> You have insanely large pools of capital creating an incredibly inefficient money-losing business model. It's used to subsidize an untenable customer expectation. You leverage a broken workforce to minimize your genuine labor expenses. The companies unload their capital cannons on customer acquisition, while this week’s Uber-Grubhub news reminds us, the only viable endgame is a promise of monopoly concentration and increased prices. But is that even viable?
Inequality is driving this. We have let money become so accumulated, that the owners of the capital are being silly with it at the same time that workers are having a hard time. We have to tax this capital and make it work for everyone.
So, direct wealth transfer is happening from the rich to the poor.
The only flaw with this is that people have to work economically inefficient jobs delivering food, instead of the wealth transfer occurring through taxes on the rich and funding something like basic sciences.
Yes, breaking a window allows you to generate economic activity by paying the manufacturer to create a new one and paying an installer to install it, but it's not socially useful economic activity. You could have spent the same money building excess renewable energy resources, or on basic science research, or a million other things that might be equally "inefficient" from an investment standpoint but at least have a chance of providing benefit to society.
It's a serious flaw and not one that can be waved off as easily as you do.
I've heard of the "broken window fallacy", and this seems an incorrect representation.
The fallacy is that breaking windows must have an inherent value (and the fallacy is that its a good thing to have vandalism). Part of the justification that it might be otherwise is the benefit of having window repairmen, and how they couldn't exist if they didn't have a steady income - and it's here that lies the fault, however the fault is one of quantification, in fact a broken window can be socially useful, just with decreasing usefulness as quantity increases, plus there are better ways to do it (e.g. insurance payment); It's still true that (in an unmanaged market) if (somehow) there aren't enough broken windows, when one breaks there might not be anyone who can repair it (economically) - I think it's the same category of problem as, donating clothes to Africa destroys its own textile biz.
In the case of food delivery, there's socially and economically useful work of getting food from where it can be efficiently created (restaurants) to where it can be efficiently consumed (hungry people's location). In the absence of that work, the hungry people would be making their own food (less efficient, generally, than restaurant cooking which can do larger batches) or going to get their own food (less efficient, at least plausibly, because a delivery worker can make multiple deliveries on one drive rather than a strict out and back trip that people would take).
The thing that makes fixing a broken window "fake" economic growth is that it is arguing that destruction is economically useful because of the work to fix it, but nothing's being broken in this case. People are naturally hungry on a pretty regular basis, and the production and transportation of food is economically and socially useful work, which in this case was being subsidized by capital.
Is it curing cancer? No, but it's not digging holes and filling them up again either.
If restaurants were more efficient, then why are restaurants (1) more expensive, (2) using worse ingredients, (3) taking longer, and (4) have questionable quality.
Granted, I'd understand if in the good-fast-cheap triangle, you lose one, but with restaurants, most are questionable quality, take longer, and have gotten expensive.
I can make better food faster with better ingredients for a cheaper price at my own house for my own family, as long as we did some thi king ahead and planning. On top of that, when I make a new recipe, I learn how to make something new with new ingredients that helps me do more exotic dishes in the future.
It's not entirely clear to me restaurants are the theoretical economic efficient location that is claimed. Even if you use fast food, their prices have gotten higher and quality even more questionable on the already garbage quality they had.
It seems to me there is more efficiency in people learning to make their own food, and cooking better at home - both in the results and the discipline on the person. Sometimes decentralization is more efficient than centralization, and I think this is an example.
I will say optimizing grocery delivery makes alot more sense ro me than restaurant delivery.
>I can make better food faster with better ingredients for a cheaper price at my own house for my own family, as long as we did some thi king ahead and planning. On top of that, when I make a new recipe, I learn how to make something new with new ingredients that helps me do more exotic dishes in the future.
Can you? Are you accounting for your labor cost?
I do a lot of cooking for my family too, but when I account for the time it takes to shop for groceries, prep, cook, and clean up, I doubt I'm making even half of what I make in my job. It would be more economically efficient for me to cook only very simple things, work more hours, and have more food delivered.
There are a lot of reasons I don't do that! I agree with all your points about self-sufficiency, and health, and personal development. But I disagree that those are "efficient". Efficient is labor specialization: I spend more time writing code and hire someone to do the cooking and cleaning and transporting.
