7 ms·

Why DoorDash fees are so high [pdf]

26 points by luu 2y ago

Dudhbbh3343 2y ago
I don't know what the app/driver split is, but in developing countries, the total fees are typically $1-2 for food delivery on Grab, Food Panda, Gojek, etc. If those apps can make enough from that, then there's no reason they need anywhere close to what they're charging in the US and similar countries. The app costs (ignoring what's paid to drivers) shouldn't differ much between markets.
- wincy 2y ago
  Okay but really now, how am I supposed to pay for $250,000 a year to my software engineers in San Francisco with that kind of attitude? Someone has to pay to lease those beautiful downtown SF offices!
  - nine_zeros 2y ago
    Where are those exec stock options going to come from?
  - gruez 2y ago
    Is there some sort of barrier preventing those Asian competitors from entering Western markets? If it's as simple as you make it out to be, they should be swooping in and eating the incumbents' lunch with their lower overall costs.
    - mbreese 2y ago
      First mover network effects. Also, not knowing the market. It’s hard for a company without at least a cursory local presence to get local restaurants to sign up for things. There is a significant burden on the restaurant to get onboarded for a delivery company, so there has to be a good reason to do so. But, there is definitely a margin to be had here… if you could have a lower cost delivery service that managed the white label backend like DoorDash, I’m sure you’d see companies flock to it for their in-app delivery. (Think McDonalds delivery ordered in the McD app)
    - Iulioh 2y ago
      The problem is that almost every kind of company entering markets to compete would have to spend an ungodly amount of money for advertising (you have to let people know you exist and drivers that you are offering a job) and the setup cost are high too. It is simply expensive to ENTER the market and you will have to have high prices for at least the first period but with them there is no incentive to use you. And if you give an artificially low price for your service (let say on the long term you can pay the initial fees maintaining lower prices)then the whole thing is still super risky. It can be done, there are just more safe endeavors.
    - Ekaros 2y ago
      They don't have the venture capital to burn at start... It all begins with dumping. First prices and intro offers are unsustainable... You can not start competing when other side started by burning massive piles of money.
      - gruez 2y ago
        Right, but investors were happy to fund those intro offers with the hope that they'll be rewarded in the end with market share. In fact they were funding multiple competing companies (eg. uber eats, doordash, grubhub). If the Asian competitors are fundamentally cheaper than their Western counterparts, then it'd be a non-brainer investors to invest in them instead, because over the long term they'll have a cost advantage.
- pfannkuchen 2y ago
  Are those apps profitable though? US apps like this were cheaper for awhile too while they were still lighting investor money on fire in order to gain customers quickly. I think DoorDash is out of this mode now, and there may be less investor growth money being poured in in the US at this point since it’s no longer early days and the market there has matured.
- gruez 2y ago
  > I don't know what the app/driver split is, but in developing countries, the total fees are typically $1-2 for food delivery on Grab, Food Panda, Gojek, etc. But how much are the drivers making? If labor is dirt cheap there it's not surprising at all that they can offer delivery for $1-$2. I find it strange how you went from "developing countries, the total fees are typically $1-2 for food delivery" to "there's no reason they need anywhere close to what they're charging in the US and similar countries" without at least doing a cursory analysis of the labor costs.
  - Dudhbbh3343 2y ago
    Because even if we assume the labor costs are zero in the developing countries, that means the platform is only earning a couple dollars per order. But the original article suggests that Door Dash is making over $10 an order (after labor costs), which is 5x over the best case scenario for the developing countries' apps.
