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"Growth & engagement" is the main issue. Insane amounts of money are wasted on advertising, marketers, software engineers, etc not to mention subsidies to under

"Growth & engagement" is the main issue. Insane amounts of money are wasted on advertising, marketers, software engineers, etc not to mention subsidies to undercut their competitors and secure a monopoly. Food delivery is a viable business but only if the objective is truly "food delivery" and not "growth & engagement at all costs".

lotsofpulp 4y ago
I suspect they need to spend all that growth and engagement to mask the fact that enough people cannot afford to spend enough such that they earn a profit. Most people were not able to afford butlers or drivers before, and DoorDash or Uber have not changed that basic fact, even if the butler/driver is split over 3 customers per hour. Every time I see an example of a door dash order, it is a $30 per person minimum cost. The median annual wage is $44k and 75th percentile is $75k. Who is affording these on a regular basis?
- Nextgrid 4y ago
  > Most people were not able to afford butlers or drivers before, and DoorDash or Uber have not changed that basic fact, even if the butler/driver is split over 3 customers per hour. I disagree - delivered food has been a thing for a long time, back in the day done by employees of the restaurant itself. If it can work despite the driver being limited to a very specific restaurant, it should work better if the driver can be load-balanced across a wide range of restaurants near their current position to minimize downtime and travel time (in case of a driver owned by a specific restaurant, the journey back after their final delivery is a loss - doesn’t have to happen if they’re no longer bound to that specific restaurant and can deliver another restaurant’s food on that otherwise-lost journey).
  - lotsofpulp 4y ago
    That is not obvious to me. Only certain types of restaurants did delivery, and they probably had process optimizations to make it work. One being that the driver was basically paid in all cash netting the driver immediate savings from tax evasion. It seems like it could be possible, but coordinating many individually owned and operated small businesses to ensure efficiency and throughput seems like a big task. Which is not a problem, but the upside is limited - how much extra are people really willing and able to pay?
    - Nextgrid 4y ago
      > Only certain types of restaurants did delivery, and they probably had process optimizations to make it work. I think that a big part of that would be because certain types of food are primarily enjoyed taken-away instead of dine-in. It wouldn’t make sense for a dine-in restaurant to have delivery staff & vehicles (which would sit idle for the most part) given the bulk of their customers dine in. However this is exactly the problem that a restaurant-agnostic delivery service would solve. The drivers can be shared across all the restaurants in the area which not only brings delivery to restaurants who otherwise wouldn’t have it but it also theoretically makes it cheaper for the usual delivery-focused restaurants because their drivers no longer have as much downtime (as they will now be able to deliver for other restaurants in the area too).
- sokoloff 4y ago
  I can’t afford a butler or driver, either, but of course I can afford 30 minutes of such in an on-demand fashion a time or two a week.
- p1necone 4y ago
  I don't know about this argument - Pizza delivery has been a common thing for decades and it seems to work just fine.
- vkou 4y ago
  > Who is affording these on a regular basis? Mostly techies, kids who live with their parents and poor people with really poor impulse control.
- tomcam 4y ago
  > Who is affording these on a regular basis? This question has driven me to distraction for the last 15 years or so. I’ve talked to many restaurant owners and they aren’t happy because they usually give up a massive percentage (say, 25 or 30%) and yet still the delivery services add a substantial amount. I can see how this would work OK in dense urban environments but I’m in the suburbs.
reaperducer 4y ago
Food delivery is a viable business but only if the objective is truly "food delivery" and not "growth & engagement at all costs". Exactly. But not every restaurant is ideal for food delivery. That's where these delivery companies go wrong. We've had pizza delivery for at least half a century. If you lived in an area with enough density, you might also be lucky enough to have a Chinese place that delivered. Maybe McDonald's, or one or two others, again with enough density. Starbucks? Dunkin' Donuts? There's no margin there to make money on delivery, unless you're charging outrageous fees or being bankrolled by VC companies.
- Nextgrid 4y ago
  > Starbucks? McDonald's? There's no margin there to make money on delivery, unless you're charging outrageous fees I’m not sure about that - if you purely count the money that actually makes it to the drivers, it’s reasonable. The problem with these services is that besides paying for the actual driver, you’re paying about as much if not more to the company itself in the form of explicit fees as well as hidden ones (such as the markups on food items). The latter pushes the prices to unsustainable levels. If you just had to pay drivers, it could work - see my other comment (https://news.ycombinator.com/item?id=32088565 https://news.ycombinator.com/item?id=32088565) about how delivered food used to work fine despite being done by employees of the restaurant itself and despite lacking the economies of scale that restaurant-agnostic delivery drivers provide.
tomcam 4y ago
> Food delivery is a viable business but only if the objective is truly "food delivery" and not "growth & engagement at all costs". Can you give me an example of someone making it viable? Not trying to be snarky. Genuinely interested.
- whateveracct 4y ago
  There's no room for that. DD and others just loss-lead off VC bankrolls.
- Nextgrid 4y ago
  In the past, any restaurant who provided their own delivery proved it was viable despite lacking the economies of scale, tech and extra efficiency offered by restaurant-agnostic delivery drivers. Nowadays it’s impossible to compete if VCs are happy to burn money to undercut you at a loss but that doesn’t mean the underlying model is flawed - if VCs and “growth and engagement” stops being a thing there could absolutely be an independent delivery operator that doesn’t screw everyone over.
  - tomcam 4y ago
    My assessment is the same, thanks.

lotsofpulp 4y ago

I suspect they need to spend all that growth and engagement to mask the fact that enough people cannot afford to spend enough such that they earn a profit. Most people were not able to afford butlers or drivers before, and DoorDash or Uber have not changed that basic fact, even if the butler/driver is split over 3 customers per hour. Every time I see an example of a door dash order, it is a $30 per person minimum cost. The median annual wage is $44k and 75th percentile is $75k. Who is affording these on a regular basis?

