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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

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.
- rvnx 4y ago
  Restaurants can have different prices for delivery, pick up or dine-in, and this predates delivery apps. There can be many reasons. Some places actually charge less when you are ordering takeaway (because their costs are less because they don't have the costs of service or rent), and some charge more (like +1 USD per box). If the restaurant has a prime location, it makes sense that if you don't use their seats / toilets / dining room / service that you don't have to pay for it. Thinking further, why do takeaway people have to pay for the shiny location ? Every time I eat a pizza, I sponsor the nice terrace dinner of someone else in front of the Eiffel Tower. But I don't want the Eiffel Tower view, the pizza could be baked in a factory (dark kitchen) I'd be fine with it. In general, how did we get to this point that it is more expensive to order takeaway food from a restaurant than if you cooked the food by yourself ? Scale is supposed to bring the price down, not up. The more quantities of a food is produced, the less expensive it is per item. Popular restaurants run like factories, the 11th or the 271th baked salmon is going to be the same. By logic it should be considerably cheaper to produce 10'000 pizza (this is 30 per day) using professional ingredients and optimised processes than baking your own pizza at home. We got to this point of 5 USD for a beer + 20 USD for a very generic pizza in a dark kitchen. What's wrong with that ? Everything. Part of the solution could be delivery companies offering their own drinks selection and restaurants opening more takeaway-only businesses (hence, more efficient).
  - kelnos 4y ago
    > In general, how did we get to this point that it is more expensive to order takeaway food from a restaurant than if you cooked the food by yourself ?* Because it costs more for the restaurant to make it. I'm not sure where you are getting "how did we get to this point" -- this has always been the case. The restaurant not only has to pay for the cost of the ingredients, they have to pay to store those ingredients, pay for someone to assemble and cook the final dish, someone to take orders, payment processing, real estate, electricity/gas, insurance, business fees, accounting, and all that. And that's just for takeout; add dine-in or delivery and costs go up even further. When you cook yourself, you only pay for the ingredients. We don't think about the electricity/gas costs for refrigeration or cooking, or that the space in our home for our kitchen and pantry costs us money in home purchase price or rent. The main place the restaurant "wins" here is that their cost of ingredients is probably lower because of their scale. > By logic it should be considerably cheaper to produce 10'000 pizza (this is 30 per day) using professional ingredients and optimised processes than baking your own pizza at home. If you only consider the cost of ingredients, then yes, that's true.
DSMan195276 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. I'm on the fence on this, I completely agree with your analysis but I would note that they originally thought DoorDash just scraped their website incorrectly for the prices. Even with the update at the end it's not exactly clear to me what happened to cause the lower price (I would assume 'no fees' just means the price would be the same as at the restaurant, not lower). That said, whether it's unethical to abuse a mistake made by such a company is up to you, I'm certainly not losing any sleep over it :D
- kelnos 4y ago
  > it's not exactly clear to me what happened to cause the lower price (I would assume 'no fees' just means the price would be the same as at the restaurant, not lower) I believe I read elsewhere that DoorDash would (in addition to not charging fees) underprice items during their "restaurant acquisition period" as an additional way to inflate sales numbers, so when they go to the restaurant to negotiate a deal, they can say "in the past month we delivered 500 of your pizzas to customers! With your $24 price, that's $12,000!" ... while they conveniently hide that DD themselves only charged $16 per pie, and it doesn't take an economist to understand that more people will buy a product if you reduce its price by a third. Or, more relevantly, fewer people will buy a product if you "increase" its price by 50%.

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.
rvnx 4y ago
Restaurants can have different prices for delivery, pick up or dine-in, and this predates delivery apps. There can be many reasons. Some places actually charge less when you are ordering takeaway (because their costs are less because they don't have the costs of service or rent), and some charge more (like +1 USD per box). If the restaurant has a prime location, it makes sense that if you don't use their seats / toilets / dining room / service that you don't have to pay for it. Thinking further, why do takeaway people have to pay for the shiny location ? Every time I eat a pizza, I sponsor the nice terrace dinner of someone else in front of the Eiffel Tower. But I don't want the Eiffel Tower view, the pizza could be baked in a factory (dark kitchen) I'd be fine with it. In general, how did we get to this point that it is more expensive to order takeaway food from a restaurant than if you cooked the food by yourself ? Scale is supposed to bring the price down, not up. The more quantities of a food is produced, the less expensive it is per item. Popular restaurants run like factories, the 11th or the 271th baked salmon is going to be the same. By logic it should be considerably cheaper to produce 10'000 pizza (this is 30 per day) using professional ingredients and optimised processes than baking your own pizza at home. We got to this point of 5 USD for a beer + 20 USD for a very generic pizza in a dark kitchen. What's wrong with that ? Everything. Part of the solution could be delivery companies offering their own drinks selection and restaurants opening more takeaway-only businesses (hence, more efficient).
- kelnos 4y ago
  > In general, how did we get to this point that it is more expensive to order takeaway food from a restaurant than if you cooked the food by yourself ?* Because it costs more for the restaurant to make it. I'm not sure where you are getting "how did we get to this point" -- this has always been the case. The restaurant not only has to pay for the cost of the ingredients, they have to pay to store those ingredients, pay for someone to assemble and cook the final dish, someone to take orders, payment processing, real estate, electricity/gas, insurance, business fees, accounting, and all that. And that's just for takeout; add dine-in or delivery and costs go up even further. When you cook yourself, you only pay for the ingredients. We don't think about the electricity/gas costs for refrigeration or cooking, or that the space in our home for our kitchen and pantry costs us money in home purchase price or rent. The main place the restaurant "wins" here is that their cost of ingredients is probably lower because of their scale. > By logic it should be considerably cheaper to produce 10'000 pizza (this is 30 per day) using professional ingredients and optimised processes than baking your own pizza at home. If you only consider the cost of ingredients, then yes, that's true.

DSMan195276 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. I'm on the fence on this, I completely agree with your analysis but I would note that they originally thought DoorDash just scraped their website incorrectly for the prices. Even with the update at the end it's not exactly clear to me what happened to cause the lower price (I would assume 'no fees' just means the price would be the same as at the restaurant, not lower). That said, whether it's unethical to abuse a mistake made by such a company is up to you, I'm certainly not losing any sleep over it :D

kelnos 4y ago
> it's not exactly clear to me what happened to cause the lower price (I would assume 'no fees' just means the price would be the same as at the restaurant, not lower) I believe I read elsewhere that DoorDash would (in addition to not charging fees) underprice items during their "restaurant acquisition period" as an additional way to inflate sales numbers, so when they go to the restaurant to negotiate a deal, they can say "in the past month we delivered 500 of your pizzas to customers! With your $24 price, that's $12,000!" ... while they conveniently hide that DD themselves only charged $16 per pie, and it doesn't take an economist to understand that more people will buy a product if you reduce its price by a third. Or, more relevantly, fewer people will buy a product if you "increase" its price by 50%.