    - gruez 2y ago
      > Because even if we assume the labor costs are zero in the developing countries, that means the platform is only earning a couple dollars per order. 1. That's gross profit, and doesn't cover stuff like marketing spend, which presumably is also more expensive in developed countries. If you look at the linked financial report, just under "Gross Margin" (and is cropped out) is "sales and marketing", which is nearly half of the gross margin. 2. The $10/order profit figure in the report includes restaurant fees as well. If you exclude that, their revenue (ie. all fees charged), and their profit (ie. revenue minus whatever they paid to the driver) drops by two-thirds. Taking the two factors into account the doordash premium (for lack of a better term) over the Asian delivery companies decreases significantly. If you factor other expenses (eg. customer support/admin) and/or factors (eg. whether the Asian delivery companies are currently trying to gain marketshare as opposed to trying to take profits) probably decreases the discrepancy even further.
- prepend 2y ago
  Is this kind of like US pharmaceuticals where the prices are very high in the US because they can be and that “subsidizes” the development of these apps so the fees can be cheaper in other regions.
  - secondcoming 2y ago
    Just look at worldwide prices for netflix subscriptions
  - Dudhbbh3343 2y ago
    That's quite possible. They're probably also willing to run it at a loss to prevent any competition getting a foot hold in these markets.
- TheCapeGreek 2y ago
  Out here in the developing world of South Africa, it's more like $1-2 as delivery cost, another $1-2 as the "platform fee", on top of the inflated platform menu prices (which they take a cut of) , and increasingly they insist that we tip drivers a percentage of the meal.
- djbusby 2y ago
  What's the fee as % of food cost? What's a good wage there? Need more numbers to make a comparison to USA.
  - Dudhbbh3343 2y ago
    5-10% of my typical orders. $10-15 a day is a good wage for unskilled labor there.
Eddy_Viscosity2 2y ago
TLDR: They are high because DoorDash execs want all of your sweet sweet money.
- DaveExeter 2y ago
  That is part of the answer. But the correct answer is -- they are high because there is not enough competition to force them lower.
- grotorea 2y ago
  That's too simplistic. The interesting part is this imho: > DoorDash chose not to reduce the psychological impact of added fees for customers, as they typically do — instead they announced those fees through ads and in-app pop-ups > In fact, DoorDash on average takes almost half of total fees on each order. In other words: worker pay is only about half of the total fees DoorDash collects from customers and restaurants. > The average order in the sample totaled $59.08 before taxes and tip, with an advertised food subtotal of $44.68. Of that total payment: ● $37.98 went to the restaurant after they paid restaurant fees to DoorDash for the order ● $14.40 was charged in customer fees paid to DoorDash ● $6.70 was charged in restaurant fees paid to DoorDash Of that total of $21.10 charged in restaurant and customer fees: ● $11.07 was paid to the worker
notfried 2y ago
I wonder if these food/grocery delivery apps are shooting themselves in the foot with how they balance pricing/fees vs marketing/promotional costs. You can almost always find gift cards for these services that are 10-20% off. And once you stop using these services for a short while, they bombard you with 20-40% discounts to pull you back. So it's likely the fees are too high because they need to offset the marketing spend, but then the reason why people avoid or use these services not very frequently is because of the high fees. Maybe there is a world in which spending less on marketing and lowering the fees could result in lower acquisition cost and higher retention.
- Dudhbbh3343 2y ago
