Literally No One is Profiting

MHR

Well-Known Member
Moderator

So by now you’ve most likely heard that delivery apps like Grubhub, Door Dash, and Uber Eats are potentially harmful to restaurants, as evidenced by some of the most exciting dystopian developments in the food world. These delivery services take up to 30% of every order, often wiping out a restaurant’s profits entirely, or worse, driving it into the red. Delivery drivers are members of the gig economy, competing with other delivery people to grab as many orders as they can, and making a pittance for it.

So if restaurants are losing money, and drivers are making pennies, then it must be those third-party services themselves that are drowning in quarantine cash, right? Well, PBS NewsHour decided to get to the bottom of things, and you’ll never believe what they discovered...


If you were only able to make it through the first half of the above video before throwing your phone at the wall, the second half explains why this is all happening: For a number of years now, interest rates have been historically low (and were slashed again in March to a record 0%), which means those with large amounts of cash became desperate for a way to gain higher returns. Venture capitalists, hedge funds, and all sorts of other high-stakes gamblers began throwing around large sums of money and investing in whatever they could, praying for huge outcomes. This is how the modern world ended up withcompanies like Theranos, Juicero, and a glut of third-party delivery systems,which, according to Investment Management Associates CEO Vitaliy Katsenelson, “are still trying to figure out how to make money off of this.”

So what can we expect in the future? Some investors predict that the industry will consolidate into only one or two companies, and once most of the competition is eliminated, fees and commissions can be raised. (On June 10, Dutch company Just Eat Takeaway acquired Grubhub for $7.3 billion; Grubhub itself merged with Seamless in 2013 and since its founding has acquired Foodlers, OrderUp, Eat24, AllMenus, DiningIn, Restaurants on the Run, Delivered Dish, LABite, LevelUp, and Tapingo.)

Others believe that in the wake of the coronavirus pandemic, third-party delivery apps will be the final nail in the coffin for restaurants. Then, right before all the restaurants close and the drivers lose their low-paying jobs, investors will cash out, and then the third-party delivery services will also go out of business.

TL;DR
restaurants are losing money,
the drivers are losing money,
and the companies are collectively losing billions of dollars with an unprofitable business model.
 

sellkatsell44

Well-Known Member
I don’t quite agree. As much as pple hate (and some love) Travis on here he’s into something with the ghost kitchen or the cloud kitchen.

Restaurants are a beast to deal with. When I was a business banker, I’ve heard the first two year makes or breaks.

ive seen some restaurants that folks would think is successful (I mean think bacon) and it’s not. They’re consistently needing to meet payroll, cash strapped, etc.

I’ve also seen restaurants that you think is just in the hole spots carry $$$$ in cash. All to expand on yet another location. But it’s very hard work.

there’s a Chinese restaurant that has a full restaurant but only 2-3 tables are ever filled. I’d say 90-95% of their business is take out.

restaurants, the experience of dining won’t go entirely away. ESP brunch spots or places like Gary danko (I didn’t realize I dropped a napkin (like that cloth one not disposable) till someone tapped me on the shoulder with a new one).

however people are liking (aka me) the convenience of ordering. I could order a pizza and between the two of us, takes a couple of days. If I order one for myself, it’s 4 days easily worth of food. And the cost of it plus tip and taxes spread over that many days isn’t so bad esp if I don’t use utensils (so no washing/water/etc) it’s pretty budget friendly. At least for me.
 

ANT 7

Well-Known Member
Ponzi schemes like Softbank are the biggest problem. Wall Street is #2.

That is why these companies exist without profits. Screw the retail and pension fund pooch with the IPO and laugh all the way to the Caymans with your vig, or wherever the banksters hide their proceeds of crime nowadays.
 

mbd

Well-Known Member
VC’s invest, job is to take it public or private buyout. If it goes public , they have the pension fund swindlers hold the stock for them until they unload them. Robinhood vegan boys also playing the revolving door game. If it goes private , VC’s already know the companies that will buy them out.
 

Johnny Mnemonic

Well-Known Member

So by now you’ve most likely heard that delivery apps like Grubhub, Door Dash, and Uber Eats are potentially harmful to restaurants, as evidenced by some of the most exciting dystopian developments in the food world. These delivery services take up to 30% of every order, often wiping out a restaurant’s profits entirely, or worse, driving it into the red. Delivery drivers are members of the gig economy, competing with other delivery people to grab as many orders as they can, and making a pittance for it.

