5 ms·

I think the truth is restaurant food delivery is a luxgury good, literally “private taxi for your burrito” yet many people spend like it isnt.

to11mtm 1y ago
Restaurant delivery... I tend to agree. 'nonperishable food' or 'properly packed short travel' (i.e. dairy/frozen) IMO is a fairer niche of 'could be non-luxury with better societal outcomes', except for the 'as close to JIT as possible'. There's ways to optimize the process to where something on the scale of 10-20 homes could get their main groceries delivered two or 3 times a week and the overall cost would be lower than all of them doing so. Yeah you'd need a reefer van or an otherwise replenishable source of cold for dairy/frozen but at that scale the cost of such makes a lot more sense. Biggest problem is getting the right buy-in and mindset from consumers.
- watwut 1y ago
  Difference is you can stock large quantity of frozen foods any time it is convenient to shop. As in, frozen food delivery is not all that useful. When you work from home and cant cook, delivery can happen right now. Or if you are having a small gathering with friends, delivery makes your life easier exactly when you need it.
- mtrovo 1y ago
  I totally agree in theory, in the same way I agree that Amazon delivering everything from a nearby warehouse is far more optimal than having thousands of small bookshops or random shops in prime locations. I think that's the main vision behind Travis Kalanick's CloudKitchens since he left Uber. You could order food prep for your week from a choice of menus, and the food would be prepared in an industrial kitchen for you and thousands of other people around you. It's basically restaurant-quality food that you can eat at home and isn't frozen. Unfortunately for the meal prep market, I believe the break-even point for scale is much more difficult to achieve. Food is like hardware but with a much shorter end-of-life. You would need consistency in ordering to avoid excess spoilage and to operate at scale within small geographical pockets to make the delivery worthwhile. I really believe this could work with the right demographics and in the right geography, it's just much harder than simply delivering takeaways.
  - to11mtm 1y ago
    FWIW There's a local regional chain that does in fact operate in a way similar to what you describe with CloudKitchens. The main difference is that in practice, you go to the store and pick up meals for the next 2-3 days (I'm fine with this FWIW) and then you select meals (this is where it fell apart, often the 'good stuff' that I could eat with my diet wasn't available). The overall quality after microwaving per instructions was 'like you got a local restaurant dish but it tasted better than if you reheated that'. Ironically, I actually appreciated it overall, and if nothing else it was really good portion control for myself and my partner. They were healthy meals with a proper portion for a normal adult, and frankly comparing said portion vs cost to 'leftovers' from a restaurant I think it was a... not bad value prop. Our only problem was the aforementioned 'not having the stuff that was gluten free and not overly bland in stock enough'. I think the other problem is the sort of wool over everyone's eyes, where at-home meal prep for the week can be extremely simple so long as you've got a good process to follow and are willing to make various compromises.
Aurornis 1y ago
Seeing how many Gen Z people use food delivery services on a weekly or even daily basis was mind blowing to me. I’ve had numerous conversations where I’ve had to bite my tongue when younger colleagues complained about finances after also explaining that they DoorDash dinner nearly every night. It’s bizarre. Not all Gen Z, of course. Most of the younger people I’ve worked with have been generally smart about finances. It’s a subset who fall into the normalization of luxury services as a standard cost.
- hn_throwaway_99 1y ago
  Even the subtitle of this article basically enforces that fact: > Why is my $8 burger $23 after fees - An average reddit user As you say, it's a private taxi for your burrito. When you factor in the labor costs, gas/car maint costs, and the amortized cost of providing the service, it's hard to see why anyone would think $15 for an on-demand delivery in a major urban area is abnormal.
  - kgdiem 1y ago
    Here’s something WiLd and crazy — “in town” or “in range” delivery used to be free in major urban areas, and you’d tip the delivery driver $2-5.
    - lysace 1y ago
      We had a variant of that for pizza in Sweden around 2000-2010: Free delivery from an online order and no tips expected. Literally the same price for the pizza for in store take away or home delivery. Always wondered if that was tax or immigration fraud (pay-to-work schemes). Or both.
      - nickff 1y ago
        Most pizza restaurants are built around the delivery cost-structure. They locate off main streets, they have a small front-of-house relative to kitchen size, and they have relatively low ingredients costs. They save money on both real estate and taxes, and use those savings to pay for drivers who deliver multiple orders per trip. Other restaurants just aren’t optimized for the delivery business, so it’s more expensive per serving for the customer (no matter who is doing the delivery).
coffeebeqn 1y ago
It wasn’t priced in for the first 5-10 years. There’s no way I would use an app like that (I even work for one) these days now that the VC subsidy is gone and the service costs 5x as much as a few years ago
pico303 1y ago
I thought the headline was implying something else. When I read the article, I thought, “Is it a monopoly to worry about if you can just do it yourself?” Feels like complaining there is a monopoly on services to pour you a glass of water from the tap.
bko 1y ago
It didn't used to be. I delivered pizza in the early 2000s, and the fee was $1 and tip, which was usually $2-3. It was pretty normal people ordering the stuff. And the funny thing is I made about $20 an hour (unadjusted for inflation, ~4 deliveries per hour + $5 an hour). Today the drivers still around that amount, the restaurants pay more and the companies operating are often operating at a loss. Something very strange happened in the last 20 years.
- fy20 1y ago
  Not really hard to understand when a VC backed company needs to show returns to their investors. Restaurants get less than 50% of the order total. The only parties winning from this shift are the delivery companies.
- quasse 1y ago
  > Something very strange happened in the last 20 years. Tech companies discovered that the most profitable position to be in was global middleman, at a scale previously impossible before everything was connected by the internet. They undercut a given market until all the alternatives become financially non-viable and then start hoovering up all the margins from both sides (producer and consumer) of the deal.
- KoftaBob 1y ago
  What happened is the gig economy inserted a middleman (DoorDash, Uber Eats, etc.) between the restaurant and customer. These platforms take a 20–30% cut, charge customer fees, and still often lose money. Meanwhile, drivers—now independent contractors—get no hourly wage, no benefits, and absorb all costs (gas, car, downtime). Tech didn’t increase efficiency for workers—it added a VC-funded layer that extracts value. So despite more demand and better tools, drivers earn the same (or less) in nominal terms, and much less after inflation.
- BiteCode_dev 1y ago
  They removed friction by centralizing all restaurants so you can choose from one place, standardizing the experience no matter the food source, making selection simple and payment/refund easy. The human brain is wired to go the way of the least resistance short term, no matter the cost long term, so customers pay a lot for that. I have many pizza places that tell me they still deliver themselves for cheaper: almost nobody takes the option, they use the giant company app.
nikolayasdf123 1y ago
no it is not. meituan in china is very very cheap.
- bdcravens 1y ago
  Is it customary to tip the delivery person? This always increases the actual cost.
msgodel 1y ago
Also if it's really an issue for restaurants they can do delivery the way pizza/Chinese restaurants used to do without having to deal with any third parties. Of all the things to worry about this is probably the least important.
- bdcravens 1y ago
  It's a bigger issue for consumers who are willing to pay $39 for a $24 dinner.
UltraSane 1y ago
I make good IT money with few expenses and thus have a lot of disposable income but I feel that restaurants are really terrible value for money and thus rarely go to them. Add the extra cost of getting restaurant food delivered right to your house and it just becomes a stupid waste of money.