Nextgrid 4y ago
> Most people were not able to afford butlers or drivers before, and DoorDash or Uber have not changed that basic fact, even if the butler/driver is split over 3 customers per hour. I disagree - delivered food has been a thing for a long time, back in the day done by employees of the restaurant itself. If it can work despite the driver being limited to a very specific restaurant, it should work better if the driver can be load-balanced across a wide range of restaurants near their current position to minimize downtime and travel time (in case of a driver owned by a specific restaurant, the journey back after their final delivery is a loss - doesn’t have to happen if they’re no longer bound to that specific restaurant and can deliver another restaurant’s food on that otherwise-lost journey).
- lotsofpulp 4y ago
  That is not obvious to me. Only certain types of restaurants did delivery, and they probably had process optimizations to make it work. One being that the driver was basically paid in all cash netting the driver immediate savings from tax evasion. It seems like it could be possible, but coordinating many individually owned and operated small businesses to ensure efficiency and throughput seems like a big task. Which is not a problem, but the upside is limited - how much extra are people really willing and able to pay?
  - Nextgrid 4y ago
    > Only certain types of restaurants did delivery, and they probably had process optimizations to make it work. I think that a big part of that would be because certain types of food are primarily enjoyed taken-away instead of dine-in. It wouldn’t make sense for a dine-in restaurant to have delivery staff & vehicles (which would sit idle for the most part) given the bulk of their customers dine in. However this is exactly the problem that a restaurant-agnostic delivery service would solve. The drivers can be shared across all the restaurants in the area which not only brings delivery to restaurants who otherwise wouldn’t have it but it also theoretically makes it cheaper for the usual delivery-focused restaurants because their drivers no longer have as much downtime (as they will now be able to deliver for other restaurants in the area too).
sokoloff 4y ago
I can’t afford a butler or driver, either, but of course I can afford 30 minutes of such in an on-demand fashion a time or two a week.
p1necone 4y ago
I don't know about this argument - Pizza delivery has been a common thing for decades and it seems to work just fine.
vkou 4y ago
> Who is affording these on a regular basis? Mostly techies, kids who live with their parents and poor people with really poor impulse control.
tomcam 4y ago
> Who is affording these on a regular basis? This question has driven me to distraction for the last 15 years or so. I’ve talked to many restaurant owners and they aren’t happy because they usually give up a massive percentage (say, 25 or 30%) and yet still the delivery services add a substantial amount. I can see how this would work OK in dense urban environments but I’m in the suburbs.

reaperducer 4y ago

Food delivery is a viable business but only if the objective is truly "food delivery" and not "growth & engagement at all costs". Exactly. But not every restaurant is ideal for food delivery. That's where these delivery companies go wrong. We've had pizza delivery for at least half a century. If you lived in an area with enough density, you might also be lucky enough to have a Chinese place that delivered. Maybe McDonald's, or one or two others, again with enough density. Starbucks? Dunkin' Donuts? There's no margin there to make money on delivery, unless you're charging outrageous fees or being bankrolled by VC companies.

Nextgrid 4y ago
> Starbucks? McDonald's? There's no margin there to make money on delivery, unless you're charging outrageous fees I’m not sure about that - if you purely count the money that actually makes it to the drivers, it’s reasonable. The problem with these services is that besides paying for the actual driver, you’re paying about as much if not more to the company itself in the form of explicit fees as well as hidden ones (such as the markups on food items). The latter pushes the prices to unsustainable levels. If you just had to pay drivers, it could work - see my other comment (https://news.ycombinator.com/item?id=32088565 https://news.ycombinator.com/item?id=32088565) about how delivered food used to work fine despite being done by employees of the restaurant itself and despite lacking the economies of scale that restaurant-agnostic delivery drivers provide.

tomcam 4y ago

> Food delivery is a viable business but only if the objective is truly "food delivery" and not "growth & engagement at all costs". Can you give me an example of someone making it viable? Not trying to be snarky. Genuinely interested.

whateveracct 4y ago
There's no room for that. DD and others just loss-lead off VC bankrolls.
Nextgrid 4y ago
In the past, any restaurant who provided their own delivery proved it was viable despite lacking the economies of scale, tech and extra efficiency offered by restaurant-agnostic delivery drivers. Nowadays it’s impossible to compete if VCs are happy to burn money to undercut you at a loss but that doesn’t mean the underlying model is flawed - if VCs and “growth and engagement” stops being a thing there could absolutely be an independent delivery operator that doesn’t screw everyone over.
- tomcam 4y ago
  My assessment is the same, thanks.