Comment by Jcampuzano2
3 hours ago
I don't really understand how the personal economics for this work out for the majority of the population.
You'll always get some people who argue that time is money and that the saved time that people have from ordering from these services is an opportunity cost. But the reality is I'd wager that for probably 99% of the population, this is actually not true and the economics doesn't work out favorably after accounting for all the fees.
So then, all that is really left is convenience. And personally, I don't really find it that convenient at all. Often times the time it takes for an order to land on your doorstep is meaningfully longer than it would have taken for you to drive to the store and pick it up yourself.
In other words - these services really just profit off of laziness. And the sad part is I think we're just promoting a lazy society overall with lots of the newer services being offered.
No way.
Here's how it works out rationally: I just got home from work, the kids are a mess, the house needs cleaning, and my spouse is having a work crisis. The kids favorite treat is chipotle. Of all the options for "use money to make this go away so I can focus on the problem" paying $10 surcharge for doordash is by far the cheapest.
"Hey kids chipotle treats are on the way - but you have to go get your room tidied and leave mom alone" actually does work.
6 million smart, rational engineers, mathematicians, actuaries, professors in the country, each doing this analysis, four times a year, yields 240 million dollars in surcharges without an ounce of laziness.
Then add laziness on top.
Is it only $10 extra to have dinner for 4 delivered? IME the cost was much more than that, when you factor in the difference in menu price, the delivery fee, the tip, and the govt surcharges.
Fair! But $10 establishes a lower bound on a rational audience's TAM at a quarter billion a year. If it's higher, the TAM goes up without requiring loss of rationality / non-laziness of the customer base.
Chase Sapphire Reserve would net that out to approximately $0 on a monthly basis after credits and rebates.
3 replies →
>Of all the options for "use money to make this go away so I can focus on the problem" paying $10 surcharge for doordash is by far the cheapest.
Exactly this. They know humans will likely pick the path of least resistance. And we are generally bad at problems that have compounding long term outcomes. They are essentially preying on our societal circumstances. My story: Brain will resist using energy for creative solution from within if external solution exists for $.
My example is _not_ preying. That $10 does nothing to help our lives if invested in diversified etfs, for example. The _best_ use of that $10 is to alleviate the instantaneous stressors for 4-5 people all at once so we can relax and solve larger problems (my spouse works for pro-social non-profits, for example).
Yes, doordash can prey on laziness, and people will fall into laziness, but in my example the _availability_ of the service is providing a price-adjustment for urgency that matches my own rational prioritization of the evening's needs. It's the most rational, mutually-beneficial argument I can make, and it's real in my house from time to time.
This is a question that's going to sound stupid and maybe insensitive, but that aside - how do you think people managed to do this in your exact same scenario for the last 50+ years without having a service like this?
Our own parents went through this exact scenario that you mentioned plenty of times before any of this even existed without having the to pay the $10 fee.
Pizza delivery has been a thing for the last 50 years. And in my own childhood, my parents kept tv dinners and other instant sodium-bombs like easy mac or ramen on hand.
Doordash costs more than that, but chipotle is a good deal more nutritious than the 90's-era tv dinners I remember, so I can understand parents preferring to spend a bit more for that equally-easy solution.
You're getting stones thrown at you when you were trying to be polite.
From my memory we often piled into the car, got dinner, and went home and my parents had to stay up late to clean while we went to bed.
In my wife's memory, one parent couldn't work - all this stuff had to fall on them.
I'm saying the $10 is a nicety, not a necessity. We would be ok without it. I just think we're a little better with it. It's a market system - if I need it, it's there at a price I can justify. Markets are a good thing.
50 years ago most households did not have both parents working full time.
The usual answer to this question: "things were shitty in the past"
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People also used to live in caves and wipe their ass with sticks.
What is this question? Is the idea of new products, technology, or services strange and problematic to you? Convenience is a major driver of invention.
Also when I was growing up my parents would order delivery plenty - but the only option was pizza because the driver worked for the pizza joint. And yes, it’s true, their parents didn’t order delivery, but they also lived in crushing poverty of the Great Depression and could barely afford to feed their kids during every meal.
> I don't really understand how the personal economics for this work out for the majority of the population.
8.5% of American households have no car[1]. That isn't a strict majority, but if you can be charitably informal: paying for grocery deliveries is orders of magnitude cheaper than loan+insurance+maintenance for a car.
If you want to become car-less then the like of Instacart make that a realistic prospective (but Instacart specifically makes no sense because stores usually do it for free if you can tolerate next-day).
[1]: https://data.census.gov/table/ACSDT1Y2024.B08201
A lot of stores are contracting to dd or ic or whatever to provide those free delivery services.
I'll give an example of when I used a grocery delivery service two weeks ago.
I was landing from a flight and traveling home late on a Sunday. I also needed to go grocery shopping that night. I did not have a car at the airport, so my choices were either rideshare home for $70, or take the train for $10. The train takes about 30-40 minutes longer, but saves me $60.
If I did the rideshare, I could probably do the grocery shopping myself and get home a little bit later than when the train would get me home. Or I could take the train, order the grocery delivery, and then get home, unpack, and go to sleep. I chose to take the train and do grocery delivery. When I got home from the train, the delivery driver was walking up to my door with bags in hand. It worked out perfectly.
I could have taken the train and also done the grocery shopping myself, but it would have been very late by then and I had to be up early for work the next day.
The majority of the population isn't using Doordash. A small portion of the population uses Doordash a lot. Think of all the college students who lack a kitchen and can't drive anywhere because they are drunk.
if you look at instacart's business model...they make barely any money on delivery. Vast majority of their profit is from advertising that they sell to brands. They create an audience of buyers with really good data and then monetize through advertising...so for the consumer you get very low cost delivery at the expense of seeing promoted products in the app.
The baseline premise that it’s more expensive is wrong. It can be as it’s a very big marketplace. But your entire stance is based on this static absolute that the cost is premium and that’s a wrong assumption.
> But the reality is I'd wager that for probably 99% of the population, this is actually not true and the economics doesn't work out favorably after accounting for all the fees.
> So then, all that is really left is convenience.
But nearly all technology and services you pay for arguably boil down to “convenience,” in the sense that people in the past either did the thing themselves or survived without it.
>Sometimes the time it takes for an order to land on your doorstep is longer than it would have taken for you to drive to the store and pick it up yourself.
This misses the point. One is you devoting your own time and attention to doing the task, the other is delegating it so you can use your time for other things. Some people are going to burn the extra time scrolling (not great), others are going to help their kids with homework or get a workout in.
I'm all for people getting time back even with the downside that not everybody will choose to use it well. If people are choosing brainrot over living well, there's a bigger issue than delivery services.
"Often times the time it takes for an order to land on your doorstep is meaningfully longer than it would have taken for you to drive to the store and pick it up yourself."
I don't think there are many people using this because they think they get it faster.
One man's laziness is another man's leisure time. I'd much rather have an extra hour to spend with my kids, read a book, exercise, or really do just about anything else, versus get in my car and fight traffic and parking to go retrieve a bag of food.
Prefacing this by saying it may sound insensitive but from my experience shopping and getting things to eat used to be things people would do with their children and was part of growing up and learning what adults do.
In my opinion this scenario may actually end up promoting unhealthy habits for your children which is what these companies want.
Sure, but how many times do they have to do this to learn?
If I take my kid grocery shopping 4-5 times a month versus three times a month and then ordering DoorDash the other two times is that really going to make a difference?
In fact, ordering DoorDash will also teach your kid how to value time. Especially if you spend it with them doing other things.
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