I created a DD account but never placed an order. Quite some time later, they emailed to try to convince me to place my first order — with a $35-off coupon (min $30 order).
I ordered $41 of food and was stuck with a $22 bill (including a $5 tip I added). Delivery was "free" for this order.
This taught me a valuable lesson: if DD sends you a coupon for less than $20, it is worth zero. If it's between $20 and $35, it is worth about 10 bucks (especially when you consider how they inflate prices for dishes).
I had identical experience but with Uber Eats.
I was given 18 GBP coupon off any orders over 20 GBP.
So I ended up buying a breakfast delivery from McDonalds for the family, I added the food and the coupon to the order...
The first time I tried the payment my card failed. No idea why... it just said Authorization Failed. Second time round, it went through.
Driver came, and I also left a tip.
About a week later I was doing my household budget and looked at the charge on my account, and it excluded the discount. Once you added in delivery, service charge and the tip, I ended up paying 30%+ more for the food (and didn't have my coupon).
I think this was a genuine dark pattern that they use, although I have no interest in putting it to the test. After a failed payment, they auto remove any applied coupons to your transaction....
If you get an Uber credit in the future, you can use it to buy takeout instead of delivery. Of course there is no delivery fee or tip involved for takeout. My credit card gives me a monthly $15 uber credit, and I always use it to get takeout bun from a restaurant down the street.
Aside from fees, there's tax, tip, and DD charges more per menu item than the restaurant does. Markup is about $2 for fast food item and $5 for more expensive places. One place I like to buy food from, our order costs $35 for pick up. DD cost is almost $52 not including tip.
I have no idea how DD continues to lose money with this business model.
> I have no idea how DD continues to lose money with this business model.
Many years ago when I was living in Rochester, NY as a student there was a service called “Rochester Delivers” which was essentially DoorDash without internet. They printed a big book compiling all the restaurant menus and you ordered over the phone. The price adder was always too much for a poor student like me, but I figured they probably were raking it in from the slightly richer folks.
Fast forward many years, and I mention to one of my good friends this pre-DoorDash service. Turns out he was actually the one running it. I knew he’d lived in Rochester around the same time I had, but hadn’t known him back then and had no idea. He said the entire thing was a disaster, impossible to make money, and it basically drained all his savings trying to keep it afloat.
Restaurants have no margin to begin with. In the before times, delivery guys made bank on tips and the food sold at retail.
Now you have big VC companies bleeding money while stealing the tips and dumping more costs on the consumer, which further hurts the restaurant. It’s a gross business.
Navigating the real world is inefficient and slow. I’m amazed any delivery business except maybe pizza makes sense. Without lucky closely spaces orders you are paying an entire individual worker’s salary and gas for what can easily be a 20-30 min round trip.
DD has to pay drivers, stick to regulations, fight lawsuits and pay their employees and pay for the usual marketing and growth as well. Based on the slim profits they make, it's no wonder they still burn VC cash.
With Doordash and co the fees over the normal cost of food are so high that even vs traditional delivery fees you're overpaying.
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Off the top of my head, yesterday I passed a billboard for McDonalds advertising two large sandwiches for $6.
Lets open Uber Eats and try ordering two Big Macs... $13.68
So they don't carry the deals. Not looking good already.
Went to checkout...
$1.49 delivery fee for a place 6 minutes away. Fair enough.
$3.27 service fee. The explanation text is implying the cost of servicing my order (orchestration essentially) is more than double the cost of delivery.
$2.00 CA Driver Benefits fee. Delivery drivers were always employees of independent stores, but Uber took such offense to being forced to provide healthcare that they itemize the cost.
Grand total comes out to $20 before tax. For a $6 meal in store.
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And in case you were thinking "Well Uber isn't DoorDash" this whole time... DoorDash comes out to $22 before tax.
Has a "traditional" delivery place ever charged you a 60% delivery fee?
It's so absurd I even tried increasing the order size... the ratio of price of fees to price of food actually went up!
I do attribute some value to the delivery. But this was a promo code plus free delivery. A future promo code that doesn't have free delivery would result in even higher fees. So if it's a code for less than $20 I'd expect that entire amount would be eaten up by fees and the increased cost of menu items. Delivery would be extra.
I won a $100 gift card for grubhub. Awesome! That is about 4 meals for my wife and I based on what we usually order. Uh... after all the fees and everything it came out to about 1.5 meals. Even if I include my time and gas to drive and pick up my order myself, I can't see why anyone would ever spend their own money to use grubhub unless you don't have transportation. In that case, it seems to just be a scam to take money from poor people.