So if restaurants are losing money, and drivers are making pennies, then it must be those third-party services themselves that are drowning in quarantine cash, right? Well, PBS NewsHour decided to get to the bottom of things, and you’ll never believe what they discovered...


If you were only able to make it through the first half of the above video before throwing your phone at the wall, the second half explains why this is all happening: For a number of years now, interest rates have been historically low (and were slashed again in March to a record 0%), which means those with large amounts of cash became desperate for a way to gain higher returns. Venture capitalists, hedge funds, and all sorts of other high-stakes gamblers began throwing around large sums of money and investing in whatever they could, praying for huge outcomes. This is how the modern world ended up withcompanies like Theranos, Juicero, and a glut of third-party delivery systems,which, according to Investment Management Associates CEO Vitaliy Katsenelson, “are still trying to figure out how to make money off of this.”

So what can we expect in the future? Some investors predict that the industry will consolidate into only one or two companies, and once most of the competition is eliminated, fees and commissions can be raised. (On June 10, Dutch company Just Eat Takeaway acquired Grubhub for $7.3 billion; Grubhub itself merged with Seamless in 2013 and since its founding has acquired Foodlers, OrderUp, Eat24, AllMenus, DiningIn, Restaurants on the Run, Delivered Dish, LABite, LevelUp, and Tapingo.)

Others believe that in the wake of the coronavirus pandemic, third-party delivery apps will be the final nail in the coffin for restaurants. Then, right before all the restaurants close and the drivers lose their low-paying jobs, investors will cash out, and then the third-party delivery services will also go out of business.

TL;DR
restaurants are losing money,
the drivers are losing money,
and the companies are collectively losing billions of dollars with an unprofitable business model.
It's not until the tide goes out that you can see who's swimming naked.

Whole thing reminds me of PeaPod and the rest of the dotcom turds that got flushed down the toilet.
 

tohunt4me

Well-Known Member

So by now you’ve most likely heard that delivery apps like Grubhub, Door Dash, and Uber Eats are potentially harmful to restaurants, as evidenced by some of the most exciting dystopian developments in the food world. These delivery services take up to 30% of every order, often wiping out a restaurant’s profits entirely, or worse, driving it into the red. Delivery drivers are members of the gig economy, competing with other delivery people to grab as many orders as they can, and making a pittance for it.

So if restaurants are losing money, and drivers are making pennies, then it must be those third-party services themselves that are drowning in quarantine cash, right? Well, PBS NewsHour decided to get to the bottom of things, and you’ll never believe what they discovered...


If you were only able to make it through the first half of the above video before throwing your phone at the wall, the second half explains why this is all happening: For a number of years now, interest rates have been historically low (and were slashed again in March to a record 0%), which means those with large amounts of cash became desperate for a way to gain higher returns. Venture capitalists, hedge funds, and all sorts of other high-stakes gamblers began throwing around large sums of money and investing in whatever they could, praying for huge outcomes. This is how the modern world ended up withcompanies like Theranos, Juicero, and a glut of third-party delivery systems,which, according to Investment Management Associates CEO Vitaliy Katsenelson, “are still trying to figure out how to make money off of this.”

So what can we expect in the future? Some investors predict that the industry will consolidate into only one or two companies, and once most of the competition is eliminated, fees and commissions can be raised. (On June 10, Dutch company Just Eat Takeaway acquired Grubhub for $7.3 billion; Grubhub itself merged with Seamless in 2013 and since its founding has acquired Foodlers, OrderUp, Eat24, AllMenus, DiningIn, Restaurants on the Run, Delivered Dish, LABite, LevelUp, and Tapingo.)

Others believe that in the wake of the coronavirus pandemic, third-party delivery apps will be the final nail in the coffin for restaurants. Then, right before all the restaurants close and the drivers lose their low-paying jobs, investors will cash out, and then the third-party delivery services will also go out of business.