How do you figure? I still order pizza, pay a small delivery fee and tip, and receive my order in around 30-45 minutes. I haven’t noticed a change other than I no longer call a store to order and I can get pizza delivery from places that didn’t deliver before.
I've never seen a DoorDasher show up with a proper insulated bag. The pizzas are cold. They've been on who knows what route delivering orders from who knows how many restaurants. They slide around, aren't kept level.
I had an order where only 1 out of 5 pizzas showed up. The driver didn't speak English, but it wouldn't matter if he'd been able to. Because the driver isn't empowered to help in any way. They don't represent the restaurant, and everything has to go through DoorDash customer service.
Getting my refund took 4 phone calls, multiple online chats, and 30 days.
We've had scam industries like this for ages... If you're old enough there's Time shares, Amway, numerous companies that have sold fake health supplements etc... It hasn't resolves anything beyond money and work being extracted from people with no reward. Valid business, like taxi cabs, are destroyed by Uber and door dash, and the people that work for these services get ripped off. Many of these businesses are purely exploitative.
Even Dominos is using 3rd party delivery services now, instead of hiring drivers, it has made their prices skyrocket on top of already ridiculous inflation. It even prices people out of being able to afford pretty much D-class pizza. Even if the model melts down, the original (more valuable) business model may be so decimated that it won't be able to be brought back.
Our world is suffering from trust funders with bad and amateur business ideas, all trying to become market-cornering monopolies, it's long overdue to encourage them to find better and less destructive idea builders and better ideas by others to fund instead of launching poorly though out and highly exploitative profit schemes.
With these food delivery apps they managed to make a system where everyone loses. It’s astounding. When everyone is paying more, while earning less, I’m not sure how the problem fixes itself.
I think these apps just need to go away and business that want to offer delivery can go back to how it used to be done. It was cheaper and better.
IS it cheaper? Better, maybe, depending on the restaurant. But I can’t see how it’s cheaper when you have to hire and insure drivers, manage shifts, deal with delivery areas, fuel costs, more accounting, etc etc.
Also I live in a pretty good sized city of about 350k in our metro area, and before these delivery services only the national pizza places delivered. When I moved here from a larger city I was shocked there wasn’t a single Chinese delivery place. So I’m thinking that the costs and management were just too high.
The right model might be the Waiter on the Way model, which hires regular drivers but can offer the service turnkey. But there needs to be more of those, and there doesn’t seem to be for some reason.
>Also I live in a pretty good sized city of about 350k in our metro area, and before these delivery services only the national pizza places delivered. When I moved here from a larger city I was shocked there wasn’t a single Chinese delivery place. So I’m thinking that the costs and management were just too high.
This is interesting. When I was in college I could order Chinese delivery from about 5 different places, and they'd do it until about 4 or 5am. This was in a city of about 78k. After school I moved to another college town. It was double the population with a much more well known school. In this town, I don't think there was any Chinese delivery, and a vast majority of the places closed really early for a college town; maybe 8-10pm.
I wonder if smaller towns with lower rent leave more margin for extra hours and delivery, where as those with higher rents need to focus on staffing the core hours with as few people as possible to make the books balance? Just a theory, as I've never worked in these industries.
Near me, I still see Dominos doing their own delivery, with their corporate owned vehicles. I also see some local pizza places doing their own delivery as well. Jimmy Johns still does its own delivery as well, even if going through Door Dash, they just hand off the order, it doesn't go through the normal Door Dash process.
I lived in a tiny town in Northern Ireland and every chinese/indian/pizza place managed to deliver food just fine. They still do I bet. UberEats/Deliveroo/DoorDash are just skimming the little profit that these operations made (and failing to be profitable)
Am I right in thinking that if those employees save any of the money, then they accumulate wealth, but if they don't (because they don't receive enough compared to their fixed costs, or for any other reason) wealth accumulates elsewhere, probably in the hands of plutocrats?
Just because one person wastes money, it doesn't mean that someone else gets rich. If the employees spend their income on low-margin goods or services (food and clothing are quite competitive low-margin sectors with high labor costs), the money has flowed from investors mostly to laborers.