  I doubt getting rid of the discounts would ultimately help. Price discrimination and the psychological allure of a discount are powerful tools. When I worked in Singapore, the whole office had an Uber Eats account and every day we could order lunch from anywhere with no consideration of any fees. There are plenty of price insensitive users like that who make it worth while to keep your base fees high. And I also know plenty of people who compulsively order things whenever there's a promotion, but would rather starve than pay "full price".
- gruez 2y ago
  Or it might just be price discrimination. The people who are just mindlessly ordering are probably not that price sensitive, so you can charge them higher, whereas the deal hunters that would actively seek out and stock up on 20% off gift cards likely weren't going to pay the inflated asking price to begin with.
- ghaff 2y ago
  Well there’s so much customer churn in part because many aren’t willing to pay for the actual cost of the service. Food delivery does work in some cases—Dominos or the Chinese place in a probably urban location. But it seems tough in general. Personal services even by fairly low-paid workers are pretty much luxuries in much of the West.
  - 5555624 2y ago
wincy 2y ago
As we all know, the true minimum wage is $0, as if a job isn’t viable and can’t make a profit it simply no longer exists. Maybe we’ll settle on deciding food delivery shouldn’t exist. I was between jobs and DoorDash was a joy to work, I’d just catch up on my reading with a nice Carl Jung audiobook while driving around. Literally the easiest job I’ve worked in my life. DoorDash is certainly expensive, although I was happy to pay $40 for some chips and ice cream the other day because I had a long day at work and wanted to be an absolute couch potato. The document details the gross profits of DoorDash, but isn’t setting up menus, coordinating with restaurants, all of this an intensely difficult, non automatable problem? There’s zero insight gained by reading this about how DoorDash spends its money. I’d assume engineers and people tweaking menus are expensive? This document doesn’t actually answer the question of “why DoorDash fees are so high” at all, as I suspect the person writing the document doesn’t know why. Maybe the answer is just “oh they’re super greedy” but I’d hazard it’s more complex than that.
- echoangle 2y ago
  Isn’t the menu managed by the restaurants themselves? I thought doordash just supplied an (automated) website where the restaurants can enter their offerings. What’s there to manage?
  - airstrike 2y ago
    I'm guessing the complexity of configurable menu items (pick any 2 of X, add Y for $Z), promotions like discounts or BOGO, scheduling those promos and making all of that easy for the restaurant manager to tweak (from my outside perspective, most restaurants are terrible at it, but maybe that's by design on their part) on the flip side, there's no intrinsic reason for apps to repeatedly tweak this part of the design. in an ideal world, designers, engineers and product managers sit down, figure it out, and ship. it's not like restaurants are continuously evolving in a meaningful way... but organizations tend to breed this sort of self-fulfilling prophecy where we need more resources to support the increasing need for resources, to paraphrase that quote
abigail95 2y ago
I see gross margin, where is the net margin? No other business is subject to this scrutiny. A food service business increasing their prices based on labor cost is well documented in the different Big Mac prices across the country. Who is out there telling McDonalds to keep their prices down because the gross margin on post mix soda is 98%?
- tempest_ 2y ago
  > Who is out there telling McDonalds to keep their prices down because the gross margin on post mix soda is 98%? McDonalds generally has "employees" in the jurisdictions they operate in and thus should be following all the local laws that come with that term. The gig economy companies have a long public history of skirting labour laws. So when they say "DoorDash has claimed that the new fees they’re charging are a necessary result of raising pay for workers" (according to this page anyway) they invite this type of analysis.
  - gruez 2y ago
