Comment by cletus
6 years ago
Wow, that was great. And honestly good on them for profit-taking on this arbitrage.
The author likes to pin this on zero-interest rates ("ZIRP") and that certainly explains why the system is awash with cash but I'd say he's missing a key point here.
When I moved to NYC (~10 years ago) I didn't order delivery at all. Honestly it's a huge pain. To call someone up and try and communicate an order to someone who probably doesn't have the best grasp of English (no offense intended here). I just couldn't be bothered.
What changed was Seamless came along and suddenly I could order food and not have to talk to anyone. It was (and is) amazing. In NYC at least the restaurants are still handling deliveries (with Seamless anyway) so there's still that control. Seamless/Grubhub seem to charge exorbitant fees but that's another issue.
As an aside, this is a key factor in my use for Uber/Lyft: the fact that the process is seamless (pardon the pun). You order a car without talking to anyone, it arrives and it drops you off. There's no awkward payment step. No dealing with a machine that's broken. No card skimming. It just reduces friction.
This is the promise of food delivery platforms: they benefit the consumer in terms of discovery, convenience and the seamlessness of ordering and payment. You might point out that people get cold pizza because UberEats drivers don't have the bag and you're right. But that's not an unsolvable problem.
Oh and this is the first I'd heard of Grubhub replacing Yelp phone numbers with their own call center. More evidence that Yelp is a cess pool that needs to be flushed. It's sad Grubhub is engaging in this. We have enough rent-seekers. Thanks anyway.
This is like the iPhone SE conversation - there was always a big group of people who would tell you that the reason they buy the iPhone SE is because it's the smallest iPhone. But its very clear that the company making iPhones is certain that people buy the iPhone SE because it's cheap.
It's the same here. Everyone will always tell you that these knew gig economy companies are so much better! Their service is better, they're quicker, you don't have to deal with people, you can order whenever you want etc. etc. But actually, it's probably going to turn out it's just cheap.
It's very likely these services are basically used by 90% of people because they're cheap, and they're cheap because they're losing money to gain market share. The problem is that once they need to turn a profit, they have to drive up margins and now that $16 pizza needs processing fees and costs for the delivery driver - now it's $22. Or more importantly, your $8 starbucks order is now $13. So the second that the prices reflect the true costs these businesses are going to shed customers like you wouldn't believe. Oh and in order to try and curb those costs you're going to see some guy in a broken down car do a tour of the city delivering everyone else's food before yours gets to you.
I think you're both right, there are two separate types of customers making the same choice. One group is more price-conscious, the other is more effort-conscious. I'm personally in the other group - I have less time and patience than money to spend on deliveries, so I'll pick an option based on seamlessness. E.g. I've been ordering food for years on aggregator websites instead of calling the restaurants, because this way I can input my order on a computer (vs. talking to a busy person in a noisy room over crappy cellular connection, which often enough ends in errors), and I can prepay the order. I don't carry much cash on me, and I don't enjoy the hassle of using it. And while some restaurants will allow paying by card on recepit, it usually involves one or two payment terminals shared between a bunch of drivers, which leads to longer delivery times and all sorts of other problems (I've had drivers forget or not be informed about the need to take a terminal with them). I'll gladly accept 10-20% higher price to avoid dealing with any of that.
It's a similar story for rideshares; I think the major benefit they offer over regular taxi is seamless payment that (almost) always works, and is always available.
People here (UK) use these apps even though they're more expensive than when the restaurant handles the delivery. I never paid for a delivery in my life before Deliveroo/UE, but the user experience is so much better with them that it's hard not to.
For example, it's a little bit confusing how to find my place, so something as simple as not having to explain it every time I call up (and inevitably have it transcribed incorrectly) makes a huge difference in friction.
I'm happy to pay delivery fees to the restaurant. I'm less happy to pay fees to drive returns for growth-obsessed venture funds.
I honestly don't know if I'm living in a different world than everyone else but I've been ordering food and taking cabs all my life and I've never had to deal with any friction. Like, you call the pizzeria, tell them what you want and then some college student delivers your stuff, and if you order for more than 20 bucks it doesn't cost you anything. Not even being facetious, but what problem do these apps solve?
I also don't know how "not having to talk to someone" is a perk.
I bet you have the same accent as most of the people you deal with. I do not, having moved halfway around the world, and doing things over the phone is often surprisingly painful.
I dunno, even at physical restaurants or cafes I often have issues where they didn't hear my order correctly. Just today I had a guy repeat my order (thank you to people who do this, it's the only way) and he'd forgotten the cheese. Phone calls to ethnic restaurants (as with GP, no offense intended) are another layer of trouble. With my local noisy Indonesian restaurant we had a 50% miss rate on our orders so usually just go in person now.
Written text is just so much nicer. And I can send the link to family still in the office or whatever and co-ordinate.
I almost never have problems making custom food orders in the USA, even when the order taker is not a native English speaker.
"I'd like a cheeseburger, only lettuce and ketchup."
But when I visited Australia, I had a much harder time placing the same order. Most of the order takers there were not native English speakers, and I learned pretty quickly that the difference between American English and Australian English was bigger than I realized.
Language is interesting.
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DD, UberEats and the like screw up orders too. I've had a few errors even though "i didnt have to talk to anyone"
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> taking cabs
It all depends on where you're hailing and where you're going to. Also on what you look like. Drivers don't like some locations and appearances.
> I also don't know how "not having to talk to someone" is a perk.
For us introverts it is.
It is indeed a perk for an introvert like me, but having to chose between empathy for another human and my discomfort, I prefer the former.
Yes, it will cause me anxiety to talk to someone, and go pickup an order. But if I was to avoid that and use an app, I'd be dipping my hand into their pockets and stealing money for a middleman. So I end up calling my preferred restaurant and picking it up myself.
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I'm an introvert and please don't include me in the tiny subset of introverts who consider this a perk.
There's a spectrum within introversion, and this sounds more on the edge of that spectrum.
Full disclaimer: I too originally had trouble with calling to order pizza. But in retrospect it wasn't introversion: I just wasn't used to initiating conversations with strangers on the phone. The solution was trivial: Script the "opening lines" before calling. After a few of these, it all became natural.
If the vendor can just get it right with minimal interaction on my part, I usually prefer not to interact.
In my experience, though, this is rarely true of restaurants, especially the less expensive ones. I usually won't even do drive-through, under the experience-informed observation that they're less likely to mess it up if they know I'll be standing at the counter checking their work.
This is a misunderstanding of what it means to be an introvert. Introverts are capable of talking to people. The inability or disinclination to place an order for food delivery is a sign that you are disabled, not introverted.
Yeah, it seems like you didn't grow up in a big city?
"Not having to talk to someone" is generally a perk for introverts.
Being able to get food delivered from places that don't deliver.
I don't think the apps really add anything substantial for restaurants that have their own delivery network.
Not even being able to talk to somebody is a negative feature if you have dietary restrictions. A friend is vegan, and she often skips over items which could be vegan with a slight substitution which is not offered via the app, but which would be easy to ask for if she could just talk to a human.
Yes. I used Yandex Taxi in Kazakhstan. I don't speak Kazakh nor Russian, but was able to get around in Almaty that way.
I have done the same with Uber in Poland, and with countless services in Germany before I learned German.
I really appreciate consuming a service at my pace, especially when there is a language barrier, a large order or alcohol involved.
My Uber experience in London is never seamless you always end up calling them as they can't find you or wait on the wrong side of the road. Suddenly cancel when they are nearly where you are waiting. Black cabs is seamless with the right app