TL;DR
restaurants are losing money,
the drivers are losing money,
and the companies are collectively losing billions of dollars with an unprofitable business model.
REDISTRIBUTION OF WEALTH
 

mrpjfresh

Well-Known Member
Well, at least the curtain is finally being pulled back en masse. I've been reading on here for years posters telling people to enjoy it all while it lasts - the dirt cheap rides in nice cars and cheap deliveries with a full refund if you get 4 ketchup packets with your order instead of the 5 you wanted. Anyone with even a modicum of knowledge of these companies know the status quo is simply unsustainable.

And all the workers of these gig companies left like Mayo in An Officer and a Gentleman...
FineEnlightenedBird-max-1mb.gif

(* Spoiler alert: these drivers will find something else)
 

DriverMark

Well-Known Member
Although 30% sounds pretty high, it's probably sixes if they had to higher employees as delivery drivers. Employees are expensive.

The apps probably the losers as they just refund $$$ left and right. Yesterday I had two orders. 2nd was a smoothie shop, with a tasty bowl + 3 smoothies. I mistakenly put the delivery bag from my 1st delivery over the bowl for my 2nd. Delivered their 3 smoothies but missed the bowl. Found it an hour later! Sure they get a full refund instead of just a refund for the bowl. Meanwhile, I got a nice lunch.

Month or so ago, had a $60 Papa John's order. The customer address wasn't correct. People at the address didn't order anything! I had already swiped delivered, so had no way of getting a hold of the customer. I called Eats support. No clue if the foreign rep knew what I was saying, and in the end told me to move on to my next delivery and dispose of the food. By "dispose", I took that as eat it. Ate pizza for a week. Oh, and I still made $10 on the delivery and a $5 tip (shrug).

Week ago, had a Burger King delivery. The app, or customer, or something, duplicated the order! UE sent both deliveries to me, the 2nd one while I was actually in the Burger King waiting on the 1st one. Exact orders. Exact food. Exact cost. I took both, and talked to the lady. She didn't know and didn't want the 2nd order. I got 2 whoppers, 2 fries, 2 drinks, 2 delivery pays, and 2 tips. Made $20 off that plus dinner.

So, I know I'm not the looser on the delivery side. I think it's most likely the apps that end up eating mistakes.
 

2Cents

Well-Known Member
Although 30% sounds pretty high, it's probably sixes if they had to higher employees as delivery drivers. Employees are expensive.

The apps probably the losers as they just refund $$$ left and right. Yesterday I had two orders. 2nd was a smoothie shop, with a tasty bowl + 3 smoothies. I mistakenly put the delivery bag from my 1st delivery over the bowl for my 2nd. Delivered their 3 smoothies but missed the bowl. Found it an hour later! Sure they get a full refund instead of just a refund for the bowl. Meanwhile, I got a nice lunch.

Month or so ago, had a $60 Papa John's order. The customer address wasn't correct. People at the address didn't order anything! I had already swiped delivered, so had no way of getting a hold of the customer. I called Eats support. No clue if the foreign rep knew what I was saying, and in the end told me to move on to my next delivery and dispose of the food. By "dispose", I took that as eat it. Ate pizza for a week. Oh, and I still made $10 on the delivery and a $5 tip (shrug).

Week ago, had a Burger King delivery. The app, or customer, or something, duplicated the order! UE sent both deliveries to me, the 2nd one while I was actually in the Burger King waiting on the 1st one. Exact orders. Exact food. Exact cost. I took both, and talked to the lady. She didn't know and didn't want the 2nd order. I got 2 whoppers, 2 fries, 2 drinks, 2 delivery pays, and 2 tips. Made $20 off that plus dinner.

So, I know I'm not the looser on the delivery side. I think it's most likely the apps that end up eating mistakes.
Try they split the loss with the restaurant.
 

DriverMark

Well-Known Member
Far as profiting myself. I'm putting 1/3 the miles on my car over driving people around. Delivering though you aren't going to get those huge spikes in $$$ that you can driving people. Think surges, bonus, etc. But all thing considering, I'm doing decent delivering money wise.
 

SinTaxERROR

Well-Known Member
Although 30% sounds pretty high, it's probably sixes if they had to higher employees as delivery drivers. Employees are expensive.

