| ▲ | _trampeltier 10 hours 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... |
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| ▲ | mhink 9 hours ago | parent | next [-] |
| Note: the Verge article links to this blog post, describing the situation in more detail: https://www.readmargins.com/p/doordash-and-pizza-arbitrage |
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| ▲ | sprinkly-dust 8 hours ago | parent | next [-] | | Thank you, this was a fun rabbit hole to dive down. That blog also has a well-argued article about Zero Interest Rate Policy which relates to the doordash story: https://www.readmargins.com/p/zirp-explains-the-world | |
| ▲ | ryanjshaw 6 hours ago | parent | prev [-] | | 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. | | |
| ▲ | mattmaroon 3 hours ago | parent | next [-] | | 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. | | |
| ▲ | bruce511 an hour ago | parent [-] | | No, he means recycling the boxes not the pizza inside the box. The pizza itself can be literally given away (although if not on the premises, then presumably a box would be required.) |
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| ▲ | 3 hours ago | parent | prev | next [-] | | [deleted] | |
| ▲ | akoboldfrying 3 hours ago | parent | prev [-] | | Junkfoodconomists term this "the velocity of pizza". |
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| ▲ | rhplus an hour ago | parent | prev | next [-] |
| Ha! It’s the trick Richard used in Silicon Valley season 5 episode 1 (2 years before the blog post) to bankrupt “SliceLine” and buy out their devs. https://en.wikipedia.org/wiki/Silicon_Valley_season_5 |
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| ▲ | caminanteblanco 9 hours ago | parent | prev | next [-] |
| Thanks for sharing, i enjoyed reading it, although it is paywalled: http://archive.today/H5FRo |
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| ▲ | wizzwizz4 9 hours ago | parent | prev [-] |
| 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. |
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| ▲ | mattmaroon 3 hours ago | parent | next [-] | | 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.) | | |
| ▲ | horsawlarway 2 hours ago | parent | next [-] | | 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. | |
| ▲ | BobbyTables2 2 hours ago | parent | prev [-] | | 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. | | |
| ▲ | drnick1 18 minutes ago | parent [-] | | > Tipped generously. You shouldn't tip delivery drivers, it's literally their job. | | |
| ▲ | gaudystead a minute ago | parent [-] | | While I would love to agree with you, in America restaurants of all sizes (and personal transportation companies) seemingly often rely on tips from customers to supplement the wages of their workers instead of just paying them fairly. |
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| ▲ | PaulDavisThe1st 8 hours ago | parent | prev | next [-] | | > 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". | | |
| ▲ | wizzwizz4 6 hours ago | parent [-] | | 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. | | |
| ▲ | pdonis 3 hours ago | parent [-] | | > for something like the local pizza place, customer behaviour doesn't match that of a market participant. I'm not sure why you think that. "Market participant" doesn't mean "always takes the lowest priced deal". People are willing to pay higher prices for food from local restaurants, as opposed to chains, fast food, etc., because they feel that the extra value they are getting (better quality, knowing the people who make the food, the atmosphere of the restaurant, etc.) is worth it. That's a free market. What is not a free market is large corporations who get all kinds of government favors to prop them up coming in and taking advantage of arbitrage opportunities that the locals don't have the time or the energy to protect against--still more if such opportunities involve "marketing" the locals' products in ways the locals didn't agree to, and would not agree to if they were given the opportunity to make a choice. I completely agree with you that such things should be shut down. |
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| ▲ | supertrope 9 hours ago | parent | prev [-] | | VC Fund My Life! | | |
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