Same here. They sent me a 50% off coupon a while ago. Once I had completed an order the price with all fees was basically still double the in-restaurant price despite 50% off.
My friend did the math and found that her Costco orders were 40% more expensive with IC. It does save her the time of going to the store, which is not trivial (especially with two kids), but 40% is one hell of a markup!
If they were upfront about high delivery fees that would be one thing, but what is infuriating is the way prices differ across the reataurant website and various apps that try to sneak in an extra $2-3 per item. I used to use Seamless regularly but have found Uber to be among the slimiest kind of algorithmic price discriminators.
I considered it. But most of the fees didn’t disappear when I selected that option. I’d have saved the $5 tip, but the hidden fees would have remained. I figured if I’m paying for delivery related fees either way, I might as well get it delivered.
I started boycotting food delivery services because the quality & service was just god awful. I found that if I drive, I actually don't spend that much time, and I get wayyyy better service.
You also pay way less. DoorDash and all the others don't just charge the fees and the tips and what not, they also inflate the food cost by a pretty hefty amount. A simple example:
McDonalds has a 2 for $2 deal on sausage mcmuffins & hashbrowns - been around forever. Let's say you and the wife want a McMuffin & a hashbrown each - you're in for $4 dollars and a bit of change for tax.
Here is the same meal via DoorDash:
McMuffins: $2.87ea
Hash browns: $1.91ea
Subtotal: $9.56 (just below the 10 dollar minimum to wave the fee if you have DD+)
Delivery fee: $1.99
Service fee: $3.00
Tax: $0.91
Dasher Tip: $5 (good luck getting your order on time if you tip less than this)
Grand Total: $20.46 for $4 of food.
You can "optimize" by ordering an additional hash brown to get over the $10 hump so you can wave the delivery fee and reduce the service fee - which will instead cost you a total of $17.91 for $5 worth of food. Either way it's a shit deal. Not included here are the costs associated with 1 in every 4-5 orders being incorrect, or delivered to the wrong house and the hassle that adds to your life.
Obviously I went with low cost items to illustrate a point but often any food prices you see on DD are a good 50% markup vs going in person regardless of the restaurant before you even get into fees and tips.
This to me is what killed delivery as a service. It doesn’t work even when they are charging what works out to be double the salary the restaurant pays its own delivery people. And it works out for no one, restaurant, driver, even the delivery as a service providers since they are all hemorrhaging money.
I looked at my most recent receipt for something more realistic: A $12 (in store) pizza was listed on doordash at $14.25 and I paid $17.30 in app with the Chase CSP discount. I guess not everyone has the card, but IMO it’s financially irresponsible not to.
Note that this restaurant is a 20 minute drive each way. Even if I worked minimum wage ($15/hr in CA) it would have cost me a lot more ($10 time + $5 gas!) to pick it up myself.
- Cause huge pileups for restaurant workers, who in pre-delivery app times were shielded by the presence of "a line", which puts a natural limit on order throughput (people drop out of line or don't enter when it's too long)
- Generally aren't good at giving prompt notifications, which sucks for both the driver and the order maker
I'm starting to believe two sided marketplaces tend to be worse for everyone except for the intermediary
> Give hilariously bad estimates for delivery time.
They lie and try to blame restaurants for slowness too. I've found that most of them have a specific timer for the all the stages before "driver waiting at the restaurant". If they can't allocate a driver or he doesn't arrive there by that time, the status will switch to "driver waiting at the restaurant" even if that's not yet the case, putting the blame on the restaurant.
I had suspicions about most of them doing it but what I can say for sure is that I caught Uber Eats doing this by calling the restaurant directly and confirming that there was absolutely nobody there and the food has been ready for 40 minutes.
People who do not understand the role of balking and price information act at their own peril. This economic backpressure is something that executives hate - it keeps line from going up - but people who actually do the work love, because it keeps workloads manageable.
If you ever wanted a feature-length explanation of queueing theory and how ignoring it makes everything worse, well... here you go: https://www.youtube.com/watch?v=9yjZpBq1XBE . The context is Disney parks and Fastpass, but the lessons are applicable to basically any business. Everything is a queue.
> Give hilariously bad estimates for delivery time.
Huh, I wonder how universal this is. I agree with this take for Lyft and Uber (for rides), but for Uber Eats, at least, it's been incredibly rare for it to take longer than the estimate, and in the majority of cases the food arrives 5-10 minutes faster than the estimate suggests.
DD drivers definitely take their frustration out on both restaurants and DD customers.
I've seen a lot of drama from DD drivers at restaurants, one thing that sticks in my mine was during a midnight run to White Castle. The place was packed and the workers kept asking about this huge bag of food for DD. The bag was easily 2 foot tall and completely packed full of food. The entire time I'm waiting on my food, people keep asking "any word on this door dash?"
