am responding to is one that I've seen/heard in the context of courier services in that there is a profit extraction. I ask people to clarify but they never seem to do so. Instead, there's an echo chamber repeating what others have said without taking a moment to think about whether the argument is valid. What you are referring to isn't about profit extraction. It's about brands, reputation, distribution rights, etc. These are valid, separate concerns not related to the question I'm asking. The profit extraction argument is invalid until proven otherwise.
  - curryst 6y ago
    And yet most people don't struggle to realize that when your UPS chucks your package at your house and it breaks, that's UPS' fault, not whoever you ordered from. This whole argument revolves around a very uncharitable assumption that people are incredibly stupid and incapable of comprehending that the creation of the food and the delivery of the food are handled by two different parties. If that's the case, the more important thing to do here is cut off the average person from any financial instruments. They're incapable of assessing a simple two party process, they're certainly incapable of accessing the stock market, and allowing them access is predatory. /s