to11mtm 1y ago

Restaurant delivery... I tend to agree. 'nonperishable food' or 'properly packed short travel' (i.e. dairy/frozen) IMO is a fairer niche of 'could be non-luxury with better societal outcomes', except for the 'as close to JIT as possible'. There's ways to optimize the process to where something on the scale of 10-20 homes could get their main groceries delivered two or 3 times a week and the overall cost would be lower than all of them doing so. Yeah you'd need a reefer van or an otherwise replenishable source of cold for dairy/frozen but at that scale the cost of such makes a lot more sense. Biggest problem is getting the right buy-in and mindset from consumers.

watwut 1y ago
Difference is you can stock large quantity of frozen foods any time it is convenient to shop. As in, frozen food delivery is not all that useful. When you work from home and cant cook, delivery can happen right now. Or if you are having a small gathering with friends, delivery makes your life easier exactly when you need it.
mtrovo 1y ago
I totally agree in theory, in the same way I agree that Amazon delivering everything from a nearby warehouse is far more optimal than having thousands of small bookshops or random shops in prime locations. I think that's the main vision behind Travis Kalanick's CloudKitchens since he left Uber. You could order food prep for your week from a choice of menus, and the food would be prepared in an industrial kitchen for you and thousands of other people around you. It's basically restaurant-quality food that you can eat at home and isn't frozen. Unfortunately for the meal prep market, I believe the break-even point for scale is much more difficult to achieve. Food is like hardware but with a much shorter end-of-life. You would need consistency in ordering to avoid excess spoilage and to operate at scale within small geographical pockets to make the delivery worthwhile. I really believe this could work with the right demographics and in the right geography, it's just much harder than simply delivering takeaways.
- to11mtm 1y ago
  FWIW There's a local regional chain that does in fact operate in a way similar to what you describe with CloudKitchens. The main difference is that in practice, you go to the store and pick up meals for the next 2-3 days (I'm fine with this FWIW) and then you select meals (this is where it fell apart, often the 'good stuff' that I could eat with my diet wasn't available). The overall quality after microwaving per instructions was 'like you got a local restaurant dish but it tasted better than if you reheated that'. Ironically, I actually appreciated it overall, and if nothing else it was really good portion control for myself and my partner. They were healthy meals with a proper portion for a normal adult, and frankly comparing said portion vs cost to 'leftovers' from a restaurant I think it was a... not bad value prop. Our only problem was the aforementioned 'not having the stuff that was gluten free and not overly bland in stock enough'. I think the other problem is the sort of wool over everyone's eyes, where at-home meal prep for the week can be extremely simple so long as you've got a good process to follow and are willing to make various compromises.