    >The gig economy companies have a long public history of skirting labour laws. >So when they say "DoorDash has claimed that the new fees they’re charging are a necessary result of raising pay for workers" (according to this page anyway) they invite this type of analysis. The two paragraphs don't follow each other. Are you saying mcdonalds gets a free pass on price increases (on which they at least partially blame on rising wages), because they have employees rather than contractors? Why should be this the case? As the consumer, shouldn't I be equally angry if mcdonalds is jacking up prices to pump their profits under the guise of "higher labor costs"? Sure, there's plenty of reasons to hate on companies using gig labor, but hating on them for price increases specifically seems closer to bitch eating cracker syndrome[1] than any sort of rational analysis. [1] https://en.wiktionary.org/wiki/bitch_eating_crackers https://en.wiktionary.org/wiki/bitch_eating_crackers
    - danaris 2y ago
      Not to put words in their mouth, but I read that as basically "when DoorDash says they need to raise prices to pay their workers, I don't believe a word of it." They have a history of breaking laws, being hostile to labor, and doing whatever they can to maximize profits at everyone else's expense. Why would they balk at lying about the reasons for increasing prices?
ericmay 2y ago
DoorDash, GrubHub, Uber Eats, they’re taking blame almost like they’re Ticketmaster or something. McDonald’s jacks up their prices, then they charge even more via food delivery, and then both DoorDash and McDonald’s make more money and we’re just focused on DoorDash. I think the “driver” aspect of it and wages there are probably a big part of the visceral reaction people continue to have. Though I personally don’t get it. Nobody was filing lawsuits on behalf of pizza delivery kids. Truth be told outside of Uber (questionable) I don’t think any of them are good investment opportunities. Neither was Blue Apron. Also just stop ordering takeout from subpar restaurants or food chains. Go out to eat with friends or cook at home. High prices for mediocre convenience services isn’t worth it. Corporate GrubHub isn’t going to take a pay cut and they don’t run a non-profit. If Seattle wants to create legislation like they did here there is no sense in being surprised that prices have gone up.
- ipython 2y ago
  The cuts Uber, DoorDash etc take are astronomical- that’s the real issue. Thirty percent! Nobody filed lawsuits about pizza delivery in the past because you didn’t pay a 100% premium for delivery! I don’t do delivery services because for a family it is entirely unreasonable. I looked once- a $40 fast food order would be nearly $90 after inflated menu prices, fees, delivery, and tip.
  - bradleyjg 2y ago
    It’s a very optional luxury. People getting mad about the price of milk is entirely different than people getting mad about the price of Rolexes.
    - MOARDONGZPLZ 2y ago
      You’re equating having a meal delivered to luxury watches like Rolexes?
      - ericmay 2y ago
        In terms of optionality they’re pretty similar. “Getting food delivered” isn’t a right or basic necessity. It’s just an expensive convenience.
d_e_solomon 2y ago
This analysis is pretty weak. DoorDash is running a net loss overall - gross margin isn't covering their fixed costs - especially marketing to obtain customers. In their most recent 10-K https://www.sec.gov/ix?doc=/Archives/edgar/data/1792789/000162828024005600/dash-20231231.htm https://www.sec.gov/ix?doc=/Archives/edgar/data/1792789/0001..., they have a non-gaap measure contribution profit per order which is -0.8%. So yeah, it's not surprising that they're trying to increase fees.
Giorgi 2y ago
"they chose not to accept slightly smaller margins in response to the requirement to pay workers minimum wage" Oh, what a surprise, so communism do not work in real life and Government is not your friend? Shocker.
fapjacks 2y ago
I interviewed at DoorDash way back when, could've been about employee #12 or something. But when I sat down to interview with a couple of the cofounders, it seemed to me they were some kind of sociopaths. I have no regrets whatsoever not calling them back. All of my friends that work in the service industry (at the actual restaurants, not delivery drivers) absolutely despise DoorDash. I refuse to use it.

