The author is a friend and was the original marketing director for the hosting company LiquidWeb. He' a superb marketer and I suspect this article grew out of his frustrations dealing with this problem.
I don't think the average restaurant owner who may not be very digitally savvy realizes how these companies piggyback on top of their brand. I predict that soon there will be a large class action lawsuit with thousands of restaurants going after the delivery services for these underhanded tactics.
Exactly, but I'm not sure about the class action lawsuit part. The contract probably forbids it and since it's B2B I bet those types of provisions stick.
The most frustrating part is that these types of situations are tough to avoid and we're starting to see them everywhere. Ex: DoorDash has a huge marketing budget / money to burn when starting up, so the early adopters see great returns because someone else is paying for a bunch of advertising for them. They tell their friends and slowly the system grows to a critical mass where you're losing out if you're not on it. Then they abuse their market position and do stuff like this.
You see it everywhere; Google, Amazon, Microsoft, app stores, adhesive terms of service, etc.. It's happening in the software development industry right now and no one's paying attention. Tons of services like SaaS Git, Saas CI, SaaS dev environments (Codespaces), templated SaaS deployment targets, etc.. The early adopters are seeing gains in efficiency, so they're out there advocating the use of all these subsidized services, but no one is considering what's going to happen in 5 years when the ownable workflow is neglected and the SaaS workflow is the only practical option.
There is a huge difference between SaaS and marketplaces. The latter is very prone to creating monopolies or oligopolies, but the former not so much.
About the developer tools you mentioned, take for an example the CI service. It is relatively easy to switch to a new one. I have used Codeship and Circle CI in the past but have switched to Google Cloud Build since it ia cheaper for my use case with Docker containers.
That was an insightful comment, pointing out a pattern.
- [A SaaS startup or established platform] has a huge marketing budget / money to burn when starting up.
- Early adopters see great returns because someone else is paying for a bunch of advertising for them.
- They tell their friends and slowly the system grows to a critical mass where you're losing out if you're not on it.
- Then they abuse their market position and do stuff like this.
To put a name to this trend, to call them "subsidized services", makes it clear to recognize how much of business/software/web ecosystem is getting consumed by the strategy.
>I don't think the average restaurant owner who may not be very digitally savvy realizes how these companies piggyback on top of their brand. I predict that soon there will be a large class action lawsuit with thousands of restaurants going after the delivery services for these underhanded tactics.
It's honestly gotten pretty bad. I almost can't find most independent restaurants' web presences anymore because Yelp, Caviar, Google's page, Doordash, et. al. all outcompete them on SEO for their own brands. And that's AFTER the paid ads those same sites manage to take out.
Most of the time, I end up using restaurant menus listed on UberEats or Doordash instead of their own websites before I call them for a delivery because it's just impossible to find their websites. It's especially bad with things like Chinese or Thai restaurants since so many of their names are variations on a handful of motifs. So you might be looking for the Peking Garden across the street, but you're just as likely to get Peking Gardens in cities all over the country, none of which are affiliated with each other. But the Yelp or Doordash hit is always the one right by you.
It's unfair. I want restauranteurs to be good at restauranting. The line between their success or failure shouldn't rely on their ability to outsmart expert SEO hustlers. It basically winds up being a shakedown that adds no value to the customer or the restaurant.
> "Most of the time, I end up using restaurant menus listed on UberEats or Doordash instead of their own websites before I call them for a delivery because it's just impossible to find their websites."
The trick is to look them up on Google Maps using their address/location and usually their website is directly attached to their map entry.
> It's unfair. I want restauranteurs to be good at restauranting.
Restaurants have to pay an arm and leg (often around 1/3 of revenue) for prime real-estate; or pay higher wage in more prosperous places.... is it fair?
In the end, restauranteurs who are good at this business will thrive and those who are not good at it will falter. Google/Yelp/DoorDash just provides additional dimensions for restaurants to compete in. And as always, when new technologies emerge, there are winners and losers.
In this wave of change to restaurant industry, the winners are actually smaller restaurants at cheap locations who are previously invisible to most potential customers but now are on equal footing with restaurants at prime locations in terms of exposure. And in the long term, it'll shift restaurants' expense breakdown, and those who pay too much rent will struggle because they don't have the budget to pay for online exposures.
It doesn't mean the restaurants paying less rent will be more profitable, the money simply goes from landlords to tech companies. And as long as restaurant industry is a fiercely competitive market, profit margins will remain low.
>In the end, restauranteurs who are good at this business will thrive and those who are not good at it will falter.
If the differentiating factor between success or failure is SEO rather than location, quality of food, or service I have trouble seeing how that's a net benefit for anyone but Google. Maybe "fair" was the wrong term. It's encouraging maladaptive behaviors in the industry.
Why is location a net benefit for anyone but the landlords? SEO is essentially just your digital location. It makes your restaurant easy to find and navigate to, in the same way that a good location makes your restaurant easy to get to (and maybe park).
Yes, expensive walkable commerce centers will have reduced relevance, as fewer sales come from walk-in customers. Speaking as someone who took over a failing restaurant at a hippy commerce center, only to close it down after realizing the walk-in traffic is going down while rent is not.
As long as people desire such physical congregated commercial areas, they won't go away. But I'm not confident that people really want them, based on how they vote with their wallet and time.
There is a lesson here: no matter what it is that you are building marketing is going to be important. Sometimes more important than the actual product.
This is one of the reasons most of my websites have no ads on them. One of the problems is that people don't want to put their money where their mouth is.
I get feedback that I'm writing valuable and interesting independent content, but people don't promote my work by sharing it around and very few people kick money my way. When I complain about how I remain dirt poor and people on the internet expect writers to be de facto slave labor, I get told crap like "Get a real job."
Advertising is how much of the internet is funded. If you think it's a cancer, help fund things that aren't using advertising to deliver value. Vote with your checkbook, as they say.
> There is a lesson here: no matter what it is that you are building marketing is going to be important. Sometimes more important than the actual product.
Not if you're this guy [1], he went out of his way to ensure he got the worst reviews on Yelp from his clientele in order to defy the monopoly Yelp has over the Industry and its exploitative shakedowns.
The GM at my last restaurant hated having to pay and play by Yelp's reviews but since we were doing upwards of 20k+ days even during non-peak season on a consistent basis it was a marginal cost at the end of the day and 'a cost of doing business.'
Having been in-out of the Culinary Industry, jumping from tech and automotive in between, restaurants rarely have Marketing down and often relies on word-to-mouth practices.
Unless you're on something like Chef's table, or one of Bourdain's old shows, or get a Michelin star (or to a much lesser degree James Beard award) there is very little exposure outside of local magazines and who even bothers with food critics--if they're even around any more--outside of someone being a person with way too much time on their hands.
One of my colleagues/cooks went to NY on all expenses paid trip to see Blue Hill Farm, and got to be with Barber all weekend long. He said that Chef's Table was a life-line that pretty much put him on the map, because prior to that no one really paid attention outside of his local NY clientele.
One of my more loftier post-retirement goals was to see if I could make a few pilot episodes highlighting the local food scene within certain Tech hubs and eventually Digital Nomad cities all over the World and have dinner with a select few startups to see what they were about.
Having a hand in both Industries I thought I could capture things well, and I even drew up a list of cities I'd visit, starting with my own and a few in CA. COVID has put a damper on it all, but may be worth exploring now that there is a dire need to help and people seem more receptive to help out people in the Restaurant Industry as things are slowly starting to open up. Hopefully with a few EPs and a refined approach I could pitch to Netflix, Hulu, AppleTV et al... Honestly, I just want to be able to aspire to make something worth Zero Point Zero Prodcution's attention as they do brilliant cinematographic work.
At no cost, and in fact negative costs as it ended up not costing him anything for defying the Established cartel's Marketing costs, or how the owner put it: mafia's extortion.
The point being that Marketing is not always more important than the product and if you're brave enough to go against conventional wisdom it can be quite profitable as he saw a massive increase in business. But it is, albeit unconventional, Marketing in the end.
> I don't think the average restaurant owner who may not be very digitally savvy realizes how these companies piggyback on top of their brand. I predict that soon there will be a large class action lawsuit with thousands of restaurants going after the delivery services for these underhanded tactics.
This same thing happened to the hotel industry few years back, studying that would give us a good idea of how this is going to play out. I think restaurants are just going to have to adapt to the new reality.
> I predict that soon there will be a large class action lawsuit with thousands of restaurants going after the delivery services for these underhanded tactics.
On what basis? You can't just sue someone because you don't like them-you have to have some argument that they wronged you.
Trademark infringement seems like the obvious one. If your add says "Saddleback BBQ", but takes you to a simmiliar product from another provider, then that seems like a clear cut case of infringement.
The contract between grubhub and the restauraunt makes everything more complicated, as there is likely language relating to trademark use, so this might turn into more of a breach of contract suit.
Sure, but the author didn't claim that grubhub was doing that. The author claimed that the grubhub had an ad saying you could order "Saddleback bbq", which took you to an app where you could indeed order saddleback bbq (among other things). That seems to me to be a significantly different situation.
Please ask him the motivation for the floating Drift AI chat box. When I see one of those, I abandon the site. They only get in the way, add an extra layer of indirection to communication, and devalue the customer.
I have never once got a helpful response from any chatbot because they are only equipped with content already in the site anyway. Comcast is a model implementation of how utterly useless they are.
> DoorDash uses our brand name “Saddleback BBQ” right in the advertisement.
> Possibly the most maddening thing is that if a customer clicks on the link, it does NOT take them to a webpage to order from Saddleback BBQ. It takes the user to a general page to order BBQ from anyone that serves BBQ. At the top of the list? Applebees.
This is a particularly egregious sleight of hand. It's a relatively easy click-through to write for DoorDash, and it would result in the customer getting exactly what they were looking for (instantly looking at Saddleback's menu options and probably ordering). But DoorDash isn't content with delivering what they promised! The customer must perform a secondary search within DoorDash just to find that same restaurant again, because Saddleback is nowhere within sight on the page they've actually landed on. It's sneaky because it seems like incompetence, but the reality is that they've absolutely done it on purpose so they can double-dip one customer and display ads to them from restaurants that paid more to DoorDash.
> DoorDash uses our brand name “Saddleback BBQ” right in the advertisement.
> Possibly the most maddening thing is that if a customer clicks on the link, it does NOT take them to a webpage to order from Saddleback BBQ. It takes the user to a general page to order BBQ from anyone that serves BBQ. At the top of the list? Applebees.
Well isn't that plain fraud? (And no adding some * somewhere with a disclaimer doesn't make it not fraud. The point is that it intentionally misguides/tricks/manipulates the user with the intention of harming the given brand (by on-the-fly replacing it)).
EDIT(clarification): It's like going into a shop and asking for a specific samsung tv and the salesman goes and comes back with a philipps tv saying here is your tv, the price is .... Sure if you look clearly at it it's not the PC you asked for but if you are in a hurry or social insecure you might still end up buying it even through you didn't want to.
I dunno about fraud, but it certainly seems reasonable that it would be trademark infringement. The name "Saddleback BBQ" is Saddleback's trademark. If another company uses it to sell potential Saddleback customers (which these clearly are, since they searched for that name) products from a competitor, that seems like something a good trademark attorney would be interested in.
(The potential hitch here is that most restaurants are small businesses, and small businesses aren't great about doing things like registering their trademarks. But you can still build a claim even around an unregistered trademark under certain circumstances: https://www.nolo.com/legal-encyclopedia/what-good-unregister...)
I don't know, it doesn't seem that unreasonable to me. Walmart is allowed to advertise it sells Levi jeans, even though it sells other brands than Levi.
If doordash didn't sell Saddleback food, i'd agree, but given that doordash distributes Saddleback products, seems reasonable to me they are allowed to advertise "buy Saddleback bbq here"
A trademark doesn't mean no one can use your name. You would need to prove that customers are being misled to purchase BBQ from another company thinking they are getting it from Saddleback BBQ. You can call out competitors, you can create an ad that says "4 out of 5 doctors prefer our BBQ to Saddleback BBQ" (assuming you've got the data to back it up).
What these companies are doing is definitely misleading but I don't think anyone is accidentally purchasing from Applebees thinking they were getting Saddleback BBQ.
It would be like mentioning a popular brand on your website in order to get the search engine traffic for that brand, even though you don't sell it.
I think you may be overstating the legal standard. I believe the bar is “creates confusion in the marketplace” rather than “misleading”. A customer clicking a link for $Restaurant and being taken to a page of competing restaurants may or may not be misleading but I definitely think its confusing. Every consumer who clicks that link expects $Restaurant’s page or a page dedicated to $Restaurant and doesn’t get it.
You're right in your first para, wrong in the rest.
You can't lawfully squat a brands trademarks, neither in SERPs, domain names, nor in real world signposts.
You can use trademarks for comparison but having a signpost - virtual or actual - that has another brand on it is tortuous infringement. Bait and switch is rightly unlawful.
Hmm, I've been using "tortuous" as the adjective for tort for probably a couple of decades and you're the first person to try to correct me. Clearly I'm using what Wiktionary classes as usage that's obsolete.
Interestingly googling around the principle usage -- to mean pertaining to a tort -- of this spelling is in UK Terms of Use. It's quite hard to search though as often people will talk about tortuous caselaw [1], meaning 'twisting and turning'. Both usages can be in the same document, so Google Search - in particular - is no good here.
Spelling "tortuous": I find supporting documents from the UK Home Office [3], the UK IPO (including in court proceedings for trademark), and in private practice references to UK tort law, eg [2] dated 2019.
I don't consider my usage to be wrong per se but will consider using tortious in international forums (I so wanted to write "fora", lol); thanks for the query, terse as it was.
It's possible we're all using it "incorrectly" of course. I work in the IP sector, we might all be drinking from the same fountain (eg perhaps reading past UK caselaw keeps us archaic).
If "tortuous" didn't already have a completely different useful meaning, I wouldn't object. Calling harmful behavior "tortious" shouldn't be ambiguous. I'm not sure what happened in olden times, but over the last decade "tortuous" has dominated because of clueless spellcheck.