My thinking is that spending gets split between richer and poorer people. The former buy assets with it, but the latter spend it on living costs. Each time it circulates, typically some goes to richer people and stops circulating.
Various things could disrupt the resulting increase in inequality. The Black Death and World War 2 are both supposed to have done so.
Money doesn’t really get “split”, it flows, and the where it goes each time it is spent is what determines who makes how much. You’re right that some people are able to accumulate, but that’s not a default, and the money usually doesn’t stay put for long.
Ultimately it's driven by customer behavior. If people went to restaurants instead of expecting to be served hot food in their living room, this whole destructive business model wouldn't even exist or would be small enough as to not be negatively impactful.
People are not forced to use DoorDash, UberEats, etc. We never do and are surviving just fine.
Food delivery has been a thing for a very very long time.
The problem here is that there's a $45B company (doordash) in the middle of the person cooking the food and the person delivering the food instead of a high school kid in a funny hat.
Exchanging the overhead of a dining room for the overhead of unskilled labor taking food to a place is an easy win for a restaurant. Doordash and the like are taking jobs that you could train a child to do in an hour (take an order, deliver it to a place) and spending billions on the technology to do instead while still requiring unskilled labor to do the job.
This is the kind of software that needs to be a small scale distributed open source affair instead of a $45B company with several competitors at the same scale.
They started selling their product as if it were basically free by burning investor cache and now they're riding the limited rails of brand recognition and habit while trying to charge for the ridiculous amount they're doing for such a simple task.
> Food delivery has been a thing for a very very long time.
> The problem here is that there's a $45B company (doordash) in the middle of the person cooking the food and the person delivering the food instead of a high school kid in a funny hat
> This is the kind of software that needs to be a small scale distributed
Related: a few years back before DoorDash and the like exploded in popularity there was a local company near me who tried to start a food delivery business. They lasted one summer (busy) season and then made a post on social media about how unsustainable it was. These services (Uber/DoorDash) are only seemingly viable because of the mountain of "investor cache".
There are food delivery companies, such as Toast and ChowNow, that seem more restaurant-oriented. As in, they sell an online-ordering-platform-as-a-service to restaurants (sometimes bundled with a POS system), rather than gunning for market dominance on the consumer side of things.
I think that's probably a viable model for the future, assuming they don't have VCs that will push them to squeeze restaurants like the big apps, at some point.
> Food delivery has been a thing for a very very long time.
But not at this scale; it was always a side offer from a more select number of restaurants catering more to pressing needs than an "immediate satisfaction" culture driven by same-day shipping.
The delivery service in my area has no competition. You order from their version of restaurant menus on which the prices have been jacked up. Then you pay a delivery fee. Then you pay a service fee. Then you have to deal with drivers making minimum wage who can be surly if not tipped enough. It more than doubles the price of a meal, so few people use it.
Is this DoorDash's plan once they've driven their competitors out of the market? The market will shrink and it will take quite some time to recoup their expenses. Maybe that's okay in their books. Own the whole pie even if you shrink it.
You know, I do go to restaurants, and DoorDash is making restaurants worse. They're becoming DoorDash focused and the dining room experience suffers.
Even picking up your own food is becoming destroyed. Orders get made with no regard to the estimated pickup times you used to be able to rely on. Your order might get made immediately and just tossed onto a pickup shelf where it sits getting cold for half an hour.
This is all because DoorDash guarantees absolute shit quality and accuracy. Cold food, wrong orders, and they've trained people to not complain by threatening to ban you from the service. So instead of the son of the owner of the pizza place rushing right out to make your order right with an apology, you just accept that an 80% correct order is OK.
A whole generation of young adults has come of age with this thanks to COVID, so we're just stuck with it now.
> Ultimately it's driven by customer behavior. If people went to restaurants instead of expecting to be served hot food in their living room, this whole destructive business model wouldn't even exist or would be small enough as to not be negatively impactful.
No, you've got that backward. Customer behavior is driven by the tides of capital. Advertising is a pretty clear example but it's not the limit. I mean, how many people were ordering DoorDash before DoorDash existed? I'm not being entirely facetious - it's impossible for customers to behave in a way that's not allowed by the market.