Then some lady comes in screaming, "f- y'all, I've been waiting 20 f- minutes for a f- order and y'all slow mfers won't do shit!" The manager tells her the order is here and has been ready for 15 minutes. She goes up to the counter, takes the food, then throws the drink at the manager, screaming "f- you", throws the bag of food back at them yelling, "f- door dash" and "f- this $4 tip!"
So, not only did the person not get their food (and probably didn't find out for a long time afterwards), the restaurant had to cover the costs of all of it, and the delivery driver was out like her time and gas.
Interestingly, I found tipping less will get you way better service and quicker food. I did some experiments after I found food always comes quicker when my wife orders - turns out she doesn’t overtip like I do. I tried a bunch more times and found this to be true, at least with Uber Eats.
What I’m guessing happens is that if you tip high, less scrupulous but tech savvy drivers will snag the delivery. These folks have multiple accounts and work for multiple services at once, so your order is way down on their list. It frequently comes with location spoofing, where the driver is supposedly waiting at the restaurant for nearly an hour, and once they’re actually on their way, they’ll teleport miles away (having unlocked their location).
When I tip less, I don’t see this behavior. It’s probably folks not gaming the system that will take whatever delivery pops up.
It's bonkers to me that the drivers can see the tip before they accept the delivery. Hell, weird that they can see it before the delivery is completed, even.
Tips are supposed to be for good service! I know they've been perverted into more than that by a combination of unscrupulous business owners and the US's broken tax code, but... c'mon. These services shouldn't even ask for a tip until the delivery is complete, let alone show the amount to the driver before they accept the job.
(I'm fine with them asking for the tip as a part of the initial checkout, though, since I imagine many people won't remember to revisit the app post-delivery within the tipping window, even if they did want to leave a tip, and that alone would unfairly take money out of drivers' pockets. But the tip should be adjustable for some amount of time after the delivery completes, and the driver shouldn't see it until that time expires. Amazon's grocery delivery has this right.)
If drivers can see the tip before accepting the job, then it's not a tip: it's a competitive bid that the customer makes for delivery drivers... though if your theory is correct, it's already gamed into uselessness.
Uber Eats drivers aren't shown any of the tip beforehand, in fact they will never know whether or not yoy tipped until one hour after delivery has been completed.
Doordash on the other hand will hide any tips over $4 and have also gone back to stealing them.
I used to drive for both and had to stop when UE no one was tipping meaning jobs paid only $2.50-3.50 for the whole job, meaning with Cali gas prices even before the pandemic you were losing money on 90% of jobs.
Went to DD only for a while after that until I caught them lying and underpaying on mileage and keeping tips again.
So, to reiterate, UE doesn't show drivers your tip until one hour after drop off. DD hides all tips over $4 until after drop off,but will keep tips over $4 probably 80% of the time.
I had to start texting customers at drop off to let them know what the job had paid and what the tip was and to please let me know if there were any discrepancies.
It got to the point where more often than not DD was keeping part or all of the tip over $4. Ie customer tipped 10, I received 5. Wal-Mart is known to keep 100% of tips through DD, as well as Mountain Mike's Pizza and a few others.
The subreddits will show customers things from the driver's point of view.
What I've found is that normally, the consumer - restaurant contract is between two parties. I pay food, I get to eat. If there's a problem, I tell the restaurant, and they fix it. There's ample opportunity to find an amicable resolution to any issues that arise.
When you add DoorDash or any other third party delivery service into the equation, you add two more parties to this - the service itself, and the driver, who is usually an independent contractor.
What this has led to in my experience is that when something goes wrong, instead of me working it out with the restaurant, I am left frustrated, hungry, and hung out to dry by three parties - the restaurant, the platform, and the contractor.
If you read enough of the DoorDash subreddit[1], you realize that a tip is not a gratuity for good service, it's a bid for an independent contractor to take up your delivery. However, you have no ability to choose which Dasher takes it, and they are under no obligation to represent you as your agent or look out for your interests. So if they show up and the food is cold, not their problem, they get the tip because they accepted the bid.
When DoorDash had a major outage some time back, I had placed an order for about $70, generous tip (because I realize it's really a bid) and fees included. My order was prepared and ready for pick up just as the whole platform went down. It was impossible to cancel my order, because DoorDash was down, so I made alternate arrangements for dinner and figure I'll reach out for a refund when things are back up.