It's just a slight misspelling. It should be "tortious" instead of "tortuous" [1]. Interestingly, my spell checker does not recognize the former, but it does the latter.
> What these companies are doing is definitely misleading but I don't think anyone is accidentally purchasing from Applebees thinking they were getting Saddleback BBQ.
That is exactly what is happening. Say Saddleback isn't open on Tuesdays. Boom, that visitor now sees a long list of BBQ joints to order from that can still be delivered. Since they are in the mood for BBQ clearly, they are going to order from Uncle Bucks BBQ instead.
I _really_ hope this results in real litigation, because even just this one example of screenshots of the flow, it is egregious false advertising and trademark infringement.
This should be open & shut huge fines for DoorDash, damages paid to this restaurant (and many others), and enforcement to prevent it from happening again.
People working for these companies and facilitating this should be ashamed of their employer and either quit or vocally demand changes internally.
It would depend on the terms of service. If it clearly outlines their self-serving goals when spending "your" advertising dollars, then it seems it falls back to the owners for signing into such an agreement.
It must be really difficult out there for so many minimal margin businesses to make such Faustian bargains. Then again, I never really understood how Groupon was able to do it either. Is the "restaurant owner" marketplace really that unsophisticated, or is it so bespoke that it's incredibly difficult for any one owner to fully do their diligence?
I think a closer analogy is a shop hanging a poster out front saying "Buy Samsung TV's here!" When you ask the shop keeper about the sign, they take you to the TV section where there is a huge philipps tv display says that the TVs are in here.
DoorDash isn't telling you that Applebees is Saddleback BBQ, they are just not making it as easy as they could to help you find what you are looking for.
Strongly disagree. Clicking on the link for Saddleback BBQ is effectively saying "take me to their ordering page" and I don't see how you could reasonably expect otherwise.
Fraud is hard to prove because you have to prove intent, but this at best incompetence, almost assuredly false advertising, and pretty clearly fraud although good luck proving it in court.
FWIW the measure of trademark infringement is balance of probability, as it's civil law. So that would probably be the best way to combat it. Damages are probably less.
I don't get this thread. The link is marked as an ad. How is it even remotely surprising that an ad spoke that is misleading? Yes, they're doing something wrong here, but the thing they're doing wrong is also standard industry practice--take out ads on every remotely related keyword for your own site that may or may not sell the specific product listed in the ad.
This is confusing because it goes against everything the marketing folks in previous jobs were always pushing on our front end engineering and SEO efforts. I'm more suspicious of landing page incompetence then you.
Our directives were always: If the user has showed intent for a specific thing, tailor the landing page towards that thing as much as possible, and get out of their way. Don't let them forget they already made up their mind.
The DoorDash approach seems very backward. If I saw that landing page I'd be inclined to think "wow, these people don't actually have Saddleback, let me check somewhere else." I'm not gonna get Applebees after googling a different particular restaurant.
> Our directives were always: If the user has showed intent for a specific thing, tailor the landing page towards that thing as much as possible, and get out of their way. Don't let them forget they already made up their mind.
That's if you're trying to sell them the thing they showed interest in.
Door Dash et al aren't trying to sell you Saddleback Barbecue, they're trying to get you onto their platform so they can sell you to advertisers. What you're interested in is just a way for them to manipulate you onto their platform.
Yes, but per the above post, what tends to work best is if you present people with the shortest path to what they want, and with up sell/retention opportunities either in that path or in follow up after successful conversion.
I guarantee you that a custom landing page for these campaigns would work out better for them.
That makes sense if the consumer is DoorDash's _only_ customer.
If Applebees is paying for some sort of marketing/relevance service, then all bets are off, and it's up to DoorDash's leadership to choose which of their opposing customers get screwed.
An alternate phrasing might be "it's up to DoorDash's leadership to choose which of their customers they optimize for." Giving preferred treatment to partners that are strategic or have higher margins is not screwing your other customers.
I do have issues with the misuse of the restaurant brands -- seems unethical to send me to Pizza Hut when I click on Dominoes.
I think it's what you're pinpointing in your last sentence that's the "screwing your other customers" part here. I don't have a problem with the concept of preferred treatment, but to me, that would be "if I search for a given category, put the preferred partners in that category first in the search results," but -- as you say -- a click for a specific restaurant should probably take you to the DoorDash page for that restaurant. At the very least it should take you to a search page that puts that result at the top.
> An alternate phrasing might be "it's up to DoorDash's leadership to choose which of their customers they optimize for." Giving preferred treatment to partners that are strategic or have higher margins is not screwing your other customers.
You're polishing a turd. Call it whatever you want, but if I'd prefer not to be a customer of a company who prioritizes competing interests over me.
Every business prioritizes competing interests over each other, at varying times. Amazon might be the closest to prioritizing customers uber alles, but that hasn't been a popular result on this board of late. Can you name a few companies you think do a good job of not prioritizing other interests over you?
Amazon is a terrible example of prioritizing customers--what part of selling counterfeits, putting sponsored products higher in search results, or retroactively deleting books off your Kindle serves users?
More friction will lead to dropoff. And, for the platform, it should matter -- they will have different margins depending on the deal, different levels of support, likelihood for the restaurant to churn, ad spend, all kinds of things to balance.
Pushing the user into the "find a restaurant" model, after they want a specific one, gives the platform an opportunity to optimize for their needs. This may or may not be a positive for the customer, and it may or may not be enough of a lift for the platform to overcome the dropoff because of a poor landing page experience.
One misconception I see about conversion optimization is that it's generalizable. Google's blue button test doesn't matter to any product except that exact one. None of us can say, without seeing the results; our previous experience is not relevant.
EG, maybe a 10% conversion to order dropoff is OK if we can direct X% of users to an expensive restaurant. The 10% drop cost is offset by a 50% increase in order cost.
"Pushing the user into the "find a restaurant" model, after they want a specific one, gives the platform an opportunity to optimize for their needs. This may or may not be a positive for the customer, and it may or may not be enough of a lift for the platform to overcome the dropoff because of a poor landing page experience."
First, a custom landing page can both provide you with the restaurant and an option to search for more restaurants.
Secondly, if the goal was an optimized experience, why wouldn't they want that on their restaurant pages, even the ones that don't come in from search? There's a reason.
> One misconception I see about conversion optimization is that it's generalizable. One misconception I see about conversion optimization is that it's generalizable.
YMMV of course, but this one stretches credibility.
I don't think it stretches anything. The opposite -- that different websites, with interfaces that all vary subtly in a billion different ways, with different traffic sources, with different market positions, with different primary outcome goals -- are able to be compared? I would need to see quite a bit of specific evidence to believe that.
I've worked with brilliant conversion optimizers, in a single vertical niche where we had > 30 websites, each doing between 200K-2M visits/month. We would have loved to test + copy, but every time we ran this experiment, we found huge differences.
One subtle nuance is that "generalizable" needs to be more specific than "this change increased conversions". The true goal of optimization is not the find the B that beats A; it's to find the global optimum.
The Conversion industry tends to similar language as the complementary/alternative medicine space. "I did this thing, it had this outcome. I believe this happened because XYZ. It worked for me, it will work for you!" (People telling stories which may or may not be true.)
That is also why clinical trials for interventions is so important.
> The true goal of optimization is not the find the B that beats A; it's to find the global optimum.
FWIW, that's the goal of global optimization, a particual type of optimization, and one that rarely anybody on the market cares about wrt. business. Local optimization, "B beats A", is more frequently used, as usually all the business cares/can afford to care about is to find a C that beats B, if their competitors found the B that beats A.
Just because there are a billion possibilities with a billion traffic sources, different marketing positions, and you can do clinical trials and doesn't mean that providing someone the answer they expected and the possibility to search for other things beats just searching for things... which was what they were doing on the previous page.
If it was such a brilliant idea, DoorDash & GrubHub should change their sites so that links from their search results only take you back to their search page.
Not the best example since Dominos and Pizza Hut are both of equally terrible quality. If I searched for my favorite local pizza place and was sent to Pizza Hut, I would definitely go back. If I was searching for Dominos and got Pizza Hut, I'd probably assume Pizza Hut bought them out. I've had stuff like that happen before.
Of course it does. The most basic reason would be that since they take a percentage, door dash would prefer you purchase from a more expensive restaurant. But there are all kinds of other reasons, such as some restaurants spending more on advertising with the platform.
Data says otherwise - plenty of e-commerce sites taking you to search, with the thing you saw just pinned at the top. I hate the pattern but it seems to result in higher engagement.
> Data says otherwise - plenty of e-commerce sites taking you to search, with the thing you saw just pinned at the top. I hate the pattern but it seems to result in higher engagement.
That's extremely different than the thing described here: "take you to a category page with something else entirely pinned at the top."
I think the discussion around Facebook and Russia opened a lot of eyes to how ads-based businesses can be exploited, and how the infrastructure they built directly lends to this phenomenon.
And yet, people still continue to use Facebook/Google/etc en masse. These companies are in the news what seems like every week, but the number of people who have left those platforms is negligible.
Because we are not all using the same brain. Many people have many opinions, and some people even sometimes act counter to their preferences based on the context! Wild stuff.
Your original comment implies that folks "slowly noticing" dark patterns is going to make some sort of difference in the grand scheme of things. I am arguing, based on my experience with humans, that it will not—and even if it could, that not enough people are paying attention for it to matter.
I don't think that's true. Or rather maybe it's in some sense the intent of some of their marketing people, but it's not the way it works in practice.
DoorDash and Grubhub make the overwhelming bulk of their revenue from simple fees on the deliveries made. They surely sell ads (and para-ads like list placement), but the eyeball value of my one visit is vanishingly small relative to the $70 I just spent on takeout. The scales are just totally different.
If they're not showing you the restaurant you followed a link for, it's not because of advertising. It's likely because they don't have a contract with that restaurant and still want to sell you a meal.
Now, that's not ethical. But it's not because of "advertising".
In this specific example, the restaurant does have a contract with the delivery service and they're still re-directing customers.
Advertising, or trying to redirect to other restaurants paying higher commissions are the only possible explanation (aside from incompetence of course, but if you believe that I've got a bridge to sell you).
They're trying to maximize revenue by double-dipping. They want the $70 food order and another $X because you viewed some ads.
While I don't think DoorDash cares too much about the advertising revenue, per se, I think what's going on here is roughly this:
- You search for a specific BBQ restaurant on Google.
- You see an advertisement for that restaurant! But it's actually DoorDash.
- You click on that ad, and DoorDash initiates a location-based search for BBQ restaurants, putting their preferred partners at the top of the result list.
DoorDash is happy if you order from any restaurant through them, but they're even happier if you order from a restaurant that they get more money from.
> DoorDash is happy if you order from any restaurant through them, but they're even happier if you order from a restaurant that they get more money from.
Is that that what they prioritize over having a functional app for customers, merchants and drivers alike, and proper development deployment that doesn't incur large blackout periods?
This is either dynamic keyword insertion in the ad copy or they did target a specific restaurant name but decided to use a more generic landing page. In my previous life doing more marketing oriented activities in the travel space, we found that even if someone was looking for a very specific hotel, if you dropped them on that page, it converted at a lower rate than dropping them into a search page for hotels in that location and "pinning" that hotel to the top of the page. The reason is that people may be more open to other similar options than you think. So in the case of Doordash, perhaps they have found a similar thing which is that you might have said McDonald's but net net more people will buy if you show them McDonalds, Wendy's, Burger King, Jack-in-Box, etc.
Also, showing all of the options may actually create more net value for Doordash since you're letting the customer know you have a wide breadth of options and this may create more long term loyalty.
So if someone was searching for Hilton would you drop them on a page with Motel 6 pinned at the top if they paid you some money? With Hilton nowhere on the page?
That's what's being claimed in the original comment here.
That's what feels like incompetence (or, more likely, a "targeted landing pages" project that just hasn't been very prioritized).
Yes, it's most likely that the ad that's matching is the generic one for "Lansing, MI BBQ" or something to that effect and therefore it's not pointing to a specific landing page. It may also be that Doordash has found that individual restaurant keywords that point to specific restaurant pages are just not profitable.
With how poor delivery services coverage in my area is, if I look for Saddleback and don't find it soon, I'm probably uninstalling because they won't have anything else I'm looking for. Might install again next year to see if it's better.
I had this happen with Hotels.com where they presented an 800 number for a hotel -- the person answering the call presented himself as the Hotel's registration desk. The entire time they are telling me this and that corporate discount code isnt available. Until I asked some key question and realized they were a 3rd party trying to book you at top-rates.
I NEVER use Hotels.com for this reason, it is meant to extract as much as possible and take away the pricing power from the hotel.
I run quite a lot of Google search ads. To the tune of multiples of hundreds of thousands of dollars a month. There's a small distinction I want to make here.
It is not only allowed, but common, to bid on the name of a competitor. What you can not do is use their name in their ads. If I had to guess what's going on here is that at the scale DoorDash is at they're almost certainly utilizing dynamic keyword insertion where it grabs your search query and inserts it into your ad text. This is probably just an oversight honestly. I highly doubt there's some advertisers menacingly rubbing their hands together and cackling as they type in "saddleback bbq" into the ad copy. This is probably just an oversight on Google's part tbh.
"Ads may use the trademark in ad text if they meet the following requirements:
"Resellers: The ad's landing page is primarily dedicated to selling (or clearly facilitating the sale of) products or services, components, replacement parts, or compatible products or services corresponding to the trademark. The landing page must clearly provide a way to purchase the products or services or display commercial information about them, such as rates or prices."
If I were a delivery service, I would argue that my business operates as a reseller of the restaurant's offerings and that my use of the trademark is permitted per this clause of the policy.
It doesn't seem to me it meets the requirement of the landing page being relevant to the trademark and making it easy to purchase/view information: the ad takes you to a page that puts Applebee's front and center, and you have to search again for the restaurant.