That you are resistant to these tides is not evidence against, it's just accounted for. You're not the target audience. Nor am I. But neither of us has ever made a decision in a vacuum; we choose our purchases from what's available, according to the information we're exposed to.
> Customer behavior is driven by the tides of capital
Source?
The best argument against this is how elastic demand was when ZIRP ended. Customers responded to an underpriced product. When the price was raised to a profit-clearing level, it no longer cleared most of the market.
> sounds like customers were reacting to their environment more than driving change
It sounds like customers had agency. Tides of capital gave them more or fewer options, and they chose them at their discretion when the terms were advantageous. When they weren't, ever or any longer, they didn't.
...In other words, because DoorDash is convenient and advantageous for customers, they choose to get food delivered instead of go to the restaurant. And admonishing people for choosing the advantageous option is useless, at best. Does that not follow?
You argued "customer behavior is driven by the tides of capital." That's attributing cause and effect. The tides of capital didn't cause the customer behaviour, it enabled existing behaviour to scale. Capital driving behaviour describes diamonds, not DoorDash.
There is no doubt that advertising has a huge impact on customer behavior. But that doesn't mean that consumers are incapable of making choices that go against the grain of the market. It does take a conscious effort, and it's true that most consumers just don't care or can't be bothered with it, or are crushed by too many other things in our modern society to have the bandwidth to even consider their choices.
Everything you're saying is exactly in accord with what I posted. Individuals always have choice, but when we're looking at an entire population and seeing that large amounts of people are making a choice that we think is "bad", saying, "Well people just need to stop making bad choices. People are stupid. I make good choices." is ludicrous.
Let's assume that the answer really is to ensure individual choices are changed. Who's going to go house to house and educate everyone about why the choice to use DoorDash is problematic? Does this person have the time to customize their solutions to every family's needs? It's insanity. It's an argument that leads nowhere at all; it's an abdication of responsibility (which is totally unnecessary, because the commenter never had a responsibility to change the situation). Hell, it's a call for the audience to also abdicate responsibility they might feel. It's just a useless or harmful way of telling listeners how proud one is to be a statistical exception.
>making choices that go against the grain of the market. It does take a conscious effort, and it's true that most consumers just don't care or can't be bothered with it
No, it's not that most people are interior and follow the market, it's that the market literally is what most people do. If everyone "went against the market", they'd just have moved the market.
I hear this a lot but I don't think the "lazy AF people who also are terrible at personal financial management" is really fair.
I order delivery through the apps a ton, but it's not because I'm bad at financial management. Like many here, I have a well paying job that takes up a ton of my time and energy during the week, and cooking every night is simply not feasible. Takeout is expensive, sure, but if it enables me to hold down a job that let's me afford it, it's a conscious trade-off that I can make.
Could I spend more time meal-prepping and freeze meals instead? Sure. But again, time and energy.
Won't blowing money like this redistribute it quickly, taking care of the "inequality"? It looks like this is a good way to take wealth from people who have accumulated it (the investors) and disperse it widely.
Burn a billion dollars. Artificially pump the market value of your company by 10 billion dollars. Pizza company gets a few hundred dollars for free. "Haha, we pulled one over on the man!" Go public or sell. Founders and initial investors (likely already wealthy) get billions. Other people take the hit.
No, this does not distribute wealth down. It's a ploy to gin up enough excitement that people who are already wealthy can expand that wealth dramatically with weak business offerings while leaving other people (smaller investors, employees, customers, other businesses, the government, the public at large) to hold the bag.
Not every start-up is like this, but a lot of 'em sure are!
Who the hell cares? When I pay for things I have no interest in thinking about where things are trickling or not. If ten years later DoorDash/other delivery services still have people willing to pay for the service and people willing to deliver the orders for what they are being paid, then the business seems reasonably viable to me.
Any “redistribution” is in the form of wages, so it’s income based in the exact opposite direction of what people want from wealth redistribution, or think of when they say “wealth redistribution”.
C suite gets giant cuts, office workers get medium-large cuts based on career, gig workers just have a new type of low-wage part-time labor to fill their hours with.
