Comment by JumpCrisscross
6 years ago
I cut this deal with my neighborhood Italian restaurant!
I texted the owner about being miffed they hadn’t told me they were on DoorDash. He replied. They aren’t. We compared pricing, and found the prices advertised are way off from what the restaurant charges.
So I placed a $5,000 order to the neighbourhood homeless shelter. DoorDash paid him over $20,000, and I get free pasta for the rest of the year. (My neighbours have also partaken.)
Glad to know it’s scaling. SoftBank has assembled a unique concentration of stupidity for itself.
What was the deal? You pay 5,000, the owner gave you back your 5,000 and kept the 15,000 as profit from door dash? The owner made a massive profit and the shelter gets free food and it didn’t cost you anything?
> The owner made a massive profit and the shelter gets free food and it didn’t cost you anything?
We’re in the midst of a pandemic. The restaurant stays afloat, nothing more. The shelter got a donation, and I got promises of comped deliveries and catering.
It cost me $5,000; it cost DoorDash over twenty thousand.
That’s fine, I wasn’t trying to expose you, I just wanted to understand. It looks like everyone is happy, the restaurant gets cash, the shelter gets food, and you get... a lot of pizza for the rest of your life! I don’t think I’ve eaten 5,000$ worth of pizza in my life so far haha
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Time for some cross-platform integration: start GoFundMes to crowdfund arbitrage of SoftBank derivatives in support of local small businesses.
This seems very unethical. The fact that you don't like Softbank or DoorDash or the gig-economy or that you're sending pizza to homeless people is irrelevant. The fact is you're exploiting a bug to personally benefit at the expense of investors.
Why wouldn't you apply the same principals of ethical hacking, where you would notify the party of the exploit?
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This reminds me of the scene in Silicon Valley where Richard bankrupts a similar delivery service that's not profitable in a specific use case by ordering a huge amount of Pizzas.
15000 minus the actual cost of the food.
... so you basically used Doordash's algorithms to make Softbank donate $15k to your local homeless shelter?
That's fucking awesome. Way to go, man.
Why wouldn't the pizza place order $100K worth of pizza from themselves to themselves? They don't even have to make it.
A Doordash delivery guy actually has to pick up the food though right?
This also does probably provide some legal cover as well.
He can pick up empty boxes and then immediately hand them back as the delivery address is the restoraunt address, no?
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I can only assume that such a large order would be eventually flagged by the system. But I imagine ordering 50 pizzas every night can be relatively "normal"(feeding the night shift or whatever).
This really makes me happy but I hope you delete this before it becomes mainstream and DD catches on.
I hope it goes mainstream and they all go under because nobody wants to pay their crazy prices while not actually supporting a restaurant
I mean if anything their prices are crazy low. I can buy about 30 minutes of a real human's time to deliver me food for about $3. With pizza joints and Chinese takeout it's averaged into the prices but not with these delivery apps. I've seen a few inflated prices but almost every restaurant around here is just charging the same as they always have.
A delivery service that supported the restaurant would be way way more expensive.
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> delete this before it becomes mainstream
ignoring the fact that this post itself is top of HN and going viral?
I don't really think going viral on HN === mainstream ;)
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I've always dreamt of having a post of mine read in court.
Hi judge!
In this case DD is essentially acting like a ticket scalper. And since DD screwed themselves, is there even a law broken?
No idea, I'm not a lawyer. But in the original post he mentioned that he "cut a deal" with the restaurant, which to me suggests that he got the $5k back, possibly in cash, from the restaurant. If he then pockets to tax he saved, that smells like tax evasion.
He then tweaked his story to say that this cost him $5k. Why did he say he was cutting a deal then?
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if you ever apply to YC, this is your YC story.
I've been thinking about this comment a lot today. It's cool that you have relationship with the owner of a local restaurant! I know the owners of a local coffee shop pretty well and it's been really interesting (and a bit depressing) discussing the economics of owning a small business with them.
And when you know your local business owners by name, opportunities like this emerge.
That's capitalism as its finest.
Saudi money (via SoftBank) is paying for poor people's food (and also subsidizing their transportation, via Uber).
