Comment by _trampeltier

3 days ago

This story comes to my mind.

A pizzeria owner made money buying his own $24 pizzas from DoorDash for $16

https://www.theverge.com/2020/5/18/21262316/doordash-pizza-p...

Note: the Verge article links to this blog post, describing the situation in more detail: https://www.readmargins.com/p/doordash-and-pizza-arbitrage

  • They could have made another $5 per 10 pizzas after order #1 by just delivering the pizza to themselves and sending the same boxes back out in the next delivery, and so on.

    • An actual DoorDash driver had to do the delivery though. So you risk being reported and also, if they take awhile, pizza gets cold.

      But they also could have just raised prices on everything but the cheap one DoorDash was using for pricing.

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  • Maybe that's my EU mindset, but I'm baffled how it's even legal to add a company to your public listing - complete with fake phone number - and just declare they're taking deliveries, all against the explicit wishes of the company.

    (Complete with "chill bro, I was just <s>joking</s>demand testing you" at the end)

    The blogger calls this being "tricked" to sign up for DoorDash. Seems to me, this is the same way a burglar "tricks" you into giving them your valuables.

    • It could be a trademark violation, even in the US, under the argument that DoorDash was “passing itself off” as the infringed-upon company. However, DoorDash would then argue that it was being honest – it was genuinely delivering authentic goods. It could violate trademark no more than a convenience store violates a trademark by correctly claiming it sells Coca-Cola.

    • Well, you can probably add some fine print somewhere that listings are just for educational purposes or something and may not represent the actual company.

If you want to fight the VCs, you have to pull stunts like this. If they want to destroy local infrastructure because "free market", in an attempt to secure monopolies for themselves, then let them operate in a free market.

  • > then let them operate in a free market.

    I think you meant to say "operate in a market that is regulated in precisely the way they want it to be".

    • I said what I meant: most VC-backed startups could not survive in a real-world environment. Thank you for highlighting the distinction. Note that a free market isn't necessarily an unregulated market (see: Adam Smith).

      Personally, I don't believe that free markets are a sensible way to manage local affairs. They work well on a medium scale, where goods are fungible and efficiency matters: but for something like the local pizza place, customer behaviour doesn't match that of a market participant. I don't think it's sensible to expect the local pizza place to be free of arbitrage opportunities. Someone who identifies and exploits such opportunities (e.g. "free meals available on request") would be taking advantage of goodwill, and the reason we can't have nice things. However, if a large corpo comes along and starts trying to undercut the locals, absolutely mug them for all they're worth: they're playing a different game, and it's not one you should want them to win.

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  • But why do you think they’re harming “local infrastructure”? The food delivery services didn’t hurt anything but their investors in the end. And they kept the restaurant industry alive during the pandemic, the fallout would have been so much worse. I work in the industry and know several bar/restaurant owners who will tell you DoorDash and competitors are the only reason they made it through 2020-21.

    Early on they stopped prohibiting restaurants from upcharging, so restaurants all did. They ended up with some extra sales and profits. The customer got VC funded free delivery.

    Enough alternatives kept the market place efficient. DoorDash can’t get too abusive when UberEats and Instacart are competing, restaurants have no switching cost.

    The whole thing worked for basically everyone involved except maybe the investors (DoorDash has significantly underperformed the S&P since it debuted on the market.)

    • This has not been my experience.

      From my side, as someone old enough to remember Domino's running the "there in thirty minutes or it's free" promotions... These delivery services absolutely tanked the quality of delivery.

      Now you can basically only get slow delivery of over priced, cold food. Sure, you can get it from far more places, but it's a pyrrhic victory if I've ever seen one.

      Used to be if a restaurant offered delivery, it was ok food for delivery, at ok prices, and their drivers had gear to keep it warm and presentable.

      Now we basically only do pick up because these universal delivery companies suck at the one fucking thing they're supposed to do. But they've run all the local restaurants out of the delivery game.

      1 reply →

    • Yeah, as someone else pointed out, the gig-delivery services killed the delivery industry. Sure I can get food from a bunch of shitty fast food places now, but deliveries are way more expensive and take forever. The only place that still does good delivery around me is Jimmy Johns and Dominoes. I used to have 15-20 good quality delivery places that were fast with free delivery. And I'm as talking on the phone averse as anyone but calling a delivery place was just easier than using an app and they could give you updates on when they were out of something or whatever.

      Uber eats / Door Dash suck so much I have no desire to order delivery food at all other than the two that run their own delivery and I know it will be a consistent experience. Anything else I either pick it or go without.

      It was also shady how they paid for ads to supplant the phone numbers on Google so you were calling Door dash instead of the food place.

      5 replies →

    • DoorDash finds a way to consistently screw up orders.

      Order A,B,C - receive only A+B, or A,B,D. No explanation. Tipped generously.

      For a long time, I myself drove and picked up my orders. The same restaurants rarely made mistakes. I never had to ask for missing item to be included. They always had everything in the bag.

      It’s happened so often, it has to be malice from one of the parties involved.

      10 replies →

    • My understanding is food delivery companies take a huge cut (like 30%) so restaurants are forced to raise their prices significantly or risk losing customers. Even with that cut, food delivery customers still have to pay a significant delivery/service fee.

A friend of mine did this, and had the food delivered to himself.

They banned him eventually.