Food Delivery App: nobody wins
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@Mik said in Food Delivery App: nobody wins:
I've not used them since the lockdown started, but then we have eaten very, very little restaurant food. I have no issue with paying about 10% for the delivery, plus tip. How the restaurant and DoorDash hash out their arrangement is not my concern.
And that model worked great at high volume. What people fail to realize is that restaurants can’t cut enough costs to earn the same margin on each order and therefore can no longer subsidize the true delivery costs.
You didn’t hear restaurants bitching before coronavirus. I don’t blame them but at the end of the day each order costs a lot more when the fixed costs are spread over fewer orders.
A little ECON 101 would help a lot of people understand why the lockdown is about to take a lot of companies down soon. The naïveté of thinking Congress can print enough money to save everyone is, well, breathtaking.
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Some have raised their prices to cover the overhead, even as much as 50%. I have no issue with that either. They have to have a business model that works. Ultimately it comes down to each business owner finding the model that gets them through. There isn't anything we can do.
"My pronouns are FA/FO." - Mik, 2024
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@Mik said in Food Delivery App: nobody wins:
Some have raised their prices to cover the overhead, even as much as 50%. I have no issue with that either. They have to have a business model that works. Ultimately it comes down to each business owner finding the model that gets them through. There isn't anything we can do.
Here's the thing, Restaurants have always been a high-risk low reward business. Even in the best of times, many restaurants fail. Recently, many of these places have relied on volume. Those days are gone. So the restaurants are going to have to adjust or die. I personally have little interest in writing laws and civil codes to protect an industry instead of letting the market do it's job and force the necessary corrections.
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The Economist had a good take on delivery economics last year
https://www.economist.com/business/2019/08/01/the-foodoo-economics-of-meal-delivery
TLDR - they’re abysmal. Lots of folks chasing the same pie. The name of the game is all VC cash right now. But the end game requires pricing power and jacking up the price.
Restaurant prices are pretty inelastic - current situation non-withstanding.
Even when on an expense account - I would hesitate sometimes when a burrito with guac and tip rang up $30.
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Xenon - I’ve seen that movie before.
https://www.tapatalk.com/groups/the_new_coffee_room/viewtopic.php?p=1026984#p1026984
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@jon-nyc Tell me about it. That was one of the things I consoled myself with when it came to cost-of-living back in SF.
Tons of products and services were subsidized by VCs.
In-restaurant dinner subscriptions, Downtown valet parking services, ride-share competitors, etc...
Keep an eye out for early stage companies getting early stage funding rounds. Profit off their inevitable Bag Area trials to build scale.
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This one was my favorite. Luxe parking. I had very variable parking demand because I didn’t have my own car.
https://www.google.com/amp/s/mobile.reuters.com/article/amp/idUSKCN1BN134
I think they got something like $60M before they figured out you can’t charge $50 bucks for something that normally goes for $500