The apps probably the losers as they just refund $$$ left and right. Yesterday I had two orders. 2nd was a smoothie shop, with a tasty bowl + 3 smoothies. I mistakenly put the delivery bag from my 1st delivery over the bowl for my 2nd. Delivered their 3 smoothies but missed the bowl. Found it an hour later! Sure they get a full refund instead of just a refund for the bowl. Meanwhile, I got a nice lunch.

Month or so ago, had a $60 Papa John's order. The customer address wasn't correct. People at the address didn't order anything! I had already swiped delivered, so had no way of getting a hold of the customer. I called Eats support. No clue if the foreign rep knew what I was saying, and in the end told me to move on to my next delivery and dispose of the food. By "dispose", I took that as eat it. Ate pizza for a week. Oh, and I still made $10 on the delivery and a $5 tip (shrug).

Week ago, had a Burger King delivery. The app, or customer, or something, duplicated the order! UE sent both deliveries to me, the 2nd one while I was actually in the Burger King waiting on the 1st one. Exact orders. Exact food. Exact cost. I took both, and talked to the lady. She didn't know and didn't want the 2nd order. I got 2 whoppers, 2 fries, 2 drinks, 2 delivery pays, and 2 tips. Made $20 off that plus dinner.

So, I know I'm not the looser on the delivery side. I think it's most likely the apps that end up eating mistakes.
How much weight have you gained doing UE? :roflmao:
 

The Gift of Fish

Well-Known Member
Restaurant's were not forced to use delivery apps. If they couldn't run the numbers and figure out they would be losing money then they shouldn't be in business. It is no different than a driver saying he is losing money yet still continues to drive.
Right. If the service is inefficient or a ripoff, and the delivery business is viable, then somebody else will be along to build a better mouse trap.

At the moment, though, food delivery apps show the signs of, like rideshare, being an investor-funded cash incineration machine with no viable path to profitability.
 

Fuzzyelvis

Well-Known Member
Although 30% sounds pretty high, it's probably sixes if they had to higher employees as delivery drivers. Employees are expensive.

The apps probably the losers as they just refund $$$ left and right. Yesterday I had two orders. 2nd was a smoothie shop, with a tasty bowl + 3 smoothies. I mistakenly put the delivery bag from my 1st delivery over the bowl for my 2nd. Delivered their 3 smoothies but missed the bowl. Found it an hour later! Sure they get a full refund instead of just a refund for the bowl. Meanwhile, I got a nice lunch.

Month or so ago, had a $60 Papa John's order. The customer address wasn't correct. People at the address didn't order anything! I had already swiped delivered, so had no way of getting a hold of the customer. I called Eats support. No clue if the foreign rep knew what I was saying, and in the end told me to move on to my next delivery and dispose of the food. By "dispose", I took that as eat it. Ate pizza for a week. Oh, and I still made $10 on the delivery and a $5 tip (shrug).

Week ago, had a Burger King delivery. The app, or customer, or something, duplicated the order! UE sent both deliveries to me, the 2nd one while I was actually in the Burger King waiting on the 1st one. Exact orders. Exact food. Exact cost. I took both, and talked to the lady. She didn't know and didn't want the 2nd order. I got 2 whoppers, 2 fries, 2 drinks, 2 delivery pays, and 2 tips. Made $20 off that plus dinner.

So, I know I'm not the looser on the delivery side. I think it's most likely the apps that end up eating mistakes.
Drivers are not expensive. Pay them less than minimum wage, less than a dollar per delivery, and let them make it up in tips. Charge the customer a delivery charge, enough to cover most of that.

That's what Dominos does. Their delivery charge is getting high ($4 where I am) but customers pay it and still tip way better than Ubereats.

Drivers get minimum wage while not dispatched, less while on delivery. Raises just close that gap.

Restaurants that have not traditionally done delivery didn't because they made more money in house (especially alcohol) and only started doing it because they felt they had to to compete. now that everybody is getting so used to ordering from restaurants for delivery and in a lot of places they can even order alcohol it's entirely possible that restaurants could also set up their own delivery service with their own drivers and have it be worth it.

Unfortunately at this point the apps have taken control of it and it's hard for a restaurant to get anyone to call them directly.

Basically the whole gig, app, pay somebody else to handle deliveries does not work for anybody but the CEO of the app company who disappears with his billions.

If all the app companies went out of business tomorrow the restaurants would probably set up their own delivery and move into that phase and it would work for many of them.
 
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