About three hours later, I get a notification that my order is out for delivery. The optimist in me hoped that the restaurant saw that some food sat out in the "danger zone" for several hours and remade it, or that the Dasher realized that the containers weren't the slightest bit warm, or something like that, but nope. I got dropped off a lot of food that was beyond safe to eat, not even worth saving to have as leftovers for a later meal, and now I have to dispose of all of it.
When I finally got through to support later that night, I asked for a refund, and they said they could only give me a credit for the meal, not the tip. I said I want the whole order refunded to my original payment, they said well, here's a credit and it will convert over to that later. One week and several phone calls later, they stopped telling me it was "too late to get a refund" and I got my refund and uninstalled the app. I don't need that negative energy in my life.
> What this has led to in my experience is that when something goes wrong, instead of me working it out with the restaurant, I am left frustrated, hungry, and hung out to dry by three parties - the restaurant, the platform, and the contractor.
My experience with delivery services (mostly, but not exclusively, Postmates) is that they are usually very good at giving refunds (your experience clearly sucked, though!), which is nice (but I’m guessing not for the drivers, who may or may not be at fault), but that restaurants with their own delivery services have been more willing to send out the missing food on an expedited basis, which is often a better resolution (if I didn’t want the food more than the money, I wouldn’t have ordered in the first place.)
I’ve also noticed that wrong or missing food items are more common with third-party delivery services.
This is the same reason I never use "portals" to book travel and airlines. It's even worse because I also don't get any loyalty points.
Of course this is different with my work travel portal run by Concur. I get to keep the points/miles and "non refundable" tickets are refundable when the airlines are trying to stay in the good graces of a company that books...a lot.. of money in travel.
1. When I am on business trips and getting reimbursed, I don't care. It's "other people's money"
2. The food delivery services have made it possible for us to have one car off an on since 2020 and not have to pay for two cars. In fact, we just sold our newer car back to the dealer and are sharing one car now saving us $900+ a month in car insurance, car payments, gas, maintenance, etc.
We don't plan to have a car for the next three years as we embark on our "digital nomad" existence.
If I can get away without ever having a car again, I will. It just doesn't make sense for me as someone who works remotely and has grown kids and really only needs to get out on the weekend to deal with paying for a car just to sit in the garage most of the time.
> $900+ a month in car insurance, car payments, gas, maintenance, etc.
There's a huge gap between 'no car' and $900/mo in car expenses. Buy a used car, not too old, and do basic maintenance (oil/filter, brakes, etc) yourself where you can. It's trivial to own and operate a car for well under $200-$300/mo - millions of people do it.
Seems like all restaurants should charge an extra fee to delivery services they didn’t sign up for. If the policy for the driver is just to pay whatever then there is no crime here.
Restaurants use this extra fee to compensate for the bad reviews.
If the policy changes for the driver then a customer is screwed over with a canceled order, guess who gets the blame? The delivery service!
For carry out orders, there is an additional $5 surcharge added. This is in place to cover issues arising from stolen orders and poor 3rd party delivery experiences. Display your ID matching the name on the order to receive a refund of the fee.
I was recently offered an affiliate link for a company that charges $20/mo for its service. They offered me $25 per sign up, and the end-user gets 50% off using my affiliate link.
I am not an unethical person, but the thought of arbitrage did cross my mind...
This seems pretty different -- you have a relationship with that company. Probably there's like a contract, right? They must have included something in the fine print about not taking advantage of the service yourself (unless they are, like, real dumb).
Restaurants have no obligations to random people on the internet who decide to re-sell their food without permission.
Not the same, but this reminds me of years and years ago when Google was giving away free AdWords credit. I think I got $75, and spent it on ads using my affiliate link for another service that offered credit for affiliate signups. I very easily maxed out my credit allowance for that. Not long after, the company got wind of what was going on and added something to their affiliate terms to disallow that.
It's funny, because there was no deception involved: the ad text I used was something like "Sign up for [service] and get $[discount] off", which was true, as the affiliate link offered a discount for the person signing up (in addition to the credit I would get as the affiliate). The company in the end just didn't like that I spent $75 of someone else's money to acquire customers for them.
When I worked at Coinbase, a Data Scientist did that to some huge volume. Company didn't care. Instead of hiring a bunch of people to manage ads, it was someone doing it in off-hours for $10 per signup.
I’m not clear where ethics fits in here. Was that expressly limited? They’re offering you an affiliate link to drive conversions - they’ve externalized sales to you - what (more) permission do you need from them?
They’re paying you to get real people to sign up with the intention of using the service. If you sign up a bunch of sock puppet accounts, or pay a bunch of people to sign up for a month and then cancel, then you aren’t holding up your part of the (perhaps unwritten) deal
If DoorDash literally just gives their runners a credit card and pays whatever the restaurant charges, can restaurants just charge them like $1000 for a pizza? There must be a limit but I wonder what it is...