Aurornis 1y ago

Seeing how many Gen Z people use food delivery services on a weekly or even daily basis was mind blowing to me. I’ve had numerous conversations where I’ve had to bite my tongue when younger colleagues complained about finances after also explaining that they DoorDash dinner nearly every night. It’s bizarre. Not all Gen Z, of course. Most of the younger people I’ve worked with have been generally smart about finances. It’s a subset who fall into the normalization of luxury services as a standard cost.

hn_throwaway_99 1y ago
Even the subtitle of this article basically enforces that fact: > Why is my $8 burger $23 after fees - An average reddit user As you say, it's a private taxi for your burrito. When you factor in the labor costs, gas/car maint costs, and the amortized cost of providing the service, it's hard to see why anyone would think $15 for an on-demand delivery in a major urban area is abnormal.
- kgdiem 1y ago
  Here’s something WiLd and crazy — “in town” or “in range” delivery used to be free in major urban areas, and you’d tip the delivery driver $2-5.
  - lysace 1y ago
    We had a variant of that for pizza in Sweden around 2000-2010: Free delivery from an online order and no tips expected. Literally the same price for the pizza for in store take away or home delivery. Always wondered if that was tax or immigration fraud (pay-to-work schemes). Or both.
    - nickff 1y ago
      Most pizza restaurants are built around the delivery cost-structure. They locate off main streets, they have a small front-of-house relative to kitchen size, and they have relatively low ingredients costs. They save money on both real estate and taxes, and use those savings to pay for drivers who deliver multiple orders per trip. Other restaurants just aren’t optimized for the delivery business, so it’s more expensive per serving for the customer (no matter who is doing the delivery).

coffeebeqn 1y ago

It wasn’t priced in for the first 5-10 years. There’s no way I would use an app like that (I even work for one) these days now that the VC subsidy is gone and the service costs 5x as much as a few years ago

pico303 1y ago

I thought the headline was implying something else. When I read the article, I thought, “Is it a monopoly to worry about if you can just do it yourself?” Feels like complaining there is a monopoly on services to pour you a glass of water from the tap.

bko 1y ago

It didn't used to be. I delivered pizza in the early 2000s, and the fee was $1 and tip, which was usually $2-3. It was pretty normal people ordering the stuff. And the funny thing is I made about $20 an hour (unadjusted for inflation, ~4 deliveries per hour + $5 an hour). Today the drivers still around that amount, the restaurants pay more and the companies operating are often operating at a loss. Something very strange happened in the last 20 years.

fy20 1y ago
Not really hard to understand when a VC backed company needs to show returns to their investors. Restaurants get less than 50% of the order total. The only parties winning from this shift are the delivery companies.
quasse 1y ago
> Something very strange happened in the last 20 years. Tech companies discovered that the most profitable position to be in was global middleman, at a scale previously impossible before everything was connected by the internet. They undercut a given market until all the alternatives become financially non-viable and then start hoovering up all the margins from both sides (producer and consumer) of the deal.
KoftaBob 1y ago
What happened is the gig economy inserted a middleman (DoorDash, Uber Eats, etc.) between the restaurant and customer. These platforms take a 20–30% cut, charge customer fees, and still often lose money. Meanwhile, drivers—now independent contractors—get no hourly wage, no benefits, and absorb all costs (gas, car, downtime). Tech didn’t increase efficiency for workers—it added a VC-funded layer that extracts value. So despite more demand and better tools, drivers earn the same (or less) in nominal terms, and much less after inflation.
BiteCode_dev 1y ago
They removed friction by centralizing all restaurants so you can choose from one place, standardizing the experience no matter the food source, making selection simple and payment/refund easy. The human brain is wired to go the way of the least resistance short term, no matter the cost long term, so customers pay a lot for that. I have many pizza places that tell me they still deliver themselves for cheaper: almost nobody takes the option, they use the giant company app.

nikolayasdf123 1y ago

no it is not. meituan in china is very very cheap.

bdcravens 1y ago
Is it customary to tip the delivery person? This always increases the actual cost.

msgodel 1y ago

Also if it's really an issue for restaurants they can do delivery the way pizza/Chinese restaurants used to do without having to deal with any third parties. Of all the things to worry about this is probably the least important.

bdcravens 1y ago
It's a bigger issue for consumers who are willing to pay $39 for a $24 dinner.

UltraSane 1y ago

I make good IT money with few expenses and thus have a lot of disposable income but I feel that restaurants are really terrible value for money and thus rarely go to them. Add the extra cost of getting restaurant food delivered right to your house and it just becomes a stupid waste of money.