26 points by luu 2y ago

I don't know what the app/driver split is, but in developing countries, the total fees are typically $1-2 for food delivery on Grab, Food Panda, Gojek, etc. If those apps can make enough from that, then there's no reason they need anywhere close to what they're charging in the US and similar countries. The app costs (ignoring what's paid to drivers) shouldn't differ much between markets.

wincy 2y ago
Okay but really now, how am I supposed to pay for $250,000 a year to my software engineers in San Francisco with that kind of attitude? Someone has to pay to lease those beautiful downtown SF offices!
- nine_zeros 2y ago
  Where are those exec stock options going to come from?
- gruez 2y ago
  Is there some sort of barrier preventing those Asian competitors from entering Western markets? If it's as simple as you make it out to be, they should be swooping in and eating the incumbents' lunch with their lower overall costs.
  - mbreese 2y ago
    First mover network effects. Also, not knowing the market. It’s hard for a company without at least a cursory local presence to get local restaurants to sign up for things. There is a significant burden on the restaurant to get onboarded for a delivery company, so there has to be a good reason to do so. But, there is definitely a margin to be had here… if you could have a lower cost delivery service that managed the white label backend like DoorDash, I’m sure you’d see companies flock to it for their in-app delivery. (Think McDonalds delivery ordered in the McD app)
  - Iulioh 2y ago
    The problem is that almost every kind of company entering markets to compete would have to spend an ungodly amount of money for advertising (you have to let people know you exist and drivers that you are offering a job) and the setup cost are high too. It is simply expensive to ENTER the market and you will have to have high prices for at least the first period but with them there is no incentive to use you. And if you give an artificially low price for your service (let say on the long term you can pay the initial fees maintaining lower prices)then the whole thing is still super risky. It can be done, there are just more safe endeavors.
  - Ekaros 2y ago
    They don't have the venture capital to burn at start... It all begins with dumping. First prices and intro offers are unsustainable... You can not start competing when other side started by burning massive piles of money.
    - gruez 2y ago
      Right, but investors were happy to fund those intro offers with the hope that they'll be rewarded in the end with market share. In fact they were funding multiple competing companies (eg. uber eats, doordash, grubhub). If the Asian competitors are fundamentally cheaper than their Western counterparts, then it'd be a non-brainer investors to invest in them instead, because over the long term they'll have a cost advantage.
pfannkuchen 2y ago
Are those apps profitable though? US apps like this were cheaper for awhile too while they were still lighting investor money on fire in order to gain customers quickly. I think DoorDash is out of this mode now, and there may be less investor growth money being poured in in the US at this point since it’s no longer early days and the market there has matured.
gruez 2y ago
> I don't know what the app/driver split is, but in developing countries, the total fees are typically $1-2 for food delivery on Grab, Food Panda, Gojek, etc. But how much are the drivers making? If labor is dirt cheap there it's not surprising at all that they can offer delivery for $1-$2. I find it strange how you went from "developing countries, the total fees are typically $1-2 for food delivery" to "there's no reason they need anywhere close to what they're charging in the US and similar countries" without at least doing a cursory analysis of the labor costs.
- Dudhbbh3343 2y ago
  Because even if we assume the labor costs are zero in the developing countries, that means the platform is only earning a couple dollars per order. But the original article suggests that Door Dash is making over $10 an order (after labor costs), which is 5x over the best case scenario for the developing countries' apps.
  - gruez 2y ago
    > Because even if we assume the labor costs are zero in the developing countries, that means the platform is only earning a couple dollars per order. 1. That's gross profit, and doesn't cover stuff like marketing spend, which presumably is also more expensive in developed countries. If you look at the linked financial report, just under "Gross Margin" (and is cropped out) is "sales and marketing", which is nearly half of the gross margin. 2. The $10/order profit figure in the report includes restaurant fees as well. If you exclude that, their revenue (ie. all fees charged), and their profit (ie. revenue minus whatever they paid to the driver) drops by two-thirds. Taking the two factors into account the doordash premium (for lack of a better term) over the Asian delivery companies decreases significantly. If you factor other expenses (eg. customer support/admin) and/or factors (eg. whether the Asian delivery companies are currently trying to gain marketshare as opposed to trying to take profits) probably decreases the discrepancy even further.
prepend 2y ago
Is this kind of like US pharmaceuticals where the prices are very high in the US because they can be and that “subsidizes” the development of these apps so the fees can be cheaper in other regions.
- secondcoming 2y ago
  Just look at worldwide prices for netflix subscriptions
- Dudhbbh3343 2y ago
  That's quite possible. They're probably also willing to run it at a loss to prevent any competition getting a foot hold in these markets.
TheCapeGreek 2y ago
Out here in the developing world of South Africa, it's more like $1-2 as delivery cost, another $1-2 as the "platform fee", on top of the inflated platform menu prices (which they take a cut of) , and increasingly they insist that we tip drivers a percentage of the meal.
djbusby 2y ago
What's the fee as % of food cost? What's a good wage there? Need more numbers to make a comparison to USA.
- Dudhbbh3343 2y ago
  5-10% of my typical orders. $10-15 a day is a good wage for unskilled labor there.

Eddy_Viscosity2 2y ago

TLDR: They are high because DoorDash execs want all of your sweet sweet money.

DaveExeter 2y ago
That is part of the answer. But the correct answer is -- they are high because there is not enough competition to force them lower.
grotorea 2y ago
That's too simplistic. The interesting part is this imho: > DoorDash chose not to reduce the psychological impact of added fees for customers, as they typically do — instead they announced those fees through ads and in-app pop-ups > In fact, DoorDash on average takes almost half of total fees on each order. In other words: worker pay is only about half of the total fees DoorDash collects from customers and restaurants. > The average order in the sample totaled $59.08 before taxes and tip, with an advertised food subtotal of $44.68. Of that total payment: ● $37.98 went to the restaurant after they paid restaurant fees to DoorDash for the order ● $14.40 was charged in customer fees paid to DoorDash ● $6.70 was charged in restaurant fees paid to DoorDash Of that total of $21.10 charged in restaurant and customer fees: ● $11.07 was paid to the worker