Top comment on that post is great, I'll just quote it in its entirety:
Collin
May 19, 2020
Liked by Can Duruk
I was the former Head of Innovation at Grubhub, so I have seen the truth behind many of these claims first hand. Sadly, I invented a lot of the food delivery technologies that are now being used for evil. There were so many great points made here, and I’m glad people are finally paying attention to this. I will try to only add to a few.
COVID-19 is exposing the fact that delivery platforms are not actually in the business of delivery. They are in the business of finance. In many ways, they are like payday lenders for restaurants and drivers. They give you the sensation of cash-flow, but at the expense of your long term future and financial stability. Once you “take out this loan” you will never pay it back and it will ultimately kill your business.
In the case of restaurants, these platforms slowly siphon off your customers and then charge you to have access to them. They are simultaneously selling these same customers to your competitor across the street, but, don’t worry, they are also selling their customers to you.
For drivers, they are banking on a workforce that is willing to mortgage their assets, like cars and time, well below market value, in exchange for money now. They know that most delivery drivers are simply not doing the math on the actual cost of providing delivery (time, gas, car maintenance, payroll taxes...etc). If they did, drivers would realize that they are actually the ones subsidizing the cost of delivery.
Delivery platforms are “hyper-growth” businesses that are trying to grow into a no-growth industry. Food consumption really only grows at the rate of population growth, so if you want to grow faster than that, you have to take market share from someone else. Ideally, you take it from someone weaker, who has less information. In this industry, the delivery platforms have found unsuspecting victims in restaurants and drivers.
The competition for customers has not gone away. It has simply moved online. Many restaurants have been too slow, or unwilling to adapt. Delivery platforms and other restaurants are taking advantage of this to gobble up market share. Restaurants need to realize that they are now running e-commerce businesses and they need to act accordingly. Being proficient on Google, Yelp, Facebook and the dozens of other platforms is no longer optional, it is essential.
My team is trying to do everything we can to help restaurants transition, but restaurants have to be willing to change. You can learn more about what we are doing to fight back at zero.eatgeek.com. Stay hungry.
The holy grail of food delivery: decent food, delivered reasonably quickly, for the same (or lower) net price as in-person at a sit-down restaurant, without predatory gig economies.
There seem to be one or two key inflections that make this feasible. Examples: (a) autonomous vehicles nuking delivery costs; and/or (b) ghost kitchens to eliminate restaurant overhead.
In light of that... these companies are really just predicting where the ball will be when (a) and/or (b) are commoditized: Capturing market share & distribution now with marginal economics while waiting for one or two key inflections.
I call the local pizza place a couple times a month. I place the exact same order I always do. They ask for my name and phone number each time, but the whole call still only takes about a minute. Who needs an app.
Readit News
I ordered $41 of food and was stuck with a $22 bill (including a $5 tip I added). Delivery was "free" for this order.
This taught me a valuable lesson: if DD sends you a coupon for less than $20, it is worth zero. If it's between $20 and $35, it is worth about 10 bucks (especially when you consider how they inflate prices for dishes).
About a week later I was doing my household budget and looked at the charge on my account, and it excluded the discount. Once you added in delivery, service charge and the tip, I ended up paying 30%+ more for the food (and didn't have my coupon).
I think this was a genuine dark pattern that they use, although I have no interest in putting it to the test. After a failed payment, they auto remove any applied coupons to your transaction....
This was my first and guess-what, last order.
I have no idea how DD continues to lose money with this business model.
Many years ago when I was living in Rochester, NY as a student there was a service called “Rochester Delivers” which was essentially DoorDash without internet. They printed a big book compiling all the restaurant menus and you ordered over the phone. The price adder was always too much for a poor student like me, but I figured they probably were raking it in from the slightly richer folks.
Fast forward many years, and I mention to one of my good friends this pre-DoorDash service. Turns out he was actually the one running it. I knew he’d lived in Rochester around the same time I had, but hadn’t known him back then and had no idea. He said the entire thing was a disaster, impossible to make money, and it basically drained all his savings trying to keep it afloat.
Labor in the US is too expensive for sufficient number of people in the US to afford it that would allow a business like DoorDash to earn a profit.
Now you have big VC companies bleeding money while stealing the tips and dumping more costs on the consumer, which further hurts the restaurant. It’s a gross business.
DD's value prop is that they deliver. If you don't want that, then yes it's probably not for you.
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Off the top of my head, yesterday I passed a billboard for McDonalds advertising two large sandwiches for $6.
