This is an entertaining story of a business that didn’t work with DoorDash but would get complaints because DoorDash advertised the restaurant’s menu and would have its drivers bring its pies to customers, often cold because they lacked the right equipment. Because DoorDash got the menu prices wrong, they were able to engage in arbitrage that is pretty much the only way a restaurant can make money working with DoorDash.
There is, of course, a darker side of the story here. DoorDash screws over customers (who often get cold food), restaurants (who have to pay profit-margin-obliterating commissions), and drivers (who are paid poorly.) Despite all this:
Which brings us to the question – what is the point of all this? These platforms are all losing money. Just think of all the meetings and lines of code and phone calls to make all of these nefarious things happen which just continue to bleed money. Why go through all this trouble?
Grubhub just lost $33 million on $360 million of revenue in Q1.
Doordash reportedly lost an insane $450 million off $900 million in revenue in 2019 (which does make me wonder if my dream of a decentralized network of pizza arbitrageurs does exist).
Uber Eats is Uber’s “most profitable division” 😂😂. Uber Eats lost $461 million in Q4 2019 off of revenue of $734 million. Sometimes I need to write this out to remind myself. Uber Eats spent $1.2 billion to make $734 million. In one quarter.
Amazon just bailed on restaurant delivery in the U.S.
It’s kind of amazing that a business this exploitative can be this unprofitable. It’s like one of those cupcakes that have 3,000 calories worth of icing and still taste like nothing. At least with Uber venture capital-subsidized customers are often getting a good deal; these apps aren’t working for anyone and are losing money hand over fist with no conceivable path to profitability but the venture capital just keeps on coming.
Anyway, call your restaurant directly and pick up if they don’t deliver. It will be better for all concerned.