Money technically changes hands, but calling the existence of a company with status-quo wages “wealth redistribution” is really taking the term too literally.
But the whole point is that in this case the money is not accumulated. Lots of different companies are each spending a lot of money in the hopes that they will be the last standing, at which point they will get to accumulate the money.
It's possible that if one company does end up with a monopoly, they will treat their employees better. Because then they will finally be able to charge higher prices to the customers without losing those customers to the other more exploitative businesses.
Right, they must have accumulated the money beforehand. But what they are doing right now with it is the opposite of accumulating it. They are taking the money that they previously accumulated and spending it on lots of random bullshit.
Suppose you were to discourage accumulation, with a tax for example. Wouldn't that lead to investors investing in even more random bullshit?
> It's possible that if one company does end up with a monopoly, they will treat their employees better.
If they can get away with paying employees so little, why would they voluntarily pay more as a monopoly? (Presumably they wouldn't have a monopoly in the labour market, in which case I would expect pay to remain the same, rather than worsen.)
> This is very argumentative and shuts down the discourse before it even begins. It's not very in the spirit of HN.
There cannot be productive discourse where people advocate forcefully taking things from other people that worked hard to earn the things.
The spirit of HN is entrepreneurship. It is literally run by a VC business - not for the goodness of their hearts or whatever, but to foster a community of thinkers and doers. This line of thought is toxic and antithetical to everything YCombinator stands for. It's just a shame it's being coopted into such an anti-entrepreneur place largely by those who think so little of themselves as-to believe they'll never be capable of being thinkers or doers.
You don't need to be the next Bill Gates, or next Uber to be successful and build things of value. But if you ever do, you'll have a ton of people wanting to tear you down just because you dared to be successful.
> you'll have a ton of people wanting to tear you down just because you dared to be successful
The article describes DoorDash intentionally deceiving its customers to gain their money, and wilfully depriving the restaurant owner of control of their brand. That's fraud. It's perfectly fine and in the spirit of HN to debate how contributes to measures of success.
This is common across so many industries now. The number of people stressed by student loans, childcare, and other typical expenses is extreme. It’s easy for someone to appear more productive by having fewer or no kids - but disastrous for the economy in the long run.
How much of the recent US economic growth can be attributed to monetization of public and private balance sheets?
Not everyone who takes on this debt is "the smartest and most privileged members of society", and childcare costs are outrageous (according to several families I know; I haven't felt financially secure enough to have my own progeny and at this stage in life it seems unlikely I'll have the opportunity).
That's why I said "it's hard to compare them". One of them is a true problem, and the other is a debt that fully informed, smart people elected to take on and plan for.
Nobody is fully informed about anything, whether parenting or deciding to assume debt for potential education. Not everyone who goes to college is smart in all aspects(including finances), and not everyone graduates college. These are both true problems whether you choose to acknowledge this or not.
> fully informed, smart people elected to take on and plan for.
In practice, this is completely false. When I was about to graduate not too long ago, there was an entire cottage industry of (perhaps unwitting) propagandists pushing student loans on highschool students as a "no brainer" investment. "You'll make the money back in 2 years, tops! Now go and find yourself"
Placing blame on any of those students who were not able to make the money back quickly and are now struggling is either a display of ignorance or lack of empathy.
Not in Australia. No hot bags for any orders including Pizza. It drives me nuts, I never order really now. It’s not cold enough for the food to be stone cold, but it’s like warm at best. Not enjoyable at all.
Using a standard supermarket freezer bag makes a HUGE difference.
I don’t understand how it’s not a hard enforced requirement by doordash, Uber eats, etc. It’s nuts. I have seen it more common in other countries where it gets colder. They’ll have branded delivery bags. Though more often they are also bike couriers rather than cars.
Especially since they so often drop two orders now.
Food safety laws don't impact the end customer. You can legally take ham out of your fridge, leave it in the hot place for 24 hours and eat it. You just shouldn't.
Does this still apply? I used to use DoorDash a lot, and I remember in the early years, all the dashers had DoorDash-branded bags. As the years went on, it seemed a lot of dashers no longer had any bag or just didn't use it. Maybe it was the latter, but it also feels like one of those price cutting measures that a successful startup starts making. Like their customer service which went from fantastic to terrible to not even talking to anyone, but getting refunds denied for no particular reason.
