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I liked this article, and I like the cleverness of the scheme. But I wish it had offered more of an explanation about the economics of delivery. He said his fri

I liked this article, and I like the cleverness of the scheme. But I wish it had offered more of an explanation about the economics of delivery. He said his friend was just figuring it out: two years later, can he offer a reason for why Doordash can be losing so much money, other than a network of pizza arbitrageurs? One thing that bothered me a little was the "fuck Doordash" mentality as an excuse for something which may not legally be stealing, but is ethically equivalent to it. I think "fuck X, they deserve it" is an excuse a lot of people use, but obviously it's still wrong even if you don't like your victim, or if you can get away with it.

scarface_74 4y ago
DoorDash is ruining the reputation of a legitimate business. The correct approach is "fuck DoorDash". Delivery economics makes sense when the restaurant is doing it because the delivery drivers are also employees helping to make the order. They are getting paid for each hour they work and the stores have a set delivery area and a base.
AlbertCory 4y ago
I agree that in general, people use "fuck X, they deserve it" way too much and way inappropriately. I think, though, that when a company's whole business is dishonest and based on screwing all their stakeholders (restaurant, driver, customer) and loses money despite all that, then one may look at it differently. Your parish priest or rabbi might not, but I might.
mcculley 4y ago
It is the duty of every capitalist to exploit market inefficiencies once they are discovered. How else would the VC funds learn?
- bee_rider 4y ago
  "Here at meta-dasher, we don't actually exploit market inefficiencies -- we offer an app that connects individuals to local arbitrage opportunities, and allows them to correct the market."
gspencley 4y ago
I'm not sure I see the ethics violation. DoorDash was paying them full price and charging their customers less, which meant DoorDash was paying out of pocket to under-cut the restaurant's prices. If anything DoorDash is the unethical actor because it can cost the restaurant future business. Imagine you're a customer and you're faced with choosing to buy directly from the restaurant (for $24 a pizza) or order through DoorDash (for $16 a pizza). You're going to choose DoorDash. You are now a DoorDash customer, not a direct customer of the restaurant. Now imagine the restaurant has it's own in-house delivery service. DoorDash is undercutting the restaurant's prices to put the restaurant's drivers out of work by heavily incentivizing customers to purchase through DoorDash, all without even consulting the restaurant! Then factor in that people might mistake bad service from DoorDash as bad service by the restaurant, resulting in negative Yelp reviews and lost business and things kind of start to border on fraud a little bit. For the restaurant to realize that they can game DoorDash back to try and recoup some of the damage that DoorDash is causing them is not unethical in my opinion. It's the restaurant's business that DoorDash is messing with and the restaurant has every right to recoup every penny of damage caused... and DoorDash has contractually agreed to it by agreeing to pay what the restaurant is asking literally everyone to pay.
- shagie 4y ago
  > Imagine you're a customer and you're faced with choosing to buy directly from the restaurant (for $24 a pizza) or order through DoorDash (for $16 a pizza). It's worse than that. The pizza company appears on the web for delivery with a $16 pizza. They come in to the pizza place and get charged $24 and that's a customer negative experience. The pizza company adds delivery to their service and chases off Door Dash, and now it looks like they've raised prices by $8 (and meanwhile other pizza places in the area that are getting undercut with $16 pizzas from door dash means that the pizza company isn't getting business to be able to support the delivery drivers).
  - bee_rider 4y ago
    Just tell the customer before they get to the register to order via Doordash, to the address of the restaurant if they want the $8 discount.
game-of-throws 4y ago
I don't think there's anything ethically wrong with this. It's the textbook response to predatory pricing. Replace "bromine" with "pizza": https://fee.org/articles/herbert-dow-and-predatory-pricing/ https://fee.org/articles/herbert-dow-and-predatory-pricing/
TheCoelacanth 4y ago
The unethical part is Doordash's predatory pricing. There's an aphorism "You can't cheat an honest man". Probably not strictly true, but it applies in this case. Anyone who takes advantage of this is doing the world a favor by punishing bad actors.
bitpow 4y ago
> can he offer a reason for why Doordash can be losing so much money Just speculation, but Doordash is obviously loosing some money due to poorly implemented "tests" like these, and who knows what other experiments-at-a-loss they are running. Maybe if they toned down their "web scraping auto delivery option" program, and who knows what else, they could show a profit (and maybe they know this). But why bother if you can get away with it, and something truly innovative and profitable may come out of it.
bee_rider 4y ago
I don't think it is unethical, to accept the deal that Doordash for some reason decided to offer. I mean you'd have to read the fine print I guess since you have a relationship with Doordash as the customer using their app, which probably has some contract. It may be possibly ethically questionable to intentionally post a menu that Doordash's automated system will misinterpret (which would clearly be possible in this case, since they figured out that Doordash was charging the plain slice price for the custom one, so they could just drop the plain slice price to $1). I mean, again they didn't ask Doordash to start this relationship and they don't have any contract, so... I guess their obligation would be to honor the $1 plain slice for anyone who wants it. Maybe make it a $1 no-cheese, no-sauce slice. Another option would be to spread word about the community that Doordash offers a $8 discount on your pizza. Like, if you tell the person "hey, order on Doordash to this address, they'll give you a $8 discount and we just have to have a dude come hand the pizza off from me to you" right before they get to the register... seems pretty ethically clean to me, you are just informing people of an offer you heard about, you have no contract or relationship with Doordash, right?
Nextgrid 4y ago
> But I wish it had offered more of an explanation about the economics of delivery I believe delivery is a viable business model, but that isn't what these companies are offering. These companies are trying to monopolize access to restaurants with some "growth & engagement" sprinkled on top. A simple delivery service where you pay X amount of money to get something from point A to point B would be viable with a network of hyperlocal, real-time-geolocated couriers and modern routing software. It will however not give you a monopoly and the returns VCs hope for (however, in the end the current system doesn't either as VCs spend more money trying to undercut each other's attempts at monpolizing the vertical).

scarface_74 4y ago

DoorDash is ruining the reputation of a legitimate business. The correct approach is "fuck DoorDash". Delivery economics makes sense when the restaurant is doing it because the delivery drivers are also employees helping to make the order. They are getting paid for each hour they work and the stores have a set delivery area and a base.

