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The problem is in an industry like resturaunts that are low margins is that food ordering apps introduce a "too many cooks in the kitchen" problem. The restaura

The problem is in an industry like resturaunts that are low margins is that food ordering apps introduce a "too many cooks in the kitchen" problem. The restaurants add markup to the food to make a profit, this they split amongst themselves internally though there is usually very little to spare. Food delivery apps not only introduce a delivery driver into this mix that has to get paid but also a cash hungry VC startup that is burning R&D costs like there's no tomorrow. Suddenly what you end up with is no one is making enough money to cover their costs with the current food price so each party starts adding their own fees to cover the losses and cut on other costs to save money. And then what you end up with is very expensive food and maybe one or two parties in the "kitchen" actually turn a profit.

pessimizer 3y ago
I'm starting to think of capitalism as rule by "winner's curse" (https://en.wikipedia.org/wiki/Winner's_curse) https://en.wikipedia.org/wiki/Winner's_curse). The winners in VC-funded tech spend far too much to win the market, and now have to squeeze whatever value they can out by abusing their customers, their employees, and their reputations. Meanwhile, management socks away money by writing themselves checks, and original VC investment cashes out through the greater fools and co-conspirators of managed funds and the public. At best we're left with a company that goes belly-up and a destroyed industry that has to recreate itself, at worse we're left with a zombie exploitation machine of a awful company that limps on with enough reach that it still suppresses all competition in marginal markets.
- zeroonetwothree 3y ago
  This seems like more of a tech thing than a capitalism thing. Other industries don’t have this issue. Part of the problem is people are used to getting some level of tech “for free” so it’s hard to introduce something new without subsidies.
grotorea 3y ago
What I find strange is that food delivery worked for at least some foods via phone before there were apps. Shouldn't the apps make things more efficient?
- paraboli 3y ago
  Most restaurants didn't offer delivery so there was less competition and the ones that did could keep in-house drivers busy. This meant only half the trip (restaurant->customer) had to be completed after the order was made. It also meant the driver-ready-vs-food-ready problem didn't exist. The cuisines that offered delivery were also those optimized for delivery. Pizza and American Chinese travels much better than burgers and fries. Not only do they stand up better to sitting between being made and consumed but it's easier to count how many pizza boxes there are than make sure the burger also got its fries and side salad.

pessimizer 3y ago

I'm starting to think of capitalism as rule by "winner's curse" (https://en.wikipedia.org/wiki/Winner's_curse) https://en.wikipedia.org/wiki/Winner's_curse). The winners in VC-funded tech spend far too much to win the market, and now have to squeeze whatever value they can out by abusing their customers, their employees, and their reputations. Meanwhile, management socks away money by writing themselves checks, and original VC investment cashes out through the greater fools and co-conspirators of managed funds and the public. At best we're left with a company that goes belly-up and a destroyed industry that has to recreate itself, at worse we're left with a zombie exploitation machine of a awful company that limps on with enough reach that it still suppresses all competition in marginal markets.

zeroonetwothree 3y ago
This seems like more of a tech thing than a capitalism thing. Other industries don’t have this issue. Part of the problem is people are used to getting some level of tech “for free” so it’s hard to introduce something new without subsidies.

grotorea 3y ago

What I find strange is that food delivery worked for at least some foods via phone before there were apps. Shouldn't the apps make things more efficient?

paraboli 3y ago
Most restaurants didn't offer delivery so there was less competition and the ones that did could keep in-house drivers busy. This meant only half the trip (restaurant->customer) had to be completed after the order was made. It also meant the driver-ready-vs-food-ready problem didn't exist. The cuisines that offered delivery were also those optimized for delivery. Pizza and American Chinese travels much better than burgers and fries. Not only do they stand up better to sitting between being made and consumed but it's easier to count how many pizza boxes there are than make sure the burger also got its fries and side salad.