Hopefully it's a violation and can be fixed on Google's side, since I find that to be the worst part of all this.
I suspect as part of being on door dash the businesses agree they can use their trademarks.
Door dash seem to be very good at getting large chains onboard, I wonder if this is part of it. Most small restaurants last less than a year, with this kind of strategy door dash can show large chains a nice dashboard every year of how much in sales they redirected from a small restaurant to their chain.
I agree, this seems to be an automated form of clickbait. It's not necessarily malicious, but an increase in the arms race for clicks and purchases. It's been like this on Youtube for years.
I do think this is something that Google could be smarter about mitigating. In the longer term picture, higher conversion rates advertisers will spend more on Google AdWords budgets, so an ad that drives right to the restaurant people wanted should be a net win.
I think the larger problem here is that DoorDash & GrubHub are better positioned to pay a higher customer acquisition cost (better capitalized, higher margin businesses long term, and also more drive to create brand awareness in this moment), since they can convert for people who want alternatives to whatever they searched for, and on top of that they can more easily justify investing in tuning their marketing campaigns. So from Google's perspective, it may be hard to perceive a strategic advantage of fixing this.
What is surprising to me is that investing in tuning their marketing campaigns hasn't resulted in developing custom landing pages for those campaigns that, for example, might put people on a page for the restaurant in question (maybe with a sidebar for "looking for alternatives?"). That'd no doubt improve effective CPA for their campaigns.
> so an ad that drives right to the restaurant people wanted should be a net win.
a system that generates the maximum amount of monetizable events without frustrating the user or advertiser towards other platforms is the 'net win' from the ad platfrom perspective
> But DoorDash isn't content with delivering what they promised!
This is one of the most depressing parts about working in tech for me. Basically no company is content with making a good product (for some definition of what that even means, that phrase itself is obviously subjective). Ideally a site/app is solving a real problem for their users, and they could make a simple, clear, and consistent interface that exposes that solution and trust the user to make the best use of it to address their need.
Unfortunately that never seems to be enough. Even for companies that I genuinely believe have good motives (trying to provide real value rather than trick people into buying snake oil), they also need to sell it. They track conversion metrics and then they need to optimize their flows, which inevitably makes things more complex and more obfuscated. Basically every PM or product-focused founder I've worked with is thinking about how to push the user to where they want them, rather than how to make things clear so the user can choose what they want to do. It's the behavioral economics idea of nudging run completely off the rails.
The thing is, it really works. So anybody not thinking this way is leaving money on the table by growing more slowly. And your competitors are doing this stuff too, so they'll eat your lunch if you're not good at growth, marketing, and optimizing conversions. It's similar to how I've never encountered a product person who takes the spirit of things like GDPR seriously. It's do or die and if you try to do things like respect users' privacy on principle instead of do everything you can to optimize conversions, you'll lose.
I've come to accept that there doesn't seem to be any way around it, this is the cost we pay for the tech products we use (and, contrary to perhaps a lot of others on HN, I do really believe that a lot of these services are genuinely useful in my life, and it's still worth it to me to use them despite this sad reality).
>This is one of the most depressing parts about working in tech for me. Basically no company is content with making a good product (for some definition of what that even means, that phrase itself is obviously subjective). Ideally a site/app is solving a real problem for their users, and they could make a simple, clear, and consistent interface that exposes that solution and trust the user to make the best use of it to address their need.
Your post nailed it. It's become positively disgraceful.
The only thing I would add, is that it's not just "tech" companies doing this. Every medium-large corporation is looking to squeeze more revenue out of existing customers no matter the moral implications, and no-matter whether it's good for the customer.
> The thing is, it really works. So anybody not thinking this way is leaving money on the table by growing more slowly.
Someone will inevitably come along and claim this is how capitalism works, survival of the fittest, ruthlessly efficient markets, and all of that. Which, of course, is entirely reasonable if that "assume a perfect sphere on a frictionless plane alongside a perfectly rational actor" model of economics actually existed in the real world. It doesn't.
At the risk of sounding like I am moralizing, which I am but not in a negative or peacocking way, this is why I work to optimize my choices deliberately against financial gain and towards things like my community, my environment, and my society. I buy from companies that, best I can tell, pay their workers reasonably and act responsibly. I have walked away from projects at my employer--and, once, threatened to leave my employer (along with several of my coworkers) if my group insisted on proceeding down a path that it, happily, abandoned. I deliberately don't own a car, order from delivery services, or shop at Wal-Mart.
Why? Because while individual actions make a very little impact, setting the example for those actions gives others both the courage and the cover to take them alongside me. I can't sit idly by and wait for "the group" to do something, even to my own financial detriment[0]. Make no mistake, I work in tech like a lot of us on HN--though I am not a software developer so perhaps not as well off as many but still doing fantastically well compared to the most--so I am coming at this from a position of privilege and have a very long way to fall before I hit bottom.
Most of us do, which is why it is incumbent upon us to make decisions not solely in pursuit of money and to translate that into our businesses and, frankly, if the shareholders don't like it then they can say so while I'm converting my corporate format to a SPC.
0 - "Detriment" here meaning that I'm spending slightly more than I "should" if I optimized output solely for cost and making slightly less than I "should" if I optimized input solely for gains.
For those arguing in favor of this madness, think of how you'd feel if you typed in google.com in to your web browser or clicked on a Google link or selected a Google bookmark and instead of taking you to the google.com website the browser took you to a list of websites with Duck Duck Go at the top.
You could switch the sites two around, or substitute any other web sites and have the same problem.
Or how about if you try to vote Democrat and instead of registering your vote you are shown a list of non-Democratic candidates with Republicans at the top? Or vice versa..
If you're in favor of the one, you should be in favor of the other.
To argue in favor of this is to argue for less consumer choice and power.
The article says DoorDash charges restaurants an advertising fee. I would assume that includes a contractual agreement that allows DoorDash to use restaurant trademarks in their advertising.
Doordash lists every restaurant they deem worthy of delivery in a particular area - the restaurant doesn't have to be part of a contractual agreement with them. They call this OTT (Over the Top) where the courier orders the food like a normal patron and gets the food to the customer.
In this case, it doesn't really sound like the owner of the restaurant was on the Doordash platform. The blog post doesn't seem to clearly indicate that they do. If they are not, I would think that there is an extremely strong legal case for copyright infringement, especially since Doordash is not even working to generate revenue for the restaurant, but redirecting you to a generic bbq restaurants page.
> Doordash lists every restaurant they deem worthy of delivery in a particular area - the restaurant doesn't have to be part of a contractual agreement with them.
Hm. If they're doing that, and using every restaurant's trademarked content in their ads without an agreement in place, I think that would be a problem legally.
> In this case, it doesn't really sound like the owner of the restaurant was on the Doordash platform. The blog post doesn't seem to clearly indicate that they do.
The post explicitly states that there is a contractual agreement:
"Our only recourse is to immediately terminate our contract with GrubHub and DoorDash, which we are considering doing."
> Hm. If they're doing that, and using every restaurant's trademarked content in their ads without an agreement in place, I think that would be a problem legally.
I'm not sure about that. How would non-authorized resellers work then? In the most absurd case, sellers on Ebay wouldn't be allowed to say what exactly they're selling. You would have to list something as "a watch" instead of "Casio G-Shock". Same goes for any used car lot, etc.
The primary cause here would be "trademark infringement", which requires "likelihood of confusion" in the marketplace [1]. Doordash isn't particularly causing confusion here. They do, in fact, sell Saddleback BBQ from Saddleback BBQ. The only source of confusion I can think of is that the link doesn't take you directly to Saddleback BBQ, but rather to a generic list of BBQ restaurants (which Saddleback BBQ is on).
> I don’t know how I feel about the ‘moral’ aspect of the practice
I'm not happy with it; their behavior is clearly not acting in good faith, even if on paper they have some contractual language that gives them a legal defense if challenged.
They can't, but most people don't know how to ask Google to take it down. Google makes the form challenging to find and implement. Without a rep it will also take a while.
I know when I try to use my competitors trademarks in my Google Adwords, Google rejects my ads every time. It's typical Google bullshit that DoorDash gets a free pass here.
It would not surprise me if "we can use your brand for advertising" is explicitly mentioned in the GrubHub/DoorDash contracts. I think the overall problem is that restaurants don't have much leverage; their main option is to refuse to cooperate.
Now the (gradually becoming less common) practice of auto-creating order pages for restaurants that didn't agree to be a partner, I would agree should be totally illegal, or at least needs a very large disclaimer that the restaurant is not involved.
I would guess the DoorDash contract that the restaurant signed explicitly gives DoorDash permission to do this. They even probably think it's a service, run Google ads for mom & pops so they don't have to.
The recourse is exactly what the author of the article is considering; cancel the DoorDash contract.
these vertically integrated proprietary institutions need to be broken up. they cause competition in the wrong way, by forcing restaurants to sign up for all of them, and juggle multiple, competing, non-compatible infrastructures. its a different kind of anti-trust that creates an arms race, the necessity to invest in all the oligopoly's participants or be left behind by those that do. its like a weird hostage situation, where multiple people can hold you hostage simultanious.y
the online menu needs to be separate from the pos that receives the order, the request for dispatch to the delivery driver should be another component, and the online marketing another, allowing the restaurant and delivery driver to mix and match. at a minimum the advertising+menu+order placement should be broken up from the on site order processing+delivery. And with regard to the roads, there shouldnt be a bitesquad, uber eats, grubhub, postmates, and doordash delivery driver waiting in the lobby at the same time all driving to the same neighborhood. theres obviously better ways to load balance and distribute the tasks, than by which company submitted the order.
Why not create your own Google ad for your restaurant and point it directly to your website. With doordash likely doing this for millions of restaurants, it can’t possibly cost more than a few cents per customer to outbid them.
> The customer must perform a secondary search within DoorDash just to find that same restaurant again, because Saddleback is nowhere within sight on the page they've actually landed on. It's sneaky because it seems like incompetence, but the reality is that they've absolutely done it on purpose so they can double-dip one customer and display ads to them from restaurants that paid more to DoorDash.
I'm not sure I buy it. I work for one of the delivery companies, and small locally owned merchants give better margins and more profit compared to these giant chains who can negotiate really low commissions.
On top of that, you risk losing the customer because you have to keep them interested. They were literally looking to order food and you brought them back to the 'browsing around' stage. Is that actually a good idea? I'm not so sure.
DoorDash, Grubhub, etc. are becoming the place that customers go to when looking for food. And if they own the customer relationship, then your restaurant is a commodity. This is basically how I live already. I sometimes want something specific from a specific restaurant, but more often than not, I just want something and I browse through Seamless until I see some food that looks good and order it. I don't really know or care where it's coming from as long as it's reasonably priced and has decent ratings.
I know how heavy the fees are, so I tried for awhile to order from restaurants directly, but it's often horribly painful. You have to call on the phone, which is already a huge hit to user experience. Then you have issues with noise, accents, trying to accurately convey exactly what you want with any modifications, providing your credit card over the phone. It's just horrible and I always fall back to just using Seamless. I feel bad, but restaurants certainly don't seem like they're going out of their way to make the direct ordering experience as painless as possible.
These restaurants don't have the money or expertise to develop great websites or apps, and I don't want an app on my phone for every restaurant anyway. Nor do I want a list of dozens of bookmarks for restaurants, without a way to discover new ones. Not that it matters, because I think we've seen pretty clearly that consumers as a whole are going to just go with whatever's easiest for them. And anyone who is going to build out the infrastructure that Doordash and Grubhub have so they can own the customer relationship due to a superior UX is going to extract as much value as they can as well, or they won't be able to keep up with the competition in terms of UX or ads. It feels like a fairly intractable problem without regulation, which I'm generally skeptical of. But maybe that's the answer here.
I do wonder if Google and Apple could add "order online" functionality to their maps programs without too much trouble. Their interests might be more aligned with restaurants such that they could take 5-10% instead of 30%.
I agree with the original article that the platforms are screwing over the small businesses, but I think this comment about the end-user experience is very important too. Some people don't like talking on the phone, some people just like the convenience of one app to order any kind of food. Like it or not, in aggregate, people value convenience and low price over quality of experience and fairness.
I think there are a lot of variables in play. First is about restaurants as commodity. The problem is that in the US, this is often literally true. Chain restaurant (franchises) all have the same menu, same suppliers, same process. Yet they still compete with "mom&pop" places where recipes are unique, food is locally sourced (sometimes), and they are pouring their sweat and tears into the business to make a living. People say they want to support their local businesses, but then convenience or price wins out in the end.
Another factor is the asymmetry between small-business owner restaurants and the nation-wide delivery platforms. Industrial food chains like Taco Bell and Chipotle's can negotiate national contracts (and pass the costs to their franchisees), but every independent restaurant is at a disadvantage. Independent restaurants are usually overloaded
already dealing with suppliers, employees, and landlords, and they are not savvy about all the issues with online advertising and marketing.
Finally, there is the deception. The platforms have slick marketing and sell one rosey outlook to the restaurants, get the contract signed, then do a lot of other shady things as this original article points out. It would be great if the restaurant owners could understand these marketing practices and insist on contracts that protect them. Given that most owners are probably too busy and not knowledgeable about online marketing, it would be great if there were small-business associations that stood up and insisted on fair terms for all small businesses. And absent that, there should be regulations and enforcement.
Yes, the online advertising industry definitely needs more regulation, and if the small businesses are too fragmented to stand up together, the government should step in to make laws and stop the abuses.
"This is basically how I live already. I sometimes want something specific from a specific restaurant, but more often than not, I just want something and I browse through Seamless until I see some food that looks good and order it. I don't really know or care where it's coming from as long as it's reasonably priced and has decent ratings."
I sincerely and genuinely hope you are the minority because I simply cannot imagine living my life like this and I hope others are not either.
Yes, I know there is the archetype of person, especially in tech, that considers food nothing but fuel to keep their brain going. That's the kind that gravitated toward Soylent.