notfried 2y ago

I wonder if these food/grocery delivery apps are shooting themselves in the foot with how they balance pricing/fees vs marketing/promotional costs. You can almost always find gift cards for these services that are 10-20% off. And once you stop using these services for a short while, they bombard you with 20-40% discounts to pull you back. So it's likely the fees are too high because they need to offset the marketing spend, but then the reason why people avoid or use these services not very frequently is because of the high fees. Maybe there is a world in which spending less on marketing and lowering the fees could result in lower acquisition cost and higher retention.

Dudhbbh3343 2y ago
I doubt getting rid of the discounts would ultimately help. Price discrimination and the psychological allure of a discount are powerful tools. When I worked in Singapore, the whole office had an Uber Eats account and every day we could order lunch from anywhere with no consideration of any fees. There are plenty of price insensitive users like that who make it worth while to keep your base fees high. And I also know plenty of people who compulsively order things whenever there's a promotion, but would rather starve than pay "full price".
gruez 2y ago
Or it might just be price discrimination. The people who are just mindlessly ordering are probably not that price sensitive, so you can charge them higher, whereas the deal hunters that would actively seek out and stock up on 20% off gift cards likely weren't going to pay the inflated asking price to begin with.
ghaff 2y ago
Well there’s so much customer churn in part because many aren’t willing to pay for the actual cost of the service. Food delivery does work in some cases—Dominos or the Chinese place in a probably urban location. But it seems tough in general. Personal services even by fairly low-paid workers are pretty much luxuries in much of the West.
- 5555624 2y ago

wincy 2y ago

As we all know, the true minimum wage is $0, as if a job isn’t viable and can’t make a profit it simply no longer exists. Maybe we’ll settle on deciding food delivery shouldn’t exist. I was between jobs and DoorDash was a joy to work, I’d just catch up on my reading with a nice Carl Jung audiobook while driving around. Literally the easiest job I’ve worked in my life. DoorDash is certainly expensive, although I was happy to pay $40 for some chips and ice cream the other day because I had a long day at work and wanted to be an absolute couch potato. The document details the gross profits of DoorDash, but isn’t setting up menus, coordinating with restaurants, all of this an intensely difficult, non automatable problem? There’s zero insight gained by reading this about how DoorDash spends its money. I’d assume engineers and people tweaking menus are expensive? This document doesn’t actually answer the question of “why DoorDash fees are so high” at all, as I suspect the person writing the document doesn’t know why. Maybe the answer is just “oh they’re super greedy” but I’d hazard it’s more complex than that.

echoangle 2y ago
Isn’t the menu managed by the restaurants themselves? I thought doordash just supplied an (automated) website where the restaurants can enter their offerings. What’s there to manage?
- airstrike 2y ago
  I'm guessing the complexity of configurable menu items (pick any 2 of X, add Y for $Z), promotions like discounts or BOGO, scheduling those promos and making all of that easy for the restaurant manager to tweak (from my outside perspective, most restaurants are terrible at it, but maybe that's by design on their part) on the flip side, there's no intrinsic reason for apps to repeatedly tweak this part of the design. in an ideal world, designers, engineers and product managers sit down, figure it out, and ship. it's not like restaurants are continuously evolving in a meaningful way... but organizations tend to breed this sort of self-fulfilling prophecy where we need more resources to support the increasing need for resources, to paraphrase that quote

abigail95 2y ago

I see gross margin, where is the net margin? No other business is subject to this scrutiny. A food service business increasing their prices based on labor cost is well documented in the different Big Mac prices across the country. Who is out there telling McDonalds to keep their prices down because the gross margin on post mix soda is 98%?