Reminds me of my old employer. I was subcontracted to work on the controls network at a wastewater treatment plant and the PPE they issued me seemed like it was intended for elementary school students. Everything I needed was at the hardware store for around $15 total so it's not like they even saved that much money.
Is this not how every decision is make at a business? Yes it's more personal because of the word rent but "no we can't do this because the in the slowdown we wouldn't make enough sales to pay our employees."
I'm surprised people are siding with the restaurant owner here who's a millimeter away from just being a dick and making demands of a rando who he's not the boss of. Making "damaging my reputation" a thing just invents the very worst of copyright but for restaurants. The only thing objectionable about the interaction was the delivery app giving the impression they have a relationship with the restaurant when they don't.
Giving the impression they have a relationship with the restaurant is exactly why it's damaging the restaurant's reputation. The distinction you make doesn't exist.
The act of sending a dasher to a business they don't have an explicit relationship to deliver their food -- totally fine. The app not making it clear that the restaurant isn't partnered with DoorDash and that they're placing a pick-up order and delivering it to you -- not fine.
Making "damaging the restaurant's reputation" a thing is absurd in all aspects. By the restaurant owner's own logic picking up my own order without an insulated bad shouldn't be allowed -- after all what if I get home and the pizza isn't as good because it's cold? That could hurt their business. Utter nonsense. Do we now have to decide whether "it's fair" that something potentially hurts their reputation? Is a bad review fair if it's about the food, but unfair if it's about the wait?
What DD did is bad because they impersonated the other business, not because people got soggy fries. You stop getting to curate the dining experience the moment they walk out your door.
I'm surprised more restaurants aren't suing DoorDash for damage to their reputation.
Inserting themselves unrequested into the ordering process, then delivering cold food, the wrong food, etc. the customers just blame the restaurant ultimately.
It's been worse -- they've been caught setting up ghost kitchens in the name of real restaurants that didn't offer delivery or take-out service, and siphoning off order flow. One Michelin-star restaurateur found out about this when she got complaints about a delivery order placed to Seamless, which was pretending to offer delivery from her place, but was actually a ghost kitchen she'd never heard of ...
I'm surprised health departments aren't shutting down doordash. There are actual food safety rules to ensure food has been kept properly, kept at proper temps, kept in sanitary condition, etc.
It was posted yesterday to reddit on "Today I Learned" and got over 59,000 upvotes. I knew I had seen it here before and now I'm seeing it here for the third time.
Door Dash/Seamless/Uber Eats, etc. have driven many low-priced restaurants out of business here in New York City many of which had long traditions of providing delivery services for their food by inserting themselves as middlemen and taking all those restaurants' profits and more.
I realize that in many places, they provide services that never existed before, but here in NYC they've driven hundreds of wonderful mom and pop restaurants out of business while they lost billions.
Those entrepreneurs who ran successful businesses for decades were forced out of business, as their quality, inexpensive food (especially in an expensive place like NYC) only netted them 5-10% profits, which were more than eaten up by the 15-30% charged on every order.
I'd rather starve than give any of those jerks a nickel.
I don’t understand what you are saying here. Are you saying that these “wonderful” restaurants were doing their own delivery until Uber eats etc came along? If so, why couldn’t they just continue with what they had been doing?
> Those entrepreneurs who ran successful businesses for decades were forced out of business
If you can’t adapt to a changing market then you may not be much of an entrepreneur. Regardless, I’m not sure how much delivery services affected these businesses vs “the rent is too high”.
> What's with all the people that talk or even brag about how much money they make doing ridesharing, food delivery, etc?
Got any examples?
I can think of a few possibilities:
1. I wouldn't put it past a company like Uber to pay to produce propaganda where someone lies about much money you can make driving for them. After all, a steady surplus of naive and enthusiastic drivers is essential to their business model.
2. You might have some schmuck doing that for the for free, by trying to brag about themselves as personally successful on social media (either for ego reasons or just trying to get clicks).