I think it's appalling. Food is one the the most important human experiences. It is specific, it is unique, it is cultural. I would put it on the same pantheon as poetry and music in terms of historical and artistic significance, and the gap between the bottom of the barrel and the truely life changing experience.
Now, I recognize I'm on the opposite end of the spectrum. I crave specific dishes from specific restaurants. But most people I know at least follow some form of branching decision tree: "do you feel like Mexican or Japanese?". "okay, sushi or ramen?". "that place across the street or by the park?". "okay should we call them or see if they are on doordash?"
I do agree with your other points about the technological factors here, but disagree with the foundation you built it on.
A lot of restaurants I like have stood up ordering sites on Square and other POS providers like Toast. They got the sites up quickly and they're quite usable. They have to take the time to enter in all the options they support but the end result is good. In my experience it's been better than delivery sites (which I've recently sworn off because of their predatory practices).
These will go away once DoorDash needs to be profitable. At best, this is cheese in the mousetrap. Legally, it should be regarded as predatory pricing used to drive their competitors (the restaurants themselves) out of the delivery industry.
I'm guessing you haven't called too many restaurants in NYC to order delivery. It's laughable that you think some random little restaurant is going to offer some kind of concierge ordering service like you're describing. I've literally never had a single one of those things happen. Mostly it's just unintelligible noises and you just hope and pray they heard you right, entered it into the system right, and didn't steal your credit card info. There's a reason people vastly prefer to order online vs. calling on the phone.
Not only ads but these online ordering companies go as far as to setup fake websites under fake domains that make it look like an official website to unsuspecting restaurants that did not have websites.
Previously, they would also take these fake websites and use them to claim the official website on the Google Places listing so they can show up at the top without much SEO.
But often their fake websites would show up organically and appear as the real website, and then they’d take a 30% fee for “referring” the customer.
I learned about this when I was trying to sell an online ordering platform so restaurants could setup their own websites with ordering. The problem was sales was slow and expensive, and small restaurants weren’t savvy enough to understand they’d need to spend a lump sum to setup their websites to fix the problem, or even how or why the problem existed.
When I was traveling south America start of the 2010s, fake websites showed up for every single Colombian hotel on Google. %hotelname%.co Which all we're hosted by different companies wanting to sell you a hotel stay in a random hotel. I tried it a few times in the beginning, and it was a disaster.
I asked a Colombia friend about it later, he just laughed and said: Colombians don't visit .co domain. They are all spam. But .com we trust.
If there is no official website, then that sounds like a genuine referral to me.
And while tricking a company into a referral fee is bad, if the companies weren't signing mystery contracts there wouldn't be a referral fee. They'd get full menu price and be fine.
This is flat out incorrect. Restaurants can simply ask for the domain to be transferred over. Grubhub was “caught” selling something that merchants sign up for. The suite of products can be complicated, so it’s understandable that people can be confused (the burden is on Grubhub to make things clearer, for sure). But this is not the nefarious act you’re framing it to be.
It’s because what you are saying is factually incorrect. What actually happened is that they set them up and promoted them unrequested. You had to know this was happening and file an opt-out request to get them to stop, which is why they changed their policy later. Similarly, the fake phone numbers were setup without the restaurants’ knowledge until it got attention and laws passed banning the practice.
> "Grubhub has never cybersquatted, which is identified by ICANN as 'generally bad faith registration of another person’s trademark in a domain name,'" the company said in a statement. "As a service to our restaurants, we have created microsites for them as another source of orders and to increase their online brand presence. Additionally, we have registered domains on their behalf, consistent with our restaurant contracts. We no longer provide that service and it has always been our practice to transfer the domain to the restaurant as soon as they request it."
Totally agreed that Grubhub could've clarified this better. SMB Sales is hard, and it's not easy to communicate every aspect of a contract to every single merchant.
That’s the PR spin. If you read it more carefully, notice that they did this without requests from the restaurant, which is why all of those articles include owners who were surprised by the practice. They claim that their TOS allows it and that’s why it’s not classic cybersquatting but if all they’d been doing was on-demand microsites they wouldn’t have stopped as soon as it got attention.
Again, totally agreed that Grubhub should've made microsites more obvious to merchants during the sales cycle. But it's not PR spin - to a merchant with 0 online presence (more than you'd think), the value is demonstrable.
No company lines out every single little thing they do during a sale because the whole point of using a company like Grubhub is "we'll take care of this eCommerce thing for you." I'm with you in that they should've been more explicit about microsites given that more and more owners have to be aware of their online presence. I believe it's an understandable mistake given Grubhub's size, and that the amount of feedback around microsites was likely really low (or else they would've gotten ahead of it).
I also understand your skepticism given that Grubhub hasn't done a great job of handling the narrative around these things.
This isn't a narrative, "sales is hard", or PR problem.
It's a surprising, unasked-for, and disagreeable experience for a restaurant owner.
If they ask for a microsite when it is offered, sell it to them. If they don't, don't.
Hiding behind "No company lines out every single little thing they do during a sale" or "getting people to understand contracts is hard" is bullshit.
This isn't a harmless EULA. Contracts with an asterisk'ed "(oh and by the way we'll do a bunch of other shit on your behalf), sorry, there's a lot of stuff, trust us, just sign here" are the ethical equivalent of a fake "Download" button. Take the time to get your prospects to understand what you're offering. If taking the time loses you sales, take a long hard look at what you're selling or the prospects you've chosen. If the people making the sales can't be counted on to take the time, get salespeople with more integrity.
Hiding behind "[we did it without telling them because] the value is demonstrable" is, similarly, bullshit. Demonstrate the value. Your customers may agree with your demonstration and choose to purchase a feature, or not. This is called sales.
Claiming this is an "understandable mistake given Grubhub's size" is, you guessed it, bullshit. That translates to "Google/other big companies routinely abuse their customers without consequence, so it's OK that GrubHub does too!" Getting away with something is not the same as acting ethically.
You're all over this thread defending this practice as a sales misstep or a messaging failure. It's neither of those things. It's an instance of the distressingly common habit of software companies to knowingly act unethically towards their customers--usually for the clicks/traffic/sale, and rarely when they misguidedly think they're doing the right thing--because they know they can probably get away with it, and, when called out, brush it under the rug as a "misunderstanding".
GrubHub had three choices: behave ethically, without glossing over what was going to be sold (this would have been harder and may have resulted in slower growth); behave knowingly unethically; not build/sell the thing at all. They chose the second.
I'm sure there are some completely (technologically) clueless owners that are happy with this arrangement.
But for anyone with a hint of business sense, why would you hand over the keys for your online presence to another company? Assuming the restaurant owner doesn't control the domain in this relationship.
Every mom and pop restaurant out there has a web page they paid for when they opened, then likely never thought of again. With obsolete menu items, old phone number or whatever. Can't count the number of times I've had to use Yelp or whatever because the business' own page was useless?
I tried to find a locksmith once via Google. Maps would list a local locksmith with a street address and phone number with local exchange, but the calls all went to one or two centralized numbers. The locations seemed to be fake. It was a very disconcerting way for companies to operate, especially for something as sensitive as house keys.
I know for a fact eat24 did this, and a crappy looking website called Beyond Menu. I'm not sure if GrubHub did this (before the merger). A lot of the times the goals of these sites were to make it look like you were ordering from the restaurant directly, so it was a bit obscured. Order Ahead did this, but only because frankly everyone else was doing it (they definitely didn't spearhead it as a relatively late entrant into the space).
Definitely seems like customer deception, and potential misuse/theft of a trademark.
I am generally skeptical of class-actions, but this seems like a legitimate subject for a (well-run) class-action lawsuit for the benefit of parties who were actually wronged.
Sure, but these things don't really get enforced. I mean, one of my current competitors advertises their product as made in USA (which it is not), but only if you use their chat widget to talk to them (which most customers do) in a move I assume is to remove any paper trail. There is no real clear path except maybe ones that involve either bribing a politician or a lobbyist (which may be the same thing) to get this pursued.
In the Nederlands multiple companies have bocome very big by using this trick. Some companies where doing this for some simple SEO improvements. The first site that used this trick to my knowledge was a website called CoolBlue 4 to 5 years ago (a Amazon like that only sells tech) For every category on there site they would claim a new domain name. So they would have ssdstore.nl monotorcenter.nl etc... once this happend many other sites followed. but this time the evil route.
A dutch Uber eats like company called "Thuisbezorged" made there signup price really cheap. like 2% of a restaurants income they made on the site was payed for using the platform. you get a personal website with a menu but after a while they started to push this really hard, buying automated domain names that roughly look like the name. And they started to spend google adsence for you sometimes without your knowing. restaurants now pay 30% of what they earn on the website to the platform and there are special rules that prohibit them from doing special offers to lure people to there own site.
So it sound like this stuff has already bean going on in the past 5 years, atleast here in the Netherlands it has.
It sure feels like it. I don't know whether it's legally fraud, but it feels very icky. I wonder how the product managers and engineers behind this justify it to themselves.
Another thing I realized lately: I usually tip restaurants for curbside/pickup right now since I know their staff have been hit hard. But if we DoorDash, the tip goes to DoorDash, not the restaurant I want to support.
I generally try to order either curbside or delivery through the restaurant's own site. I figure even if they use a third party then, they're using the one most advantageous to their business.
I want my favorite restaurants to survive this pandemic, but I couldn't care less about these delivery startups.
> I want my favorite restaurants to survive this pandemic, but I couldn't care less about these delivery startups.
Does the tip go to DoorDash, or to the person that delivered for DoorDash? I want the restaurants to survive too, but I have to imagine a lot of these DoorDash delivery people were either Uber drivers or employed somewhere else a few weeks ago until furloughed, and may have a less stable income than someone working at a restaurant which is getting takeout orders.
The tip, or at least a portion of it, goes to the driver. What DoorTrash used to do was steal all or part of the tip in order to subsidize the driver's base pay. It think they changed their pay model(after public outrage) to not do that, but I stopped delivery driving a long time ago so I can't say that with 100% certainty. For GrubHub, the entire tip goes to the driver.
This practice can’t really be stopped though. Industries generally adjust their base pay to reflect average tipping income. Doordash was doing it at a dynamic per-order level. But if they can’t do that they can still do it on aggregate based on predicted tips.
Basically, tipping an average amount contributes to the problem. Everyone would have to keep raising the tip amounts but that’s not easily coordinated.
The restaurant industry operated under the pay model of "you get $2/hour + tips but if you don't make at least minimum wage we'll pay the extra", which is exactly what DoorDash was doing. California outlawed this practice years ago in the restaurant industry, saying you need to pay at least the minimum + tips, none of this $2/hour nonsense. There's no reason they couldn't do the same to the gig economy.
I don't see any indication that California ever had a separate minimum wage for tipped employees. Are you referring to some California-specific provision? Seems like a strange way to do things.
This is a question with two answers. It depends on the company.
There is lots of evidence of some delivery companies using your “tip” to cover the base salary of their employees. So if a driver is guaranteed $5/hr, and you tip $3, DD/UberEats/etc. will claim they only have to pay out $2 for that hour.
Skimming puts it lightly. If the driver's base pay was $5, for instance, and the customer tipped $5 through the app, the driver would receive $0 in tips because PoorDash would use the tip to offset as much of the base pay as possible. That's theft and borderline fraud because the term "tip" implies that the money will go to the person responsible for delivering your food, not Tony Xu the CEO.
Every time this comes up I'm always astounded that most people have no idea how tips work.
In a lot of states, at least for restaurant workers, this is normal practice and explicitly allowed for by law. In those states, this has been common practice since ... forever? The laws there require restaurant owners to pay the waiters such that their wage + tips combined should be at least the minimum wage. If a waiter makes more than the minimum wage in tips then the owner only needs to pay a less than minimum wage amount.
So as an example, in Texas, if a waiter made more then $5.12/hr in tips, the restaurant owner needs to pay him/her only $2.13/hr.
The question I have is: Why are we OK with this for waiters but suddenly get upset when this happens to the drivers? Do you ask your favorite restaurants their policy?
> When the practice was brought to the United States in the 19th century, the American public was deeply uncomfortable with it. Many saw tipping as undemocratic and therefore un-American. A powerful anti-tipping movement erupted, fueled by the argument that employers, not customers, should be paying workers. But American restaurants and railway companies fought particularly hard to keep tipping, because it meant they didn’t have to pay recently freed black slaves who were now employed by those industries.[1] (emphasis mine)
> Europe eventually did away with tipping. But in America, pressure from powerful corporate interests resulted in a two-tiered wage system for tipped and non-tipped workers, institutionalizing a highly racialized system of economic exclusion. Formalized in 1938 in the first minimum wage law as part of the New Deal, this separate and unequal system stated that employers were not obligated to pay a base wage to workers whose minimum wage was met through tips.[1] (emphasis mine)
Tipping, and the laws surrounding it, are based on forcing minorities to work for substandard wages and opening them up to exploitation and harassment with no accountability for their employers. Appealing to the laws is appealing to inherently racist rationalizations of what fair wages are and should be.
People know how tips work. How tips work is the problem that needs to be solved. History and context matters, in this case and many more.
> Appealing to the laws is appealing to inherently racist rationalizations of what fair wages are and should be.
This argument is hard to take seriously.
Do you really think that eliminating tipping would do away with racial wage disparities and sexual harassment? If only our problems were that easy to solve.
> The question I have is: Why are we OK with this for waiters but suddenly get upset when this happens to the drivers? Do you ask your favorite restaurants their policy?
It's not OK, and it's part of the reason why I don't often go to restaurants even though I could afford to eat at one every night.
There is one difference, though, which is that restaurant staff are well aware of the nature of their pay.
Most DoorDash drivers didn't realize that they were being gypped. I know this because, when I was driving for GrubHub, I would sometimes bump into DoorDash drivers and I would ask them about DoorDash's pay model. Most didn't have a clue that they were getting tipped but that the tip was disappearing into the pockets of DoorDash. I'm sure that DoorDash had something about that in 6 pt font somewhere, but not everyone will read or even comprehend that. Unless the customer asks if you got the tip, there was no way for a driver to even know if they had a tip when that tip did not exceed their base pay. At least restaurant workers know that there are tips and can see the full amount. Until this came out, a lot of drivers considered DoorDash to be supplementary because the customers were "stingy", when in fact that may not have been the case.