Lets open Uber Eats and try ordering two Big Macs... $13.68
So they don't carry the deals. Not looking good already.
Went to checkout...
$1.49 delivery fee for a place 6 minutes away. Fair enough.
$3.27 service fee. The explanation text is implying the cost of servicing my order (orchestration essentially) is more than double the cost of delivery.
$2.00 CA Driver Benefits fee. Delivery drivers were always employees of independent stores, but Uber took such offense to being forced to provide healthcare that they itemize the cost.
Grand total comes out to $20 before tax. For a $6 meal in store.
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And in case you were thinking "Well Uber isn't DoorDash" this whole time... DoorDash comes out to $22 before tax.
Has a "traditional" delivery place ever charged you a 60% delivery fee?
It's so absurd I even tried increasing the order size... the ratio of price of fees to price of food actually went up!
And all this is before tips!
InstaCart’s pricing seems way more reasonable.
Ex-Grubhub exec calls delivery apps “payday lenders for restaurants and drivers” - https://news.ycombinator.com/item?id=23278157 - May 2020 (8 comments)
Doordash and Pizza Arbitrage - https://news.ycombinator.com/item?id=23216852 - May 2020 (514 comments)
McDonalds has a 2 for $2 deal on sausage mcmuffins & hashbrowns - been around forever. Let's say you and the wife want a McMuffin & a hashbrown each - you're in for $4 dollars and a bit of change for tax.
Here is the same meal via DoorDash:
McMuffins: $2.87ea Hash browns: $1.91ea
Subtotal: $9.56 (just below the 10 dollar minimum to wave the fee if you have DD+)
Delivery fee: $1.99 Service fee: $3.00 Tax: $0.91 Dasher Tip: $5 (good luck getting your order on time if you tip less than this)
Grand Total: $20.46 for $4 of food.
You can "optimize" by ordering an additional hash brown to get over the $10 hump so you can wave the delivery fee and reduce the service fee - which will instead cost you a total of $17.91 for $5 worth of food. Either way it's a shit deal. Not included here are the costs associated with 1 in every 4-5 orders being incorrect, or delivered to the wrong house and the hassle that adds to your life.
Obviously I went with low cost items to illustrate a point but often any food prices you see on DD are a good 50% markup vs going in person regardless of the restaurant before you even get into fees and tips.
It’s a fake industry held up by VC money.
I looked at my most recent receipt for something more realistic: A $12 (in store) pizza was listed on doordash at $14.25 and I paid $17.30 in app with the Chase CSP discount. I guess not everyone has the card, but IMO it’s financially irresponsible not to.
Note that this restaurant is a 20 minute drive each way. Even if I worked minimum wage ($15/hr in CA) it would have cost me a lot more ($10 time + $5 gas!) to pick it up myself.
- Give hilariously bad estimates for delivery time. Dan Luu tracked this. https://twitter.com/danluu/status/1469755162004582400?s=20&t...
- Cause huge pileups for restaurant workers, who in pre-delivery app times were shielded by the presence of "a line", which puts a natural limit on order throughput (people drop out of line or don't enter when it's too long)
- Generally aren't good at giving prompt notifications, which sucks for both the driver and the order maker
I'm starting to believe two sided marketplaces tend to be worse for everyone except for the intermediary
They lie and try to blame restaurants for slowness too. I've found that most of them have a specific timer for the all the stages before "driver waiting at the restaurant". If they can't allocate a driver or he doesn't arrive there by that time, the status will switch to "driver waiting at the restaurant" even if that's not yet the case, putting the blame on the restaurant.
I had suspicions about most of them doing it but what I can say for sure is that I caught Uber Eats doing this by calling the restaurant directly and confirming that there was absolutely nobody there and the food has been ready for 40 minutes.
If you ever wanted a feature-length explanation of queueing theory and how ignoring it makes everything worse, well... here you go: https://www.youtube.com/watch?v=9yjZpBq1XBE . The context is Disney parks and Fastpass, but the lessons are applicable to basically any business. Everything is a queue.
Huh, I wonder how universal this is. I agree with this take for Lyft and Uber (for rides), but for Uber Eats, at least, it's been incredibly rare for it to take longer than the estimate, and in the majority of cases the food arrives 5-10 minutes faster than the estimate suggests.
I've seen a lot of drama from DD drivers at restaurants, one thing that sticks in my mine was during a midnight run to White Castle. The place was packed and the workers kept asking about this huge bag of food for DD. The bag was easily 2 foot tall and completely packed full of food. The entire time I'm waiting on my food, people keep asking "any word on this door dash?"