Frankly, after all these years I still don't get it. Are the Saudis that gullible? How much more they need to lose to understand they're being duped?
They've only really known oil for 3 generations, so yes.
And they're also desperate. The future where the world doesn't need their oil (or they've run out) isn't a distant future anymore. It's coming, and coming faster and faster. They need to diversify anyway they can if they want to avoid going back to just being a desert. And so they're jumping at pretty much any deal they see
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Matt Levine's column Money Stuff touches on these questions every once in a while.
Until WeWork really blew up, it wasn't too hard as an investor to keep up the impression that the track record of Softbank was good enough.
(That's not to say that you couldn't re-interpret the track record in a negative way, even before WeWork. But nothing really forced you to.)
Some people can make a profit playing at casinos (more so in the past than now).
Does that make casinos dumb? No, just imperfect.
It's funny when this happens in our industry. It's called a security vulnerability. And if someone were to write a blog article about finding it, but also exploiting the fault several times over for their own financial gain, we'd be all up in arms over it, right?
Even if the exploited party itself it shady as hell. Say they were a credit card scammer, someone found a way of conning them for money, does that for a while to make some $$$, and then proudly writes a blog article exposing them.
Maybe I'm missing something though. That's looking at it rationally (?), but part of me also feels like, screw Doordash.
Nobody intentionally includes security vulnerabilities in a product. This is something that Doordash knows they are doing and have decided to do, not something they are doing accidentally.
Even taking a negligent security posture is not the same as intentionally including a flaw.
The place where these companies intend to make their profit is on charging for the credit card transaction.
I don't understand how this works.
If your order to doordash cost $5000, why did they pay the restaurant $20,000? That would suggest their prices are 4 times cheaper to the customer. But I thought everyone complained they were more expensive.
Surely DD are still keeping their commission from your order?
What have I misunderstood?
Did you read the article? This was covered there, though as a less extreme price difference.
Doordash seems to provide two different services.
1) Doordash has some deal with the restaurant, gets a commission on sales, fees, whatever.
2) Doordash has no deal with the restaurant, charges customer $x+y, buys food from restaurant at $x.
In the second case, Doordash may be charging much more than the menu price, if it things it can find customers who will pay it.
I think the trick here is that Doordash isn't charging the customer $x + $y, but $x - $y. X minus Y. That is, they're subsidizing the delivery - in order to generate demand, and then come to the restaurant with the data to convince them to sign up for 1). This was actually mentioned at the bottom of the article.
So in this story, 'JumpCrisscross paid $x-$y = 5k for an order to a homeless shelter, but the real, restaurant price for that order $x=20k, which means DoorDash has just subsidized the transaction for $y=15k. The restaurant got an extra $20k of business that day, and 'JumpCrisscross bought $20k worth of food for a shelter at 1/4 the price.
And the best part, they could probably do it again :).
EDIT: Reading the article again, it seems to me Doordash is supposed to be charging the customer $x in the lead generation phase; so perhaps the -$y part is a scrapper error.
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It is exactly the opposite of your #2, check out the article.
I wish I could vote a hundred times. What a great thing to do.
How much do you pay for pasta?
5,000$ of pasta would last me and my family until the end of my days.
At ~1-1.2 euros for half a kilo it's around 90 years worth of pasta (based on an average of 28 kilos per person per year in Italy)
I doubt he ordered dry pasta. Most likely he ordered 10 or so of every pasta dish on the menu.
What restaurants let you order dry pasta beside the ones in food halls?
Home Room in Oakland is delivering TP and dry pasta with delivery orders right now.
I predict we'll see a lot more of that kind of thing with reduced occupancy at restaurants. Come in for a meal, leave with a week's groceries.
Shrimp scampi at the deli by me is like $16. Ordering for a family of 4 with just 2-3 meals a week would easily cost $5k+
shrimps are way more costly than pasta
And even eating shrimps 3 times a week, with 5,000$ of shrimps a family of 4 could eat shrimps for a year.
> texted the owner about being miffed they hadn’t told me they were on DoorDash.
Why would someone do this?
If you knew the owner well enough to have their number, it doesn't seem totally crazy.
"Had no idea you did delivery! Boss just put in an order for a work event! See you Friday?"