But no, I do not ask my favorite restaurants their pay policy. Perhaps I should.
EDIT: Another key difference between restaurant workers and food delivery app drivers is that customers of DoorDash almost always tip ahead of time, so it's not as if the driver can do much if anything to improve their chances of getting a bigger tip. With traditional tipping, it's implied that an advantage in being paid mostly in tips was that better service could equate to more pay. DoorDash a few years ago was taking advantage of people's common understanding of what it means to tip someone and keep both prices and costs down, with the driver being the one to get screwed and not even realize it.
> Most DoorDash drivers didn't realize that they were being gypped.
First, I'm only really bringing this up because I used that same term for much of my early life without knowing it's origins, so I think it's worth discussing because of the way it's unconsciously used by many, and not as an attempt to chastise. The term "gypped" has some connotations once you know where it's from that make it hard to ignore and it ends up distracting from the point. After the origins become clear, it's sort of like hearing "jewed" as a verb. Gypped may be somewhat common, and may be used without ill-intent and unknowingly the vast majority of times, but it's also one of those words that's better dying off.
> Another key difference between restaurant workers and food delivery app drivers is that customers of DoorDash almost always tip ahead of time, so it's not as if the driver can do much if anything to improve their chances of getting a bigger tip. With traditional tipping, it's implied that an advantage in being paid mostly in tips was that better service could equate to more pay.
It is implied, but generally not the reality. The correlation is fairly poor:
> customers of DoorDash almost always tip ahead of time
A tip before you receive a service is indistinguishable from a bribe used to prioritize your service.
I don't understand why this is the norm, and why so many people play along. It would be so much more sensible to tap the user on the shoulder after the delivery to ask them for their tip.
Why is this matter though? at the end of the day, what matter is my final net pay. It doesn't matter if the company take all my tip or deduct something, or some other complicated calculation, all i care is the final amount. If I consider that amount too low for the work I did then I don't do it.
Why wouldn't you want to make more if you could? Wouldn't you want your extra effort to pay off? I get your point, but it's not like the net pay of delivery drivers is particularly good. Most of them multi-app between DoorDash, GrubHub, Postmates and Uber Eats in order to make any meaningful amount of money.
Yes of course I would always want to make more. For example: The company can say my pay is $100 but then after some complex calculation, I get $50. I don't care how they calculate it, all I know is from my perspective my pay is actually $50 (not $100) and I would then use this $50 number to compare with my total effort (normal effort + extra effort).
>but it's not like the net pay of delivery drivers is particularly good
Then I simply won't do it. This has nothing to do with the pay model
Not exactly. The $5 will always go to the delivery driver, not Tony Xu the CEO. The problem is that they use the tips to obscure what the base pay actually is so workers didn't really know how much they'll make above the guaranteed rate. This was great if people didn't decide to tip since Tony Xu would need to cover the difference (which you use to game btw if you always put $0 tip in the app but handed them a cash tip).
This is basically the same model used by restaurants to pay front-of-house staff. They guarantee minimum wage, but actually provide a lower base pay and use tips to make up the difference.
Correct. The base pay(let's just say $5, I don't remember if that's what it was) always goes to the driver. However, if the customer added a $2 tip, the driver paid $5 and DoorDash paid the driver $3. If the customer tipped $5, the driver got paid $5 and DoorDash paid nothing, the whole time the customer believing that the tip went to the driver and the driver believing they got no tip.
As I stated elsewhere in this thread, the nature of a delivery app "tip" is different from the restaurant industry. Not only do restaurant workers fully understand how their pay model works, but they can get higher pay for providing better service. This isn't possible for most delivery apps because customers almost always enter a tip amount when they pay for the food, before the driver even has a chance to get to the restaurant.
This is why customers should tip their drivers in cash.
EDIT: The reason I brought up Tony Xu is because his company should be always paying its driver's base pay without taking from the tip. We can get into the semantics of who's paying who when a tip is seen as a "subsidy", but that's not how we should be seeing it in the first place. By potentially paying little to nothing for a delivery being made, DoorDash was able to keep more of its earnings from the delivery. No matter the angle you look at it, DoorDash were the ones taking home more money because of the pay model.
The fact that "base pay" is lower than minimum wage is already setting up an exploitative situation. The laws were made by lobbyists who wanted to make sure the newly freed slaves they employed weren't on the payroll from the employer.
"Wrongness" and "illegality" are not the same thing.
Only DoorDash and Instacart did this. UberEats never did.
> As DoorDash grew to become the biggest on-demand food delivery app in the country, it began doing something unconventional with customers’ tips: It used them mostly to subsidize its payments to delivery workers.
No they're not, at least from what I can tell. My daughter drives for them, and the base pay + tip amount is exactly what she is paid. They might have made some adjustments with base pay over the years, or they might be hiding what the customer actually tipped vs. what is reported to the drivers. But from our perspective, it looks like this issue has been resolved.
Apparently they offer a low "base pay" and if nobody accepts the order, they increase it slowly. Therefore, higher tip orders get accepted sooner and with a lower base pay.
Right, this is generally the case. The higher the tip, the more likely a "dasher" will accept the order. When you get good, the dollar / mile ends up being the best discriminator for choosing orders. A $3 order (minimum base pay) for 1 mile trip might still be worth it.
I sympathize, but I have no particular desire to validate or support the gig worker model. I'd much rather some company with health benefits and vacation time employs them in the future.
And if I'm going to pick who to support from my own limited funds, it'd be the people working at the restaurants I very much want to patronize when this is over. Some of my favorites are already gone for good.
Well, you're already supporting the restaurant and their workers with your funds by ordering food there. It's entirely possible most the waiters and waitresses at that restaurant are now out doing delivery gig work because that restaurant with health benefits and vacation pay (which likely paid them minimum wage and relied on tips to make the job worth doing, so good luck using that vacation pay as equivalent income during that time) isn't scheduling them to work.
For me, if it comes down to the cooks and limited waitstaff left at the restaurant and getting paid by the restaurant get a few extra bucks from me or someone that lost their stable income and is scrambling to make ends meet, I definitely want it going to the latter. I can't be sure what situation the drivers are in, but to me it seems more likely their position is less stable.
I felt the same when I ordered dinner for myself and my girlfriend from a restaurant here in SF. I called up prior to ordering to ask if they had a preference on delivery provider- they said they were all about the same, but thanked me for asking.
When was just about done filling out my order, I added a big tip, and my girlfriend reminded me it was not going to the restaurant at all, which had completely flew over my head. My entire view of delivery services has changed during this pandemic, thanks to these restaurants coming forward about how much they are getting screwed.
I used to only order from Seamless or UberEats because their "streamlined" experience.
But now that I am hearing so many terrible things that these VC-backed startups are doing to small restaurants, I now specifically look for the restaurant's website, or even just call them directly and order a takeout.
For a while, I saw an option to tip the restaurant as a line item in UberEats. Not sure if it's everywhere yet. It was also a bit confusing that there were two different tips, with different UX (since there's still the existing option to also tip the driver).
One issue with this approach is that the industry has lost consumer trust in this specifically. That is, DoorDash used to keep tips, then there was public outcry, then they said they would change, but then it looked like they actually didn't https://www.businessinsider.com/doordash-still-be-pocketing-...
(I know this is about it being for the driver, but the overall point still stands, I think.)
I believe it was a fixed number, maybe $5 that they matched? It wasn't part of the normal tip UI, it had its own CTA and was added as a line item on your receipt when you actually did it.
That was about DoorDash (corporate) keeping tips intended for DoorDash drivers. The person you are replying to wants to tip the restaurant not DoorDash or their driver.
True. But that is still going to a Doordash "employee" and not to an employee of the restaurant itself. So DoorDash is still diverting money that I would normally give to the restaurant.
Same. I’m cool with the driver getting a tip (and for a while the delivery startups were taking cuts of those), but there doesn’t seem to be a way to tip the restaurant.
The exception appears to be ChowNow where, I think, restaurants pay a flat fee as opposed to the percent of sale business model. Plus I can pick up, so the tip that you leave is really the restaurant, though who knows if they’re skimming from their staff.
https://thecounter.org/google-online-delivery-order-button-d...
> ChowNow makes it pretty easy for restaurant owners to understand the implications of Google’s new button. It offers a “Profit Protector” program that essentially inflates menu prices to make up for the price of the commission. It also assures owners that they can opt out of ChowNow’s Google services anytime by contacting the platform’s support staff.
I've found that many of favorite businesses advertise using Caviar, at least here in SF. I wonder if they're offering better rates. This is purely anecdotal.
The problem with this is that many delivery drivers use the tip to determine if the delivery is worth their time to accept. If you put in $0 (assuming a cash tip at delivery) nobody will want to pick up your order. On average it will arrive later and in worse condition than if you had entered a higher tip into the app. The tipping incentives for online ordering are all backwards.
It would be nice if they just turned it into a "bounty" system. Delivery is "free" to start. You (and the restaurant since they want to make a sale too) can put up whatever number you want to attract a delivery driver to take the job. Like it's super weird but at least it's honest about how these systems work.
I'm done with delivery services because of this stuff. Is it really that hard for me to drive 5-10 minutes and pick stuff up? Not really.
And my wife and I have discovered the joy of eating in the car during the pandemic. If we drive 20 minutes to a place it's best to eat it right away than to drive home and have everything get cold and soggy.
The simplest way to support the restaurant is to pick up the food yourself. Get some fresh air and get out of the house, and cut out the middleman! It's a win-win-win.
Ok but it's also an inefficient way of tipping. Just leave extra cash. Or like I mentioned, give the food away. By making them prepare food that won't be eaten you're wasting extra money that could be going to the restaurant. They'd rather you just gave them $1 extra, than have you pay $5 on an additional item that they then have to spend $4.50 on food and labor cost to make.
If you don't like certain business practices, vote with your dollar!
I refuse to use delivery apps because they skim ~10-20% off the top of my orders. I understand the utility of DoorDash -- there are a lot of customers who want the single interface and can't be bothered to search for a restaurant individually. But if you care at all about this sort of thing, with a simple search you can find the phone number of the restaurant you like and call them up. There will always be someone by the phone, this is how restaurants operated for 50+ years! The ordering process is, paradoxically, easier and less time-consuming than going through DoorDash. I find the app to be slow, with way too many menus and scrolling. Even the browser interface is kludgy because they insist on making huge buttons that take up a large part of the screen, so I can only consider like 4 options at a time on my screen. It's been easier for me just to get a PDF of the menu, read off the stuff I'd like, and go pick it up 20 minutes later. Bonus -- the restaurant gets 100% of your tips. In this era the rent-seeking behavior of these app companies really becomes apparent. It's not easier to do it through them -- they add no real value. Clearly they don't add value for the small restaurants either: they're shafting the small ones in favor of those who have a corporate structure and throw millions of dollars into ads.
Stop feeding the ad platforms that use sneaky tricks to make the profits they promised to their investors. It's a self-perpetuating cycle if you keep letting them feed the VCs' expectations to the detriment of the people, the end users.
Voting with your dollars doesn't really work. You are and ant and the people who feel like you are a small percentage.
I stopped shopping at Wal-Mart around 2007, and Amazon in 2016. My purchased don't make a dent. I share my opinions and know several others who don't shop at Wal-Mart, but I remember during the 2008 financial crisis, people who had previously refused to shop at Wal-Mart were doing it again, verbally hating it, because they had kids and tight budgets and they saving nearly a $1/item on some things.
We can try to affect things with our purchases and advertising those decisions to others, but honestly, they don't even compare in the slightest to the power of corporate advertising at scale.
> Voting with your dollars doesn't really work. You are and ant and the people who feel like you are a small percentage.
Couldn't you say the same thing about actual voting, though? In an election, what difference does your one vote make, in the grand scheme of things? Has there ever been an election where the margin was low enough that your one vote would have made a real difference?
Oh absolutely! Especially in non-representational voting systems like in the US. Australia has order of preference (ranking) so you can't throw your vote away and NZ has MMP to evenly distribute half the party seats by % of the population that votes for them.
American voting is pretty next to useless. I did a whole video on that:
I like the ongoing debate between different voting schemes. I prefer approval voting over other things like RCV/IRV -- it reflects "average" percentages of approval directly and results in the least dissatisfaction, averaged across the population. No spoiler effects, which still exist in FPTP and RCV.
The most interesting and IMO overlooked part is how easy it is to communicate to the voter how they should vote. Approval voting is easy -- at the top of the ballot just say "check the box next to each name of the person who you approve of, and check as many as you like".
> Voting with your dollars doesn't really work....I stopped shopping at Wal-Mart around 2007
There's a really interesting part in the documentary "Food Inc." Where they're talking about big industrial food processing places destroying quality, etc.
At one point he interviews Walmart's head of milk ordering (whatever it's called).. and the person has some really interesting insight. Customers didn't want to buy milk from cows that had whatever hormone... and it became such a big deal that Walmart saw sales of that type of milk plummet, so they stopped buying and selling all milk with that hormone.
They now don't stock or sell any. Period.
So in fact, when people vote with their dollars companies as big as Walmart do actually notice, and they do make changes for the better.
True. But change happens from the ground up, and as more people glom onto a more morals-based view on their spending habits, other efforts will become easier to organize and wrangle until sufficient pressure can be put from below to change the circumstances in real ways.
This is mainly about changing culture, which informs laws when that culture becomes widespread. And it helps me sleep at night ;)
What you're missing here is that you not shopping anymore DOES have an affect. You're just missing the larger picture where they might be seeing a reduction in growth of shoppers and they might be considering doing things to combat that.
> you can find the phone number of the restaurant you like and call them up.