Then some lady comes in screaming, "f- y'all, I've been waiting 20 f- minutes for a f- order and y'all slow mfers won't do shit!" The manager tells her the order is here and has been ready for 15 minutes. She goes up to the counter, takes the food, then throws the drink at the manager, screaming "f- you", throws the bag of food back at them yelling, "f- door dash" and "f- this $4 tip!"
So, not only did the person not get their food (and probably didn't find out for a long time afterwards), the restaurant had to cover the costs of all of it, and the delivery driver was out like her time and gas.
If they did, they need to sign a less abusive deal with DD.
What I’m guessing happens is that if you tip high, less scrupulous but tech savvy drivers will snag the delivery. These folks have multiple accounts and work for multiple services at once, so your order is way down on their list. It frequently comes with location spoofing, where the driver is supposedly waiting at the restaurant for nearly an hour, and once they’re actually on their way, they’ll teleport miles away (having unlocked their location).
When I tip less, I don’t see this behavior. It’s probably folks not gaming the system that will take whatever delivery pops up.
Tips are supposed to be for good service! I know they've been perverted into more than that by a combination of unscrupulous business owners and the US's broken tax code, but... c'mon. These services shouldn't even ask for a tip until the delivery is complete, let alone show the amount to the driver before they accept the job.
(I'm fine with them asking for the tip as a part of the initial checkout, though, since I imagine many people won't remember to revisit the app post-delivery within the tipping window, even if they did want to leave a tip, and that alone would unfairly take money out of drivers' pockets. But the tip should be adjustable for some amount of time after the delivery completes, and the driver shouldn't see it until that time expires. Amazon's grocery delivery has this right.)
If drivers can see the tip before accepting the job, then it's not a tip: it's a competitive bid that the customer makes for delivery drivers... though if your theory is correct, it's already gamed into uselessness.
Uber Eats drivers aren't shown any of the tip beforehand, in fact they will never know whether or not yoy tipped until one hour after delivery has been completed.
Doordash on the other hand will hide any tips over $4 and have also gone back to stealing them.
I used to drive for both and had to stop when UE no one was tipping meaning jobs paid only $2.50-3.50 for the whole job, meaning with Cali gas prices even before the pandemic you were losing money on 90% of jobs.
Went to DD only for a while after that until I caught them lying and underpaying on mileage and keeping tips again.
So, to reiterate, UE doesn't show drivers your tip until one hour after drop off. DD hides all tips over $4 until after drop off,but will keep tips over $4 probably 80% of the time.
I had to start texting customers at drop off to let them know what the job had paid and what the tip was and to please let me know if there were any discrepancies.
It got to the point where more often than not DD was keeping part or all of the tip over $4. Ie customer tipped 10, I received 5. Wal-Mart is known to keep 100% of tips through DD, as well as Mountain Mike's Pizza and a few others.
The subreddits will show customers things from the driver's point of view.
When you add DoorDash or any other third party delivery service into the equation, you add two more parties to this - the service itself, and the driver, who is usually an independent contractor.
What this has led to in my experience is that when something goes wrong, instead of me working it out with the restaurant, I am left frustrated, hungry, and hung out to dry by three parties - the restaurant, the platform, and the contractor.
If you read enough of the DoorDash subreddit[1], you realize that a tip is not a gratuity for good service, it's a bid for an independent contractor to take up your delivery. However, you have no ability to choose which Dasher takes it, and they are under no obligation to represent you as your agent or look out for your interests. So if they show up and the food is cold, not their problem, they get the tip because they accepted the bid.
When DoorDash had a major outage some time back, I had placed an order for about $70, generous tip (because I realize it's really a bid) and fees included. My order was prepared and ready for pick up just as the whole platform went down. It was impossible to cancel my order, because DoorDash was down, so I made alternate arrangements for dinner and figure I'll reach out for a refund when things are back up.
About three hours later, I get a notification that my order is out for delivery. The optimist in me hoped that the restaurant saw that some food sat out in the "danger zone" for several hours and remade it, or that the Dasher realized that the containers weren't the slightest bit warm, or something like that, but nope. I got dropped off a lot of food that was beyond safe to eat, not even worth saving to have as leftovers for a later meal, and now I have to dispose of all of it.
When I finally got through to support later that night, I asked for a refund, and they said they could only give me a credit for the meal, not the tip. I said I want the whole order refunded to my original payment, they said well, here's a credit and it will convert over to that later. One week and several phone calls later, they stopped telling me it was "too late to get a refund" and I got my refund and uninstalled the app. I don't need that negative energy in my life.
