5 ms·
> Would this be fraud? No. This is not fraud. Doordash and the pizza company had no contractual relationship. The pizza company did not contract with Doordash
by blendergeek 4y ago
> Would this be fraud?
No. This is not fraud.
Doordash and the pizza company had no contractual relationship. The pizza company did not contract with Doordash to run an "$8 off" pizza promotion. Rather, Doordash, in an attempt to claim a near monopoly on the food ordering market, chose to sell food at a loss. The goal of this strategy is to get consumers used to buying from Doordash (while prices are low). Once a sizable percentage of orders are going through Doordash, Doordash can raise fees and refuse to list companies that don't pay up. The only way to get this sort of market share is through tactics like the one described (selling food at a loss).
When the pizza man chooses to buy his own pizza on Doordash, he is merely affording himself of the same cheap pizza that Doordash is providing to anyone else. Doordash is behaving rationally here. They need to capture the mindshare of users. By providing pizza delivery at prices that are lower than economically viable, Doordash will get this. The pizza man is simply choosing to benefit while he can. Long live the pizza man!
- colpabar 4y agoIf he wanted to really stick it to them, he'd complain that his pizzas were just dough and get himself some doordash credits :)
- deleted 4y ago[deleted]
- MichaelCollins 4y ago> Doordash and the pizza company had no contractual relationship. Don't Doordash and the pizza company owner have a contractual relationship when the pizza shop owner agrees to the Terms of Service for using the Doordash app to order food? I have no clue if the doordash TOS forbids such usage, but it might?
- joshstrange 4y agoNo, that was kind of the point. Doordash listed them without the restaurant's approval. In fact it was a surprise to the pizza place they were on DD.
- chrisseaton 4y agoThe restaurant agrees to Doordash’s terms when they buy pizza, not sell.
- Retric 4y agoThe restaurant did not agree to anything, at most the person ordering food agreed to something.
- chrisseaton 4y ago> the person ordering food agreed to something That’s… the restaurant owner, though.
- Retric 4y agoWhich is legally distinct from the resturant.
- chrisseaton 4y agoIf the owner agreed not to create a nuisance and they’re order creates a nuisance then they’re not meeting their agreement.
- Retric 4y agoIn your hypothetical case they could sue the owner but not the company.
- MichaelCollins 4y ago> at most the person ordering food agreed to something. That's the part I'm talking about. The restaurant owner agreed to something in order to use the app to buy pizza.
- 4y ago
- deleted 4y ago[deleted]
- rideontime 4y agoNot necessarily, considering how DoorDash adds restaurants to their site without their knowledge and foists the customer service burden onto them. e: Yes, the original article makes it clear that he didn't sign up for this: https://www.readmargins.com/p/doordash-and-pizza-arbitrage https://www.readmargins.com/p/doordash-and-pizza-arbitrage
- MichaelCollins 4y agoI don't mean a TOS between Doordash and the restaurant, I mean the TOS between Doordash and customers of Doordash using the Doordash app. The pizzeria owner signed up to Doordash as a customer, in order to buy pizzas.
- not2b 4y agoAnd he honored this contract. He paid $16 for each pizza, just as Doordash offered. The fact that Doordash was selling pizzas for a loss was Doordash's problem, not his.
- MichaelCollins 4y ago> And he honored this contract. I don't know, what does the TOS actually say? The app's TOS might say something like "you can't use this app to order food from a business you own", or something else that might forbid this scheme. Maybe it doesn't though, I don't know and haven't read it, but I think it could.
- rideontime 4y agoI have no reason to believe the TOS contains a clause like that.
- chrisseaton 4y agoI’d argue it’s clearly a ‘nuisance’, which is prohibited by the TOS.
- Retric 4y agoI don't think you could add such language to a TOS and have it be legally binding.
- bee_rider 4y agoPotentially yes, and I think people are skimming over this because they want to agree with what the shop owner is doing (because Doordash sucks and is a predatory business). To buy from Doordash, you have to agree to some TOS on their app. Sales, as has been pointed out, no. But buying, yes. He could be violating that TOS, if they try to prevent this sort of thing. Since this loophole was reported on in a fairly well-known publication years ago, it isn't ridiculous to think they have something in there. IANAL, but I wonder if he could coordinate with somebody to have them order the pizzas instead, so he doesn't have to agree to anything. A funny idea might be to start offering Doordash's discount to in-person customers who were going to buy the pizza anyway. "Just order on this stupid app and set your delivery location to our address, then we'll Doordash it across the room or whatever." A further extension of this would be, if he can figure out what Doordash is parsing wrong on his online menu, then maybe he could try to work out how to get that field to show up as $1. I'm not sure if it was this one, but there was some place that had had their fancy custom pizza listed with their plain cheese pizza price. So maybe they could start their menu with something like: Plain pizza raw (subheader: It is literally a lump of uncooked dough, don't buy this): $1
- tpxl 4y ago> Rather, Doordash, in an attempt to claim a near monopoly on the food ordering market, chose to sell food at a loss. This is called price dumping for anyone that wants to read up on it.
- em-bee 4y agoand it's illegal in some places
- AlexandrB 4y agoUnfortunately it's usually only illegal when a monopoly or other dominant company does it. SV seems to have worked around this by funding "startups" so much that they have the capital to engage in dumping before becoming dominant in an industry.
- em-bee 4y agoat least in the US doordash already reached more than 50%. i believe if it can be argued that it was only able to achieve this through predatory pricing then at this point it should be possible to stop it from continuing that pricing strategy.
- falcor84 4y agoLink please