AlbertCory 4y ago

I agree that in general, people use "fuck X, they deserve it" way too much and way inappropriately. I think, though, that when a company's whole business is dishonest and based on screwing all their stakeholders (restaurant, driver, customer) and loses money despite all that, then one may look at it differently. Your parish priest or rabbi might not, but I might.

mcculley 4y ago

It is the duty of every capitalist to exploit market inefficiencies once they are discovered. How else would the VC funds learn?

bee_rider 4y ago
"Here at meta-dasher, we don't actually exploit market inefficiencies -- we offer an app that connects individuals to local arbitrage opportunities, and allows them to correct the market."

gspencley 4y ago

I'm not sure I see the ethics violation. DoorDash was paying them full price and charging their customers less, which meant DoorDash was paying out of pocket to under-cut the restaurant's prices. If anything DoorDash is the unethical actor because it can cost the restaurant future business. Imagine you're a customer and you're faced with choosing to buy directly from the restaurant (for $24 a pizza) or order through DoorDash (for $16 a pizza). You're going to choose DoorDash. You are now a DoorDash customer, not a direct customer of the restaurant. Now imagine the restaurant has it's own in-house delivery service. DoorDash is undercutting the restaurant's prices to put the restaurant's drivers out of work by heavily incentivizing customers to purchase through DoorDash, all without even consulting the restaurant! Then factor in that people might mistake bad service from DoorDash as bad service by the restaurant, resulting in negative Yelp reviews and lost business and things kind of start to border on fraud a little bit. For the restaurant to realize that they can game DoorDash back to try and recoup some of the damage that DoorDash is causing them is not unethical in my opinion. It's the restaurant's business that DoorDash is messing with and the restaurant has every right to recoup every penny of damage caused... and DoorDash has contractually agreed to it by agreeing to pay what the restaurant is asking literally everyone to pay.

shagie 4y ago
> Imagine you're a customer and you're faced with choosing to buy directly from the restaurant (for $24 a pizza) or order through DoorDash (for $16 a pizza). It's worse than that. The pizza company appears on the web for delivery with a $16 pizza. They come in to the pizza place and get charged $24 and that's a customer negative experience. The pizza company adds delivery to their service and chases off Door Dash, and now it looks like they've raised prices by $8 (and meanwhile other pizza places in the area that are getting undercut with $16 pizzas from door dash means that the pizza company isn't getting business to be able to support the delivery drivers).
- bee_rider 4y ago
  Just tell the customer before they get to the register to order via Doordash, to the address of the restaurant if they want the $8 discount.

game-of-throws 4y ago

I don't think there's anything ethically wrong with this. It's the textbook response to predatory pricing. Replace "bromine" with "pizza": https://fee.org/articles/herbert-dow-and-predatory-pricing/ https://fee.org/articles/herbert-dow-and-predatory-pricing/

TheCoelacanth 4y ago

The unethical part is Doordash's predatory pricing. There's an aphorism "You can't cheat an honest man". Probably not strictly true, but it applies in this case. Anyone who takes advantage of this is doing the world a favor by punishing bad actors.

bitpow 4y ago

> can he offer a reason for why Doordash can be losing so much money Just speculation, but Doordash is obviously loosing some money due to poorly implemented "tests" like these, and who knows what other experiments-at-a-loss they are running. Maybe if they toned down their "web scraping auto delivery option" program, and who knows what else, they could show a profit (and maybe they know this). But why bother if you can get away with it, and something truly innovative and profitable may come out of it.

bee_rider 4y ago

I don't think it is unethical, to accept the deal that Doordash for some reason decided to offer. I mean you'd have to read the fine print I guess since you have a relationship with Doordash as the customer using their app, which probably has some contract. It may be possibly ethically questionable to intentionally post a menu that Doordash's automated system will misinterpret (which would clearly be possible in this case, since they figured out that Doordash was charging the plain slice price for the custom one, so they could just drop the plain slice price to $1). I mean, again they didn't ask Doordash to start this relationship and they don't have any contract, so... I guess their obligation would be to honor the $1 plain slice for anyone who wants it. Maybe make it a $1 no-cheese, no-sauce slice. Another option would be to spread word about the community that Doordash offers a $8 discount on your pizza. Like, if you tell the person "hey, order on Doordash to this address, they'll give you a $8 discount and we just have to have a dude come hand the pizza off from me to you" right before they get to the register... seems pretty ethically clean to me, you are just informing people of an offer you heard about, you have no contract or relationship with Doordash, right?

Nextgrid 4y ago

> But I wish it had offered more of an explanation about the economics of delivery I believe delivery is a viable business model, but that isn't what these companies are offering. These companies are trying to monopolize access to restaurants with some "growth & engagement" sprinkled on top. A simple delivery service where you pay X amount of money to get something from point A to point B would be viable with a network of hyperlocal, real-time-geolocated couriers and modern routing software. It will however not give you a monopoly and the returns VCs hope for (however, in the end the current system doesn't either as VCs spend more money trying to undercut each other's attempts at monpolizing the vertical).