1: https://www.reddit.com/r/doordash/
My experience with delivery services (mostly, but not exclusively, Postmates) is that they are usually very good at giving refunds (your experience clearly sucked, though!), which is nice (but I’m guessing not for the drivers, who may or may not be at fault), but that restaurants with their own delivery services have been more willing to send out the missing food on an expedited basis, which is often a better resolution (if I didn’t want the food more than the money, I wouldn’t have ordered in the first place.)
I’ve also noticed that wrong or missing food items are more common with third-party delivery services.
Of course this is different with my work travel portal run by Concur. I get to keep the points/miles and "non refundable" tickets are refundable when the airlines are trying to stay in the good graces of a company that books...a lot.. of money in travel.
1. When I am on business trips and getting reimbursed, I don't care. It's "other people's money"
2. The food delivery services have made it possible for us to have one car off an on since 2020 and not have to pay for two cars. In fact, we just sold our newer car back to the dealer and are sharing one car now saving us $900+ a month in car insurance, car payments, gas, maintenance, etc.
We don't plan to have a car for the next three years as we embark on our "digital nomad" existence.
If I can get away without ever having a car again, I will. It just doesn't make sense for me as someone who works remotely and has grown kids and really only needs to get out on the weekend to deal with paying for a car just to sit in the garage most of the time.
There's a huge gap between 'no car' and $900/mo in car expenses. Buy a used car, not too old, and do basic maintenance (oil/filter, brakes, etc) yourself where you can. It's trivial to own and operate a car for well under $200-$300/mo - millions of people do it.
Restaurants use this extra fee to compensate for the bad reviews.
If the policy changes for the driver then a customer is screwed over with a canceled order, guess who gets the blame? The delivery service!
For carry out orders, there is an additional $5 surcharge added. This is in place to cover issues arising from stolen orders and poor 3rd party delivery experiences. Display your ID matching the name on the order to receive a refund of the fee.
I am not an unethical person, but the thought of arbitrage did cross my mind...
Restaurants have no obligations to random people on the internet who decide to re-sell their food without permission.
It's funny, because there was no deception involved: the ad text I used was something like "Sign up for [service] and get $[discount] off", which was true, as the affiliate link offered a discount for the person signing up (in addition to the credit I would get as the affiliate). The company in the end just didn't like that I spent $75 of someone else's money to acquire customers for them.
Collin
May 19, 2020
Liked by Can Duruk
I was the former Head of Innovation at Grubhub, so I have seen the truth behind many of these claims first hand. Sadly, I invented a lot of the food delivery technologies that are now being used for evil. There were so many great points made here, and I’m glad people are finally paying attention to this. I will try to only add to a few.
COVID-19 is exposing the fact that delivery platforms are not actually in the business of delivery. They are in the business of finance. In many ways, they are like payday lenders for restaurants and drivers. They give you the sensation of cash-flow, but at the expense of your long term future and financial stability. Once you “take out this loan” you will never pay it back and it will ultimately kill your business.
In the case of restaurants, these platforms slowly siphon off your customers and then charge you to have access to them. They are simultaneously selling these same customers to your competitor across the street, but, don’t worry, they are also selling their customers to you.
For drivers, they are banking on a workforce that is willing to mortgage their assets, like cars and time, well below market value, in exchange for money now. They know that most delivery drivers are simply not doing the math on the actual cost of providing delivery (time, gas, car maintenance, payroll taxes...etc). If they did, drivers would realize that they are actually the ones subsidizing the cost of delivery.
Delivery platforms are “hyper-growth” businesses that are trying to grow into a no-growth industry. Food consumption really only grows at the rate of population growth, so if you want to grow faster than that, you have to take market share from someone else. Ideally, you take it from someone weaker, who has less information. In this industry, the delivery platforms have found unsuspecting victims in restaurants and drivers.
The competition for customers has not gone away. It has simply moved online. Many restaurants have been too slow, or unwilling to adapt. Delivery platforms and other restaurants are taking advantage of this to gobble up market share. Restaurants need to realize that they are now running e-commerce businesses and they need to act accordingly. Being proficient on Google, Yelp, Facebook and the dozens of other platforms is no longer optional, it is essential.
My team is trying to do everything we can to help restaurants transition, but restaurants have to be willing to change. You can learn more about what we are doing to fight back at zero.eatgeek.com. Stay hungry.
There seem to be one or two key inflections that make this feasible. Examples: (a) autonomous vehicles nuking delivery costs; and/or (b) ghost kitchens to eliminate restaurant overhead.
In light of that... these companies are really just predicting where the ball will be when (a) and/or (b) are commoditized: Capturing market share & distribution now with marginal economics while waiting for one or two key inflections.