3. I think a lot of the drivers are "misinformed, bad at math." I've read it's pretty common for casual drivers to be totally ignorant of some of the major costs they're paying indirectly (e.g. not factoring in the wear and tear on their car or (more egregiously) fuel costs).
4. Being a rideshare/food delivery driver may be profitable if you're really savvy and have unusual advantages (like you live near a stadium and only drive after a baseball game during maximum surge pricing).
Likely they don't calculate how much they are making after expenses or don't understand how expenses work.
For example, a reddit post I read a little while ago (can't find it again) the person said they do ride sharing so got to take a lot of deductions on their taxes so they said "on paper" it "looks like" they make "much less" than they "actually" do.
The comments rightly pointed out the poster's "on paper" income is their actual income, because they are deducting expenses they paid and it wasn't an accounting trick.
There could be some truth to this based on the vehicle you drive.
The IRS gives a flat per-mile deduction, which is an estimate of fuel, repair, maintenance, and depreciation costs. If your actual vehicle expenses are lower, then you are making more money than your taxable income.
Sure, you might be ahead a bit more than "on paper" but you still have significant expenses that were actually accrued. The context of this post was the person thought their "actual" salary didn't include their (significant) expenses and being eligible for deductions was just a bonus. They argued in the comments their salary was "really" their pre-deduction salary, I guess because that's what went into their bank account.
They were also asking if they should just stop taking these deductions for a few years for some reason (I think to qualify for a mortgage), so they weren't exactly understanding finance.
I wish I could find the post again, it was baffling.
> you still have significant expenses that were actually accrued
It really depends on the numbers. If you're savvy, 1099 income lets you deduct quite aggressively, and I can see the IRS not really caring about delivery drivers' income.
I worked deliveries a long time ago, before the age of food order apps, but at least at the time pretty much all drivers calculated their pay without considering expenses. It can easily be 30% of your pretax take-home, but the cost is mostly hidden until your car breaks, your tires wear, or you need to sell your car.
Have you ever seen an instagram post where someone flashes wealth they don’t truly have? Be it a rented Lamborghini or a stack of twenty dollar dolls? Or a stack of ones with a couple hundred obfuscating the other denominations?
There are more incentives to flaunt success then bankruptcy. Even if the success isn’t real.
Most of them are bad at math because they ignore a lot of variables like wear and tear on their vehicles and the fact that their car insurance doesn't cover them using their private vehicle for commercial purposes. It's one of those things that profitable in the short-term but only if you ignore long term costs. Granted some people might have somewhat legitimate reasons for ignoring those costs or may have made some cost benefit analysis in which it makes sense for them, but overall it tends to be a net negative if you actually include all of the costs.
Pretty sure it's becoming increasingly common that one person runs a fleet of drivers that they have imported from a foreign country. The primary person sets up all the accounts, and provides the cars, etc and the drivers do the deliveries and get paid a minuscule amount. In many cases they're akin to indentured servants that also live in packed housing owned by the "boss", to whom they also pay rent. The workers get their tiny sliver of money and send it home to help out their families, with the hope they can eventually establish themselves in the US.
how are they not making more money off of data? the trip data alone has to be worth millions right? All I see when discussing Ubers profits is the cost of trips and the cost of drivers and how much they spend on marketing and politicians. It seems like theres gaping black hole of all the data they are collecting and it being put to use/sale.
There's a fairly common belief that "selling data" is a money-printing business, but it generally isn't.
Specifically, data is only worth as much as the buyer is able to exploit it to make money. Meta and Google have figured out how to immensely profit off of personal data - but that's because they own the largest ad networks on the planet.
Few other players can leverage personal data to this financial extent. More importantly, the players that can leverage personal data for immense profit also collect their own data, and so externally-sourced data is only of marginal utility.
And you see this in the discourse around this issue. We theorize for example that some grocery chain would "pay a lot" for personal data. But to what end? So they can offer just-in-time enticements to go to the store?
A lot of these supposed "applications" of personal data seem pretty flimsy, and even where they are genuinely useful, their monetary worth is marginal.
Data is worth something, but it isn't worth nearly as much as widely believed.
Personal data just isn't worth that much. You sometimes see people run around with high estimates where, like, Google's entire advertising revenue is attributed to personal data. But Uber doesn't run a massively popular advertising network, so even if that's a fair attribution it's not available to them.
