DoorDash, GrubHub, Uber Eats, they’re taking blame almost like they’re Ticketmaster or something. McDonald’s jacks up their prices, then they charge even more via food delivery, and then both DoorDash and McDonald’s make more money and we’re just focused on DoorDash.<p>I think the “driver” aspect of it and wages there are probably a big part of the visceral reaction people continue to have. Though I personally don’t get it. Nobody was filing lawsuits on behalf of pizza delivery kids.<p>Truth be told outside of Uber (questionable) I don’t think any of them are good investment opportunities. Neither was Blue Apron.<p>Also just stop ordering takeout from subpar restaurants or food chains. Go out to eat with friends or cook at home. High prices for mediocre convenience services isn’t worth it.<p>Corporate GrubHub isn’t going to take a pay cut and they don’t run a non-profit. If Seattle wants to create legislation like they did here there is no sense in being surprised that prices have gone up.
I wonder if these food/grocery delivery apps are shooting themselves in the foot with how they balance pricing/fees vs marketing/promotional costs.<p>You can almost always find gift cards for these services that are 10-20% off. And once you stop using these services for a short while, they bombard you with 20-40% discounts to pull you back.<p>So it's likely the fees are too high because they need to offset the marketing spend, but then the reason why people avoid or use these services not very frequently is because of the high fees.<p>Maybe there is a world in which spending less on marketing and lowering the fees could result in lower acquisition cost and higher retention.
As we all know, the true minimum wage is $0, as if a job isn’t viable and can’t make a profit it simply no longer exists. Maybe we’ll settle on deciding food delivery shouldn’t exist. I was between jobs and DoorDash was a joy to work, I’d just catch up on my reading with a nice Carl Jung audiobook while driving around. Literally the easiest job I’ve worked in my life.<p>DoorDash is certainly expensive, although I was happy to pay $40 for some chips and ice cream the other day because I had a long day at work and wanted to be an absolute couch potato.<p>The document details the gross profits of DoorDash, but isn’t setting up menus, coordinating with restaurants, all of this an intensely difficult, non automatable problem? There’s zero insight gained by reading this about how DoorDash spends its money. I’d assume engineers and people tweaking menus are expensive? This document doesn’t actually answer the question of “why DoorDash fees are so high” at all, as I suspect the person writing the document doesn’t know why.<p>Maybe the answer is just “oh they’re super greedy” but I’d hazard it’s more complex than that.
This analysis is pretty weak. DoorDash is running a net loss overall - gross margin isn't covering their fixed costs - especially marketing to obtain customers. In their most recent 10-K <a href="https://www.sec.gov/ix?doc=/Archives/edgar/data/1792789/000162828024005600/dash-20231231.htm" rel="nofollow">https://www.sec.gov/ix?doc=/Archives/edgar/data/1792789/0001...</a>, they have a non-gaap measure contribution profit per order which is -0.8%. So yeah, it's not surprising that they're trying to increase fees.
I don't know what the app/driver split is, but in developing countries, the total fees are typically $1-2 for food delivery on Grab, Food Panda, Gojek, etc.<p>If those apps can make enough from that, then there's no reason they need anywhere close to what they're charging in the US and similar countries. The app costs (ignoring what's paid to drivers) shouldn't differ much between markets.
I see gross margin, where is the net margin?<p>No other business is subject to this scrutiny. A food service business increasing their prices based on labor cost is well documented in the different Big Mac prices across the country.<p>Who is out there telling McDonalds to keep their prices down because the gross margin on post mix soda is 98%?
"they chose not to accept slightly smaller margins in response to the requirement to pay workers minimum wage"<p>Oh, what a surprise, so communism do not work in real life and Government is not your friend? Shocker.
I interviewed at DoorDash way back when, could've been about employee #12 or something. But when I sat down to interview with a couple of the cofounders, it seemed to me they were some kind of sociopaths. I have no regrets whatsoever not calling them back. All of my friends that work in the service industry (at the actual restaurants, not delivery drivers) absolutely despise DoorDash. I refuse to use it.