tempest_ 2y ago
> Who is out there telling McDonalds to keep their prices down because the gross margin on post mix soda is 98%? McDonalds generally has "employees" in the jurisdictions they operate in and thus should be following all the local laws that come with that term. The gig economy companies have a long public history of skirting labour laws. So when they say "DoorDash has claimed that the new fees they’re charging are a necessary result of raising pay for workers" (according to this page anyway) they invite this type of analysis.
- gruez 2y ago
  >The gig economy companies have a long public history of skirting labour laws. >So when they say "DoorDash has claimed that the new fees they’re charging are a necessary result of raising pay for workers" (according to this page anyway) they invite this type of analysis. The two paragraphs don't follow each other. Are you saying mcdonalds gets a free pass on price increases (on which they at least partially blame on rising wages), because they have employees rather than contractors? Why should be this the case? As the consumer, shouldn't I be equally angry if mcdonalds is jacking up prices to pump their profits under the guise of "higher labor costs"? Sure, there's plenty of reasons to hate on companies using gig labor, but hating on them for price increases specifically seems closer to bitch eating cracker syndrome[1] than any sort of rational analysis. [1] https://en.wiktionary.org/wiki/bitch_eating_crackers https://en.wiktionary.org/wiki/bitch_eating_crackers
  - danaris 2y ago
    Not to put words in their mouth, but I read that as basically "when DoorDash says they need to raise prices to pay their workers, I don't believe a word of it." They have a history of breaking laws, being hostile to labor, and doing whatever they can to maximize profits at everyone else's expense. Why would they balk at lying about the reasons for increasing prices?

ericmay 2y ago

DoorDash, GrubHub, Uber Eats, they’re taking blame almost like they’re Ticketmaster or something. McDonald’s jacks up their prices, then they charge even more via food delivery, and then both DoorDash and McDonald’s make more money and we’re just focused on DoorDash. I think the “driver” aspect of it and wages there are probably a big part of the visceral reaction people continue to have. Though I personally don’t get it. Nobody was filing lawsuits on behalf of pizza delivery kids. Truth be told outside of Uber (questionable) I don’t think any of them are good investment opportunities. Neither was Blue Apron. Also just stop ordering takeout from subpar restaurants or food chains. Go out to eat with friends or cook at home. High prices for mediocre convenience services isn’t worth it. Corporate GrubHub isn’t going to take a pay cut and they don’t run a non-profit. If Seattle wants to create legislation like they did here there is no sense in being surprised that prices have gone up.

ipython 2y ago
The cuts Uber, DoorDash etc take are astronomical- that’s the real issue. Thirty percent! Nobody filed lawsuits about pizza delivery in the past because you didn’t pay a 100% premium for delivery! I don’t do delivery services because for a family it is entirely unreasonable. I looked once- a $40 fast food order would be nearly $90 after inflated menu prices, fees, delivery, and tip.
- bradleyjg 2y ago
  It’s a very optional luxury. People getting mad about the price of milk is entirely different than people getting mad about the price of Rolexes.
  - MOARDONGZPLZ 2y ago
    You’re equating having a meal delivered to luxury watches like Rolexes?
    - ericmay 2y ago
      In terms of optionality they’re pretty similar. “Getting food delivered” isn’t a right or basic necessity. It’s just an expensive convenience.

d_e_solomon 2y ago

This analysis is pretty weak. DoorDash is running a net loss overall - gross margin isn't covering their fixed costs - especially marketing to obtain customers. In their most recent 10-K https://www.sec.gov/ix?doc=/Archives/edgar/data/1792789/000162828024005600/dash-20231231.htm https://www.sec.gov/ix?doc=/Archives/edgar/data/1792789/0001..., they have a non-gaap measure contribution profit per order which is -0.8%. So yeah, it's not surprising that they're trying to increase fees.

Giorgi 2y ago

"they chose not to accept slightly smaller margins in response to the requirement to pay workers minimum wage" Oh, what a surprise, so communism do not work in real life and Government is not your friend? Shocker.

fapjacks 2y ago

I interviewed at DoorDash way back when, could've been about employee #12 or something. But when I sat down to interview with a couple of the cofounders, it seemed to me they were some kind of sociopaths. I have no regrets whatsoever not calling them back. All of my friends that work in the service industry (at the actual restaurants, not delivery drivers) absolutely despise DoorDash. I refuse to use it.