It's easy to say that data is immensely valuable, but mostly it isn't. How personalized are the ads you see on the web, really? What's the ratio of times you clicked on an ad accidentally or got tricked into clicking an ad (ever had the layout change on Anandtech just before you tried to click on a link?)
I used to work for a company that helped other companies decide where to place stores. Circa 2007 we were thinking about it from the viewpoint of trips and I'd developed a touchscreen kiosk that would get visitors to a Dairy Queen to tell us where they came from and where they were going. We believed that people didn't just go to a fast food restaurant that was convenient to their home but that they were driving from point A to point B and happen to stop at a restaurant along the way so a "good location" had a kind of centrality where it was on many such paths.
(The project was ill fated. The kiosk we selected was rather expensive, particularly for a project we'd sold to one franchisee. Our partner dumped us because he thought he could get cheaper kiosks, we brought in our lawyers, as ahead of its time as it was, we never got put the kiosk app in front of customers.)
On one level it's a good idea, but what is the data really worth? Chains that work hard at picking good locations find their competitors follow them and set up shop across the street. The value of the data is based on the amount of lift you can get using it relative to the alternatives. People often wind up choosing locations for other reasons such as Duane Reade who were geniuses at finding sites they could afford in the NYC real estate market.
I believe Grubhub was profitable for years before they started offering their own delivery and had to compete with money losing companies like Uber and DoorDash.
Dev is not why they are unprofitable. It is mainly due to COGS (payout to drivers and other direct costs) & sales and marketing aka growth at all cost. Their revenue has not gone down
Both Uber Eats and DoorDash made restaurant listings without permission at first, just like Reddit seeded threads with their own comments at first. It's just a necessary part of building something that requires economy of scale. Neither platform does this anymore to my understanding.
DoorDash is wonderful if you want to pay 30% more for the same item, and then add tax and tip on top of that. Restaurants pass on the platform fee to you.
It's idiotic. Just phone it in directly and go pick it up.
I'll gladly pay $10-15 to not have to drive 10-15 minutes to the restaurant, wait a few minutes and 10-15 minutes back home. Especially in winter where I'd have to warm my car up for 10 minutes.
> It's idiotic. Just phone it in directly and go pick it up.
I don't have a car at the moment — am I just never supposed to eat outside of home-made food anymore? I've done that math many times, Ubering both ways to a restaurant is even dramatically more expensive than a delivery service.
If you don't live in an extremely walk-able place, sometimes it's the only option.
> It's idiotic. Just phone it in directly and go pick it up.
It's often hot or rainy out, or I don't want to get dressed yet, or the restaurant is far away. Paying a premium for time and convenience is far from "idiotic."
> Doordash doesn't get the pizza they paid for and want to resell
Given the restaurant was receiving calls from customers, would it be okay if a customer who ordered from DoorDash called to change their order? If so, we can add an imaginary step where the person who "ordered" these pizzas had them changed to just dough without demanding a price change.
DoorDash created the shop portal with no input from the store, and then put up incorrect prices. If that scenario still exists, they could still do this, but most of the time the store has some kind of deal with DoorDash so they would be responsible for pricing.
As for why fill the boxes, technically DoorDash would be the store's customer, so if you didn't give them what was ordered they could press the issue. It'd be hard to police, as the person making the DoorDash order wouldn't complain, but it adds a way things could fail.
Plus, the post said dough at that scale is practically free.
Doesn’t the driver notice that the boxes weigh almost nothing? Doesn’t he say anything?
If I was driver and the pizzeria handed me empty boxes I’d refuse to deliver and I’d call DoorDash. Ain’t no way I’d take empty boxes to a customer and then have the customer potentially accuse me of removing all of the food they paid for.
And they shouldn't, they're couriers. It's crazy to me to blame FedEx for delivering an empty shoe box that was shipped by Nike. I bet that dasher was so damn excited to give you that cup. I would have been laughing my ass off.
Inequality is driving this. We have let money become so accumulated, that the owners of the capital are being silly with it at the same time that workers are having a hard time. We have to tax this capital and make it work for everyone.