> The ordering process is, paradoxically, easier and less time-consuming than going through DoorDash.
The requirement that I call makes it harder and more frustrating to use than DoorDash. I can order DoorDash in a meeting. I can do it on my way to work on the train. I can start my order, pivot to a new chat message, and return 5 minutes later where I left off. I have to hope that my order and my address is not misheard. If I have a complaint, I complain to DoorDash through its interface, not some person on the phone and whatever process they have for resolving things.
The value of DoorDash is that it becomes something I can do in a scrap of time rather than finding a time to do it.
It sounds like you're busy enough, with enough responsibilities, and not enough care about what you're eating, that you could afford an assistant to do those things for you.
When you vote with your dollars, people with more dollars get more votes.
Customers, drivers, and restaurateurs all hate doordash, but they have no choice because Doordash uses their oodles of VC bucks to squash competition and underhanded shady shit (like putting up menus without consent) to force restaurants to participate and hook them in.
Right, so I would push back on the idea that "restaurants have no choice" — DoorDash, GrubHub, UberEats et al appear to be a strict improvement over the erstwhile status quo.
The choice is to regress, and restaurants were doing just fine 5+ years ago.
An individual restaurant can’t just go back to the pre-delivery days when the whole industry has moved on. That’s not how competitive markets function.
Well this isn't "pre-delivery". Delivery isn't a new thing — food delivery has existed over the past several decades. It's just that restaurants had to provide it themselves, and hire their own delivery drivers.
Platforms like DoorDash et al obviate the need for that, in return for a transaction fee. Restaurants appear to think that this is a good deal. If that's no longer the case, there is nothing stopping them from taking those transaction fees that they lose and using those funds to hire their own couriers — the labor market is pretty loose right now.
You keep missing the point. The delivery apps are “stealing” the demand, so you have no choice as a single restaurant because your customers are moving to the app regardless. Saying “well, the restaurants are staying on the platforms, so it must be valuable to them” misses the entire context of the market structure before these demand aggregators arose.
I'm not "missing" anything, I'm well aware that the delivery apps are "stealing" the demand. The value proposition to restaurants is two-fold:
1) delivery-as-a-service without having to manage that last mile delivery themselves
2) easy access to aggregated demand without having to reach customers directly and commensurate marketing costs
In return for that, they pay a transaction fee and lose some leverage.
If restaurants find letting go of (1) or (2) to be "too difficult", then that means that the apps in question are indeed providing value and convenience to the restaurants.
If the restaurants don't want to have to deal with the downsides of being on a platform, they will also have to forego the upsides that come with it. There is no free lunch (heh).
The apps are “providing value” to the restaurants only in the most narrow sense, to the point of being meaningless. Obviously restaurants find it “worth it” in some sense or they wouldn’t do it. But that ignores how we got here, which is totally disingenuous. If someone legally robs you of 30% instead of 100% and you reluctantly agree on the principle that something is better than nothing, that doesn’t mean they “provided value” to you, or that you weren’t a victim of injustice. Sometimes you take the settlement even if you know you’re in the right but you can’t prove it in court, or worse, you can’t afford to prove it.
The value to the customer here is indisputable, and even the delivery logistics value proposition is clear (although at least here in NYC almost all seamless delivery people work for the restaurants), the “stolen” demand is completely shitty for restaurants. I don’t want to regulate these apps out of existence, just think we can find a better way to do this.
You're right that they're sort of structurally forced into using these, so it seems a bit weird to say they're adding value.
But maybe these delivery services have grown aggregate demand for restaurant food by making it more convenient for customers? Anecdotal, but I used Uber/Lyft probably >50x more than I ever used taxis outside of NYC, and I've gotten a lot more takeout than I used to since these delivery apps became available.
If I still lived in NYC, the differential would've been much smaller, but most of the country is waaaay behind NYC in taxi/delivery usage per capita, many people are coming from near 0 in those categories.
I do think they’re growing the overall pie by increasing total takeout and delivery spend, but restaurant margins were always razor thin, so losing 30% off the top will just drive many restaurants out of business.
I think the long-term here is probably just different, not worse. Many restaurants will go under, but new ones will arise that optimize for this. See the ghost kitchen phenomenon. And hopefully a combination of restaurant and user revolt, the threat of regulation, and competitive pressure from other delivery services will drive fees down to something more reasonable like 10-15%.
Oh no you’re perfectly right about the “stolen demand”. I just think it’s a feature and not a bug.
The “stolen” demand is a function of the fact that other restaurants refuse to stop using the platform, ostensibly because they also see value in continuing to use it. Consumers will only use the app if there is sufficient supply on the other end. Some restaurants have seen more value than others since the inception of these platforms. There is a spectrum of outcomes, which you would expect in a competitive market.
The “structural change” here is that restaurants have become commoditized and are now competing with each other. There will be some restaurants that emerge as winners, and some as losers. I don’t personally care about the losers if, in the aggregate, the restaurant industry is made more efficient, and consumers are better off.
other restaurants refuse to stop using the platform
But there is a useful feedback loop here.
1. Courageous Restaurant bans GrubHub, Doordash et al. Delivery-insistent demand shifts to Competitors 1-4, meaning they get substantially more of these revenue-neutral (or worse) delivery orders.
2. Competitor 1 gets sick of this is and likewise bans GrubHub, Doordash et al. Delivery-insistent demand shifts to Competitors 2-4, meaning they get an even higher percentage of their orders being these revenue-neutral (or worse) delivery orders.
By now, both benefit by word of mouth regarding ordering and traffic becoming more streamlined by the absence of the delivery service-specific retail point of sale system foibles, less traffic at entry and pick-up, and consistent quality. Also, some drivers abandon the services to do direct delivery as restaurant employees, at least during peak hours, and the saved 35% can be split between restaurant and employee.
3. Competitor 2 gets sick of this is and likewise bans GrubHub, Doordash et al. Delivery-insistent demand shifts to Competitors 3-4, meaning they get an even higher yet percentage of their orders being these revenue-neutral (or worse) delivery orders.
4. Competitors 3-4 are now drowning in low-profit delivery orders and the traffic impact (foot and vehicle) alienates what's left of first-hand customers. Every negative delivery experience costs both the delivery service and the restaurant another customer. One abandons delivery services, the other folds altogether.
Dollar for dollar, I bet most business that used to not deliver are making less margin now. I don't need to buy a can of Sprite for a $1.50 because I'm at home. I don't need to buy a bottle of beer for $4.00 because I have a six pack at home. How many people get dessert delivered with their meal?
It really seems like, from the restaurant's perspective, there isn't an asymmetry of information, the costs are generally well known, the net benefit (increase in business, impact to margin) is empirically known from each restaurant's financial results over the past few years.
At this point the businesses in question have enough information to decide for themselves if they think this whole deal is worth it for them.
> with a simple search you can find the phone number of the restaurant you like and call them up
If I understand GrubHub's model correctly, when a restaurant receives a phone order via the number listed in GrubHub they are still on the hook for the same marketing commission as if the order came from the GrubHub website. I may be (and hope I am) wrong about this, though.
I mean that's fine, but it ignores the fact / elephant-in-the-room that the primary purpose served by these platforms is delivery logistics.
If I want / need delivery, my list of choices for "just call up directly" decreases to those restaurants which actually employ delivery staff, which is anecdotally a much, much shorter one.
Why would you tip for an order that you went and picked up yourself?
I wholeheartedly agree with ordering directly from the restaurant, but I can't think of anything they did in that transaction sequence to warrant a tip.
Yeah, good question. To get closer to the "true utility" of the transaction we should probably just eliminate tipping altogether, and replace it with fair wage laws.
Reading this article, I realized that DoorDash and UberEats now own me as a customer.
I have never been particularly picky about my restaurants. Chinese food is Chinese food. McDonalds vs Wendys is not something I have strong feelings about. Plenty of places have good ribs. Obviously there are places I will avoid due to bad experiences, but I am not highly opinionated as long as I find the food tasty. I am one of those people who would go to a different BBQ place if I found a cheaper one or a more interesting menu.
Even when I don't want to cook, I don't search for a particular food item anymore and probably take the top DoorDash deal half the time. Even within that, I don't choose a restaurant anymore. I choose food and am generally satisfied with whoever DoorDash has to supply that food.
That is a major shift for the food industry if even a small percentage of people are like myself as it means I must be won as a customer every single time I order and can easily have any restaurant in my quadrant of the city (rather than just going to the local one).
This is so interesting to me because I just never use these services. I think I've ordered on Grubhub's website maybe once, and I've never used DoorDash or UberEats, and I eat a lot of takeout. Though I don't do much delivery and maybe it's really just down to that.
The context of these (perfectly valid) complaints often comes down to, "wow this is a parasitic business model and we hate these guys, but we have to use them" from the business owner, and I guess I've just never gotten how much of the market they've apparently eaten up.
I'll use the restaurant's own online ordering system (a lot of the ones I've visited lately are using the Toast POS system which seems to include online ordering, and I've used some of the apps and websites of the bigger chains), or call them, but the generic apps just seem like an unnecessary middleman and I can't quite get why I would use them, and that's without even considering that they're skimming off the restaurant's profits. It's also quite rare that I want "just anything" within some category vs. some specific restaurant.
I think there is a large portion of people, including me, that really just wants to maximize the reward to effort ratio of ordering from restaurants. The apps give you a one-stop place to filter on quality (reviews are generally good directionally), make it quite easy to get refunds if there are issues with your order, and streamline the payment/tipping process.
I’m in your camp. Don’t use it much. But not a heavy take away user in general. I have a preference for fresh food even if it’s McDonald’s (10 minute old McDonald’s is worse to me). I don’t even like drive thru much and they proliferate in Texas.
That said, when I order delivery (usually pizza), I just call. I feel like any amount of web/app UI, doing the ordering and account creation/management is a huge hassle. The telephone is easy and fast. It’s like Alexa except with a real human. Y’all should try it out /s
But seriously, I’m a little older (that weird pre-millennial gen), but I find it crazy/funny how extreme the younger generations avoidance of voice calls has become. I don’t like talking on the phone, but sometimes it’s the best UI.
I used to work at a pizza place and often times phone orders will actually disrupt the pizza making since pizza makers have to go take the calls if there aren't any or not enough delivery drivers (who are the primary call takers). It takes just one problem customer to hold up a pizza maker for enough time and cause a huge pain.
Not saying you're wrong to call though, just a little random anecdote.
I can't Google for a restaurant as the only thing I have decided is that I want to eat takeout food by the time I open DoorDash. So DoorDash is not only a mechanism for delivery, but it is a mechanism for selecting the food.
What you describe is a valuable innovation on the part of the platforms, though. They allow you to search and order a specific menu item, without wading through a list of restaurants guessing what may or may not be on their menu.
That’s true, they’re definitely creating value, and probably increasing total delivery and takeout revenue industry-wide. But I suspect that they’re capturing even more value than they’re creating, with the bulk of the difference coming out of restaurants margins, which were razor thin to begin with.
I don't believe UberEats engaged in this practice of fake online presence of local restaurants. They also did not reduce payment to drivers when customers tip, unlike DoorDash.
Yep, great perspective. We can apply it to Amazon and Netflix next, then the platforms where we get information - search results, news, social media, etc.
> when you order delivery from one of the large delivery partners like GrubHub or DoorDash - not only do you pay a delivery fee, service fee, and a generous tip to the driver. But we restaurant owners also pay...these fees can range from 15% to 35% of your entire order.
If these fees are too high, then why accept orders from these providers? If you don't get enough orders otherwise, then these services are providing value. If you do, then simply refuse to discount for these providers and handle the orders yourself.
This post, and others like it, seem like they're asking consumers to avoid these services, but it seems like it would be much easier for restaraunts to refuse to participate.
It's a critical mass service. Once they own enough of your (target) customers' eyeballs, you can't ignore them. It's pretty simple:
1. Buy ads aka eyeballs aka popularity.
2. Subsidize early adopters via advertising to help them outperform competitors.
3. Gain critical mass.
4. Charge businesses to advertise on your platform. Make sure you pass along the costs for step 1.
You could do the same thing right now with a lot of industries as long as you have some type of carrot to dangle in front of the early adopters.
Imagine building a landscaping website / app where the extra value is that people who are having a hectic day can click a button and have someone show up and cut their grass. As long as you advertise enough early adopters would see a bunch of extra business, especially if they can pick and choose jobs to saturate their schedule.
Word would get around and every landscaping business in the city would want to get in on it, but not many of them would consider what's going to happen once you've monopolized the supply of customers. Spoiler alert! It's the same thing that happens in this article. You start charging businesses to advertise on your platform because you control their customer supply.
These services will go out of their way to place orders against the restaurants will if they choose not to accept them. Even going as far as having employees call in phone orders while posing as regular customers.
So what? Then the restaurant doesn't have to pay a fee.
If the problem is that the delivery services are charging high fees to restaurants, then terminating the relationship with the delivery service solves that problem. If the delivery service wants to make orders like a normal customer without any discounts, that's good for the restaurants.
No, because by doing so, the delivery services are effectively injecting themselves into the middle of the relationship between the customer and the restaurant. Over time, most customers will launch the app when they're hungry in general or for a type of food, and if they don't see a specific restaurant there anymore but they do see competitors that have decent ratings, they'll just order from them.
That's a lot of businesses. The local liquor store "injects themselves" between you and Budweiser when they sell you beer. It's not inherently evil or unethical to act as a middleman, especially when you provide additional value that the original business does not.
Yes, the unethical part is stealing the Google search results, taking the tips from the drivers instead of distributing them, etc. All the stuff you heard about over the past years. If they had an ethical business, we wouldn't be reading this article.
There's no "stealing" or theft here. Based on this article, and the comments on this thread, advertising is part of the package/contract. Restaurants can simply not partner with these services.
The restaurant owners aren't knowledgeable enough in this area to understand the harm from the contracts, they're not dumb, but they don't realize the power they give to the company. That's an unethical practice, to take advantage of someone like that.
Restaurants don't always have the capacity to make delivery orders and may not want to deal with the logistics of impatient drivers coming in and demanding their food in the middle of a dinner rush. In some cases they've set up fake websites and taken orders for restaurants that don't even offer takeout.
Whatever their reasons for not wanting the business the OP's point was 'they can always opt out' which just isn't true.
> The “Advertisement” is much larger than our own “order” button where someone can order directly from our website or get directions to our location.
Doesn't this complaint ignore the fact that the first organic search result is Saddleback BBQ's own home page, complete with six deep links (including the "Ordering" link)? Text that directs user flow into Saddleback BBQ's page takes up about half the screen.
Search results differ widely between regions and users. FTA: "If a person in Lansing goes onto Google search..."
No reason for companies to target users outside the Lansing metro area, no one in Boston is ordering BBQ from Michigan. If you're not in Lansing, you're probably not seeing the same results as the people this post refers to.
Sure, but I'm not in Lansing (or anywhere near it). And both an incognito and logged-in search give me the same thing for the search query in the article. I'm not talking about the contents of the map sidebar; I'm talking about the big "Saddleback BBQ |" link in the main results and its children.
While it's true I do not see the ad (probably because I'm outside the targeting area), even with the screenshots shown in the article, there are two order buttons on the page that deep-link to Saddleback and one ad link. Their complaint seems to be "The ad is more eye-catching than [ed: one of] our order links"... Yes, but it's also flagged as clearly an [AD].
I don't think Google discourages this in any major capacity. I will say that Grubhub and DoorDash certainly have an ethical quandary. It certainly doesn't look good from a PR standpoint but I imagine it's a common practice.
Not a case that Google does but for Apple's App store ad system. I've worked at Lyft and I know years ago the top ad for searching Lyft was Uber and vice versa in the app store. Both companies would pay for advertisements against the other. But it was cheaper to trade jabs than defend your search term.
I still think that buying an ad against a competitor's brand in search (Uber buying an ad to show when user searches for Lyft and vice versa) is very different from the behavior shown in the article where the advertiser is literally using the restaurant's name in the ad itself to try to convince the user that the advertiser is the restaurant.
On one hand, you can do the responsible thing and link the user to what they wanted. On the other hand, you could make money. This is an unsolvable ethical problem.
Most tech/VC folks: DoorDash, UberEats, GrubHut, etc are great for restaurants!
Most restaurant owners: these guys are squeezing us of almost all profit margin with the argument "good luck doing any business without us" (platform fees are often 40% of the ticket, or more).
Follow any investor on Twitter. Any negative comment that reads like "delivery startups are bad for the restaurants" turns into "yes, but look at all the revenue they're bringing". The more I talk with restaurant owners (almost daily), I'm convinced that a competitor that looks like Shopify (mostly fixed cost vs huge % of the check) will come in. And they may be many of them, perhaps local (not nation/global-wide like today).
For those saying they don’t want to tip through the app because DoorDash keeps the tip. Choose Other and put $0. Give the driver a cash tip. I have a friend who delivers for Whole Foods and he says it’s better that way because the payout on tips doesn’t get borked in the system or slip into the pockets of the delivery service.
Yes I know we’re trying to avoid contact with items between people, but it could be easy to protect you and the delivery person with some hand sanitizer or wipes.
Pro Tip: For any company you really love that is smaller in size and not a global powerhouse, before you purchase, contact them and ask for their preferred purchasing platform.
For most restaurants, just call to place an order.
I keep seeing things like this, people hating on the delivery companies. Customers moving to takeout and restaurants moving to self delivery.
Its pushed me to have my quaranteen/layoff project be to create a competitor that supports only self delivery and takeout but has the order, management, aggragation functions, and crm of the competition for a low flat fee (plus cc fees).
Not to stop you from doing this because competition is good for businesses, but this exists. ChowNow is a commision-free piece of software anyone can buy for a flat monthly fee. Slice is a pizza-focussed app that charges a flat fee per delivery. I have no idea why they're so focussed on pizza rather than the general market, but do what you know, I guess.
Former Slice user here. They're focused on pizza only because they started as a pizzeria in Staten Island. They know their vertical. Part of the mission is specifically to help pizzerias.
I only stopped using them because I moved away from NYC.
I wish it was just this. A friend of mine works in an upscale deli here in Boston. Their employer doesn't partner with DoorDash, yet GrubHub --interchanged because they both do this-- still lists them. What happens instead of a printed order from their system? They instruct the delivery person to place an order at the counter, wait for it, and then deliver it. All this seems fine, if DoorDash wants to hire people to proxy face-to-face interactions so they can up-charge 20% for a caprese sandwich on ciabatta bread, more power to them. I understand the value of it. But it gets squishy in places.
What happens if an ordered and paid for item is out of stock? My friend's deli has excellent ciabatta and it sells out daily. DoorDash leaves this problem to the delivery-person, and delivery people can't cancel orders.
Why can't delivery people on GrubHub cancel orders? For the same reason that Uber Drivers can't see their fare's destination until they get in the car. DoorDash doesn't want their delivery people to cherry-pick only the costliest orders with the choicest tips. That would leave a good portion of customers without food.
So, the delivery people are left to call whoever ordered on their phone about this. If there's any confusion from the delivery person and their ability to convey the nuances of this problem --that GrubHub promised something they couldn't deliver-- then the delivery person is left to pay for orders that DoorDash users don't cancel.
My friend has been given more than one upset delivery person's phone which has an angry GrubHub customer on the other end. So, while a DoorDash customer may have wanted to avoid a phone call, the customer is now hungrier and upset at somebody who would have been able to sell them their sandwich for 16% less and had actual knowledge about what kind of bread was still available because they wanted to avoid the phone call that they're now having. Usually not a big deal, but if you're already working a crowded deli-counter during the lunch rush; it certainly cements the uselessness of these platforms.
It’s also a losing strategy long-term, because many of your existing customers will start just using GH to order, and eventually GH will own that relationship, not you. In the customer’s mind, “want food = Grubhub app”, not deli.
I worked for a restaurant reservation company I don't feel like naming.
Anytime the user had gone to the restaurants website, or used their website to make an online reservation, there was a significant reduction in our fee (like ~75%). That's because the user DID NOT use our network for discovery.
Using advertising like that to drive to a generic page where you show competitors first is really underhanded. I get that you want your kickback from Applebee's but c'mon.
A lot of this crap is just not fair to restaurants, and taking that HUGE of a cut from a restaurant AND gouging my ass in fees and then stiffing drivers in bullshit policies where my "tip" goes towards their minimum wage is horse shit (looking at you doordash).
Fully agree this kind of practice is disgusting on the part of the platform sites.
And yet as someone who will never use each individual restaurant's website -- same as for retail, I just don't have the time except if one particular brand becomes an overwhelming part of my wallet spend -- it seems we have to be eying for a world where we do have aggregators making all these places available in one stop, but which aren't actively harming their individual pieces. At least for folks in the same boat I am.
Everything remotely related to adware is just gross. It's hard to believe that after 10 years of this nothing has changed and the tricks are as dirty as ever. Totally unethical industry and I can't wait for the bubble to collapse.
How long have you been waiting? I think it is here to stay given how quickly it has become prevalent in real life as well as the web. We just can’t do anything as long as we are dependent on them for anything. It sickens me as well, but it can’t be avoided.
Relevant excerpt: "Grubhub generates a phone number for each restaurant on its platform, which redirects you to the restaurant's own phone line when you call it. However, they are able to charge a fee for that redirection. In some cases, Grubhub collects a fee even when a call does not result in an order."
"Grubhub phone numbers often appear higher in Google search results than the restaurant's own line, which can lead even customers who don't use the app to dial the redirect."
Wow, the entire advertising chain here looks like a completely unnecessary TAX on restaurants and consumers:
* A restaurant pays the advertising fee to DoorDash/GrubHub but the money is used to divert organic searches for the restaurant to DoorDash/GrubHub instead. The restaurant gets nothing for that advertising fee. In fact, it loses valuable organic traffic online.
* A consumer searches for a restaurant, but the first result is for a paid link to DoorDash/GrubHub. The consumer gets connected to these middlemen instead of the restaurant as intended. The search engine and DoorDash/GrubHub charge their cut for inserting themselves into the transaction.
The only term that in mind describes the act of extracting rents in exchange for providing no value or even subtracting value is... extortion.
When I first started using food apps I thought they were great, and never really considered the flow of money.
One day I ordered from a kebab place through an app, and went to pick it up myself. When I got there the owner asked me -- hey, why didn't you just call me? I replied that the app was really convenient, etc. He told me that the app was charging him 15% for my order, even though I was picking it up myself.
So that was an eye-opening moment, and I haven't felt the slightest urge to use a food app since, if I have the option to get it myself or if the restaurant has their own delivery service.
Yeah, the person on the other end of the line also wants the call to be over as soon as possible. There's no predilections of cordiality, you just say "pickup order", they say "OK", you list the things you want, they read it back to you, both hang up. It's awesome.
Sometimes there is a language barrier when calling on the phone that is just not there when you order at the counter (without a mask). Ordering at the counter these days (wearing a mask) is actually very similar to ordering over the phone. It is much more difficult to hear what the other person is saying, and when you do hear it, you don't get the mouth movement to help you understand what is being said.
1) We (technical people) need to stop being afraid to call companies evil. This isn't just an example of a company that does the profitable thing over the right thing - it's just an example of chosen behavior that almost always prioritizes profit over everything else.
Once it's socially acceptable to call companies evil, people will start being less surprised by behavior like this, and they can start to make more informed decisions. Using Doordash, GrubHub and Google should ALWAYS be considered a calculated risk. The same can be said for Yelp, Facebook and others. "Do what we say, or suffer the consequences of our indifference once our game is played out on you."
2) Anyone who writes something like this might consider spell and grammar checking.
On a more general level this kind of predatory behavior seems to the natural progression for internet conglomerates who specialize in connecting aggregate eyeballs / wallets to distributed vendors. It's not just delivery either, eBay, Amazon, AirBnb etc, they all absolutely squeeze vendors and there is no appeal process whatsoever if anything goes wrong with your account.
I wish there was a better way. It's quite sad to see how the internet has these seemingly intrinsic highways to organizational psychopathy built into it.
Oh this was happening pre-internet as well. Anonymous manufacturers get squeezed by brand labels, brand labels get squeezed by retail stores, franchise owners get squeezed by the franchise...
DoorDash and Grubhub might be the villains of this piece, but in general Google don't need any help to abuse the trademarks of small businesses. It's common (as in, I've seen this in multiple industries in small rural communities in my state) for AdWords advertisers to bid on their local competitors' actual business names, and thus appear above those businesses in searches for the exact names of those businesses. Then naive would-be customers are calling the wrong phone numbers and using the wrong driving directions. If they intended to drive to Alice's Donuts and end up at Bob's Donuts instead, they're obviously just going to buy something at Bob's. I think some younger Google users are aware of this phenomenon, but it's not a majority and above a certain age no one understands it. After all, on most phones the AdWords content is the only thing visible without scrolling. How many 70-year-olds can reliably scroll their phone, even if they know of the concept?
I don't know how this practice has failed to inspire class-action lawsuits. Perhaps Google can argue that they don't intend to make billions of dollars in this obviously illegal way and it should really be AdWords customers who get sued for trademark infringement.
An advertiser that advertises advertisers and monopolizes Google AdWords. I have the same thing in my industry where there are a couple of "directories" that sell advertising in my industry. They take the top couple of spots on Google AdWords. You click on their ad, and then you have a list of advertisements. This is a poor result for the end user. They have to click more times just to get to what they were looking for. Why can't Google just provide the best search results in the first place?
I don't get those delivery companies (Doordash, Grubhub, etc).
Even with a first-timer promotion, a meal would end up being close to 25% more expensive than ordering directly with the restaurant.
I'm happy to order directly with a local restaurant on the phone, drive 10 minutes (especially now with no traffic) and get my food on my terms. I end up paying way less and the restaurant keeps the full dollar amount. It's a no-brainer win-win situation. I wish more people would order directly with restaurants.
Some fastfoods, with quick preparations and basic food can actually benefit from services like DoorDash. If they don't like technology, are not marketing specialists, live mostly offline, then it can bring them many new customers. So I think it's up to the restaurant to decide. Premium restaurants may have money and skills to have their website with their delivery ordering system and returning customers. It varies, I guess...
This looks more like a huge oversight than a malicious decision. I can't think of a good reason why a company advertising deliveries for a specific restaurant would redirect to a listing of similar restaurants. As an end user that would really annoy me; it's not like I'm going to change my mind and order Applebee's instead.
The only other explanation is that Applebee's is paying the delivery companies a fee to capture SEO acquired by them, which would be really scummy.
I worked for grubhub. They absolutely put up google ads to capture traffic and redirect it to restaurants that paid for advertising. The entire business is incredibly scummy and manipulative. Grubhub also bought the domains for most restaurants and created fake websites so consumers thought they were ordering directly from the restaurant.
> it's not like I'm going to change my mind and order Applebee's instead.
Perhaps not Applebees, but it could happen with more similar cases. I know I have been recommended a restaurant, got distracted, and ordered from another similar restaurant.
I guess the idea is that once you try doordash, you'll want to stay there because you have more choices and better product. Doordash can control the whole experience as well as send you emails, push notifications, etc. to bring you back in.
> "We believe online diners are becoming more promiscuous," Grubhub CEO Matt Maloney and CFO Adam DeWitt wrote in a shareholder letter, noting that Grubhub diners were once known to be extremely loyal, but new diners have often already sought out a competing online platform
This is a classic example of how affiliate marketing is generally bad for businesses. For a local restaurant it may seem appealing to only pay for demand generated, but your partners are better than you at intercepting your existing demand and charging for it. If you have a trademark on the brand you would be able to get Google to take down the advertisements. If businesses are looking to generate demand, paying on a CPM basis via FB for example is a better outcome.
I think the author's frustration here is warranted, but it's directed at the wrong part of DoorDash/GrubHub's product strategy.
Advertising on competitor listings is a bread and butter marketing strategy that happens everywhere. If you're a BBQ restaurant owner, you want to advertise on your competitors' branded keywords because it's an obvious place to acquire new customers.
The underhanded move on the part of food delivery platforms like GrubHub, DoorDash, Caviar, UberEats, etc., is that they increasingly are nudging their users to completely remove the restaurant brand from the loop. Open up one of the apps and notice a few things about the user experience they're pushing:
- foregrounding "dishes" and "cuisines" rather than specific restaurants
- hiding/burying the ability to just browse a list of restaurants, instead opting for themed or algorithmically generated collections of restaurants and dishes.
I get the distinct sense that DoorDash, GrubHub, and the other delivery platforms want their users to think of the platform as the source of the food, rather than the restaurant. "Let's get some ribs delivered from GrubHub" rather than "Let's get some ribs delivered from Saddleback BBQ via GrubHub".
This makes perfect sense for a company operating a two-sided marketplace - you ideally want to become indispensable to both sides. Restaurants need to realize that the marketing opportunities the platforms are offering will only provide them value as long as they're not entirely captured by the platform. And since restaurants have much lower brand recognition and far lower marketing budgets, it's going to be tough to fight back.
It amazes me the larger world is just figuring this out. Dark business patterns has been every delivery company's #1 business model from day one, regardless of what they have been saying. Their behavior has always included these types of dark patterns. Why anyone uses these loud frauds has always been beyond me. And that goes twice for the people tricked into being a gig worker for them.
At the end of the article, they are saying they may do just that. It's also not clear to them that this will stop this particular issue.
> If they continue to use your name, issue a C&D order!
I don't own a restaurant, but I've worked in food service. If I were this guy, I wouldn't want to start a legal battle with a company that's much, much larger than I am.
> If they continue to use your name, issue a C&D order!
Not to mention it's probably in the DoorDash/GrubHub agreement. That's probably how they get away with using that trademark.
> Well, then stop partnering with them!
Say you hate books-a-billion and you want to only sell at mom and pop bookstores. Good for you, but what if that kills 70% of your revenue?
When talking about trying to make a living and pull in enough to stay afloat, these people often don't have the choice. You don't publish your ebook on Amazon Kindle and only on Barnes and Nobles Nook, you cut yourself out of a huge revenue stream.
Seems like a pretty clear-cut case of using branding that they don't own or have rights to, and that this is false advertising. But yes read the ToS to see if those terms are buried in there somewhere. Maybe the ad has "find food like that at Saddleback..." which would mean it's not technically false advertising if they take you to an aggregate/search page.
In some cases (not sure which companies) they do it w/o the permission of the restaurant and become a very frequent order-er who then hands off to the ultimate app-user. I read about this in the newspaper but could someone elaborate more on which companies do this?
the customer could have just gone to our website and ordered directly from our online ordering store and we would not be charged a commission to GrubHub or DoorDash.
Is there anything we can do to start a counter movement to help restaurants figure out how to get people to more reliably type in the name of the restaurant they are interested in and order directly? (Or some other work around? I would love to start an app for my small town that lists "What's open now" for example.)
I support gig work, but for various reasons I'm not a fan of services like DoorDash. I don't think such services are a good thing at all for anyone involved and I'm happy to support some means to give push back against such and try to find a way to help protect restaurant owners from these predatory business models.
"Conspire to screw" breaks the HN guideline about titles, so I've edited it to make it less baity. It's a bit generic now though. If anyone suggests a better title, we can change it again. "Better" means more accurate and neutral, and preferably using representative language from the article.
I investigated a case similar to this a few years ago (as an attorney). The problem is that most of these restaurants already signed contracts with the tech company that gave away a lot, including rights like this. And because it’s B2B, it’s hard to play the “unsophisticated consumer” card.
Anyone else find it peculiar that he keeps calling Lansing a small town?
It's not only the capital city of the state, but it's generally divided in peoples minds into the four cardinal directions, so North Lansing, South Lansing, East, and South. This is important because each area is not only fairly large, but is also very different culturally from each other.
In fact East Lansing (still Lansing!) is the home of Michigan State University. That's hardly what I'd call a small school in a small town. East Lansing is practically a city unto itself.
Out of the 300 municipalities in the state of Michigan, Lansing is the 5'th largest by population.
I understand he's trying to evoke a certain emotion, but to anyone who is even remotely familiar with the area it comes off as pandering and dishonest.
Many business owners are frustrated by this. Suckers will call GrubHub and DoorDash to complain. When you call them you are entered into a workflow where you are talking to a human or robot that is trained to do the minimum for you to prevent you from suing them. They are doing unethical and/or illegal things so they are prepared for pissed off people and this is an expense on their business plan.
Instead, just sue them. Even if you have to file by yourself, without hiring an attorney.
Reading a sad blog post is fun. But reading "I just sued GrubHub because they are violating me -- I'm not sure what I'm doing, can anyone else relate or help?" is front page news in the 21st century.
I tried the same thing in both Bing and Duckduckgo. In Bing there was no Grubhub and in Duckduckgo there was an ad in the sidebar that took me directly to the restaurants page on Grubhub (not a higher level page).
Was just curious to compare across search engines.
That google "business name" sidebar has got to go. I volunteer at "somerville open studios" a once a year event where artists open their studios.
Google has recently been showing the sidebar for "somerville studio" a photo studio. I get that google is confused and no amount of business registering seems to change that (we're a registered non-orofit, but don't have a physical space...) But they're showing the "Open time" and a bunch of sidebar info in the main feed (we're open at 7am.. but the event starts at noon).
When that sidebar works its kind neat, but when it fails it fails spectacularly.
If you don't tip cash, GrubHub takes back the hourly they pay the driver.
Say you get $10 an hour delivering for GrubHub. You earn $10 in delivery fees and credit card tips in that hour. How much do you think the driver gets? It's $10. GrubHub gets to say "your whole tip goes to the driver!", But never says they claw back the drivers hourly making them free for GrubHub to employ.
Tip cash, or literally don't tip at all. I never saw my credit card tips the whole year I worked for them.
The post seems to misinterpret that Doordash + Grubhub are somehow in cahoots with Google to skim off of restauranteurs. What Doordash & Grubhub are doing is an extreme form of "growth hacking" that doesn't have any considerations for the collateral damage it creates - they should be held accountable for that. Google here is just the provider of a tool that they abuse, they need to work on ensuring that this form of abuse should not be possible.
To deduce that there's a conspiracy between Google + Doordash is taking it a bit too far..
Whoa quite the surprise to see this posted on hacker news. I used to work with Travis for a few years. He was pretty much never in the office and if I did see him, he was usually hiding in the fish bowl.
I also lived in Cherry Hill Downtown Lansing for three years about two blocks from Reo town. The food at Saddleback was decent but never knocked my socks off. Now crack chicken, east side fish fry, astros pizza and Olympic broil, those places had some food that brings back memories
"They are redirecting those customers to their platform where they can purchase from a competitor or they can charge us a fee to provide food to that same customer. Whereas the customer could have just gone to our website and ordered directly from our online ordering store and we would not be charged a commission to GrubHub or DoorDash."
Here he refers to Grubhub and DoorDash as "competitors" with the restaurant.
Yet at the conclusion of the story he refers to them as "partners" with the restaurants who pay them.
"DoorDash and GrubHub have a long history of screwing their partners."
These companies are "middlemen". That description in fact fits a large number of "tech" companies. It is a common theme when we look at the "tech" industry.
A few days ago food delivery, including Grubhub, was discussed on HN.
One commenter argued that companies like Grubhub exist in "fake markets" that would not exist were it not for VC funding.
Another argued that these markets are not fake because these companies have managed to be profitable and deliver returns to investors.
Not sure what you all have experienced, in my experience with restaurants and delivery, the owners always seem to prefer customers who order directly from the restaurant, not via a middleman. However, I can sense that they feel compelled to sign up with the middlemen for fear of losing business.
HN commenters seem to enjoy comparing first page search results on Google versus alternatives such as DDG. Try this one out. Search for your favourite restaurant. On Google, I see more middlemen than I see on DDG, including a result for "[restaurant-name].business.site" which I believe belongs to Google. I don't see that result on DDG.
Imagine if the telephone book Yellow Pages listed multiple numbers for each business, some of them not belonging to the business but to middlemen who would "make calling easier". Even more, imagine it changed the order of the listings according to a "secret" methodology instead of presenting them in alphabetical order.
> The problem is that if we cancel, does that mean they will actually stop stealing customers that are looking for our restaurant and directing them to our competitors?
At least in this scenario, since there's no contract and no advertising agreement, Saddleback could sue them for trademark infringement if they keep advertising using the Saddleback name. Of course, lawsuits suck and cost time and money that I'm sure the owner doesn't have to spare.
This is really frustrating to read and I know the importance of ordering direct when you can, but the hardest part for me was trying to find restaurants around me that actually offered direct online ordering.
What’s amusing to me is that many of these techniques were well documented on Blackhat SEO forums circa 2010. These companies just normalized and scaled them.
Wow, this is unbelievably blatant. How can they even use the advertise the restaurant without their consent on Google?
These ads almost look like spam to me like those old internet generic ads.
Most people wouldn't click those, and even if they do, they would back off after all they see is a generic landing page which is not about the original restaurant they were looking for.
This is happening in other industries, too. Google have recently launched a Hotels API where hotels, B&Bs, vacation rentals, etc can upload their prices and other data to Google, and Google will decide when to show that info to the user. So searching for "hotels in New York" will now be fronted by a giant Google widget that will capture your traffic and not a list of hotel websites.
What's wrong with that? Hotels make money from people booking, not being on their website. If this helps people find what they're looking for and convert into a stay, that's great.
The user doesn't see their website. The content is loaded to google, google gets advert traffic, etc. etc. as well as the stuff outlined in the article. That's what is wrong with it.
There are thousands of hotels in New York. Nobody is going through thousands of links, unique websites, retyping the same dates and details into different forms. They’re going to the same top website that paid the most for SEO. The user doesn’t want to see their website. The user wants to see all the relevant details of all the options that match their criteria so they can hand over their cash to the best one, not the one that has put the most money into building a website. That is what modern search is. That is what Google is doing.
I was under the impression that it was against Google's ad rules to use the trademarks other than your own in your ads. Are they not applying their own rule consistently to these food delivery services?
Is there a way as an end user I can filter out all results driven by DoorDash, GrubHub and the likes on Google Search? Or perhaps would I be better off using DuckDuckGo?
Seems like this might be neat browser extension to help people get search results that point you directly to a restaurant website. Perhaps following the ad blocker concept; restaurant middleman blocker.
If I wanted to start a grassroots local competitor for collecting delivery orders without screwing over restaurants, what would be the best way to handle payment processing? Using Stripe + manually sending money via ACH doesn't sound sustainable. Would AML/KYC laws start to apply for this sort of thing?
Why do these gig companies have to function like racketeers? I don't understand why everyone from Grubhub to Uber to Airbnb feels the need to "take a piece of the action" in the way they do. There are smarter profitability models, it's just so lazy.
Might be a specific issue for this restaurant. Tried googling several restaurants in SF that are open at the moment and the link from google to the delivery company goes directly to a page for that restaurant, not a generic page for the type of food.
Does the contract with DoorDash and Grubhub allow them to use the trade name? Regardless, if Saddleback BBQ does cancel, I would assume it would be very much illegal for DoorDash and Grubhub to advertise using that trade name.
How much in a restaurant's cost is (food and its preparation) vs (rent, decor, service and marketing)? I bet less than a half. If they only had a kitchen, they would be totally ok with this arrangement.
It's the state capital. It may not compare to the antics of stay-at-home protestors, but your insistence on describing the city this way when surrounded by so many ACTUAL small towns is still pretty embarrassing.
I can understand the author's frustration, but that's a doordash ad, not a Saddleback BBQ ad - it's unrelated to the advertising fee that the author pays to be on the platform from my understanding that fee is for appearing in searching on the platform.
The ad on google is for the platform itself. Doordash paid google to pick out queries with words like "bbq" and redirect them to doordash queries for "bbq". That has nothing to do with saddleback BBQ -- except, that for some awful reason, the ad is placed in the sidebar full of saddleback BBQ information instead of the main search results.
I'd say this is less conspiratorial and more evidence of incompetence. Still, I feel for the author.
The restaurants are equally to blame here. It didn't take long to realise that it's more profitable to deliver food to a broader audience than just serve 15 table each evening. Very few restaurants knew how or were willing to invest in marketing,internet reach and so on. Now a lot of them are no more than a nice thumbnail in these websites. I don't even know where those place are- all I know is somewhere within a few miles.. However, having written all this,the type of stuff mentioned in the article isn't doing any favours to anyone.
Seems like this is a Google problem more than DoorDash or GrubHub, because it's google that allows people to advertise against your own business name.
So that's the legal question- what part of your own name do you own on a third party platform? And what if that platform (google) has a monopoly on web searches?
as of ~15:45 PDT 5/15 searching saddleback bbq lansing on Google and DDG the links in the advertisements go to the restaurant's website, not GrubHub or DoorDash for me
This is just how Adwords works. Funny, Google seems to have removed ads for the BBQ keyword. Doordash was just putting up ads for any query that contained the word "BBQ".
Startup capitalism seems quite different from traditional capitalism. Instead of profitability, the main qualification for a successful startup seems to be a good story for investors. Then, with VC money in hand, traditional pricing signals can be distorted by subsidizing the service - sometimes for years. Whether the big business that results at the end of this process is viable, valuable, or even desirable to customers is impossible to tell until the subsidies run out and the startup has to try to make a profit. At that point no alternative may exist because smaller, independent competitors have been driven out of business by a series of VC-fuelled market distortions.
I don't think the average restaurant owner who may not be very digitally savvy realizes how these companies piggyback on top of their brand. I predict that soon there will be a large class action lawsuit with thousands of restaurants going after the delivery services for these underhanded tactics.