
DoorDash Buying Caviar from Square for $410M - bharris315
https://www.prnewswire.com/news-releases/doordash-signs-definitive-agreement-to-acquire-caviar-squares-food-ordering-platform-300895200.html
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dewitt
The price seems high for something Square presumably needed to unload. Who
else would have been bidding it up? And why are food delivery businesses still
in a bubble?

That's not a slam on businesses in a bubble phase, either. Many industries go
through one before settling into a steady, sustainable state. Just surprised
that delivery is still in one, while related industries, like ride-share are
cooling off.

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mylons
food delivery service is blowing up because it's still extremely inefficient
in the USA. you can get _anything_ delivered in Hong Kong for about $1. some
hong kongers don't even have kitchens and live like that for years.

travis kalanick is investing millions of his own cash into this space.

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henryfjordan
The density of HK is not comparable to basically anywhere in the US, except
maybe just Manhattan. The labour sources are also a lot cheaper.

There's room to improve in the US, like making kitchens without the attached
restaurant more prevalent, but as long as you have to get in a car to deliver
the food, there's going to be the same problems the rideshare industry faces.

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mylons
HK was just an example. it's true for most/all chinese cities.

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spullara
Most/all Chinese cities are denser with cheaper labor than any US city so the
point stands.

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dannyr
Metro Manila is not as dense but delivery here is so cheap. Grab and Lala are
huge in Manila.

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threezero
Labor costs in Manila are much lower than Europe or the US.

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dannyr
I mean, that's already implied if you look at the comment I'm responding to.

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wufufufu
This is the kind of announcement where all three companies put out a happy
blog post and no one knows the actual reasoning behind the acquisition or
sale.

New business model for Square?: Acquire companies, onboard them onto Square's
business platform, sell them

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erikpukinskis
That’s not a bad idea.

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mm202018
I’m so confused by DoorDash’s sudden rise. I think I may have used it once.
What is separating DoorDash from UberEats, Postmates, Grubhub etc?

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Marsymars
> I’m so confused by DoorDash’s sudden rise. I think I may have used it once.
> What is separating DoorDash from UberEats, Postmates, Grubhub etc?

Network effects are pretty strong. Locally, I don't know anyone who uses
anything other than SkipTheDishes.

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taktoa
How are there network effects in delivery apps? It's a bipartite graph, and
the number of restaurant companies is tiny compared to the number of users.

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beefalo
Once an app reaches critical mass for a location, the restaurants all go where
the users are.

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XMPPwocky
For what it's worth, the general vibe I've gotten from couriers has been that
Caviar is one of the best food delivery apps for them, and that DoorDash is
among the worst.

~~~
BinaryIdiot
It's funny, I know almost no two people with similar experiences (user or
courier).

For example as a user I have literally never had a good experience with
Caviar. It almost always wrong in different ways.

As a courier one time the guy called and said that the restaurant was taking
so long that Caviar would no longer pay him to wait so we ended up paying him
out of pocket to cover it (he said we could cancel and get our money back but
that he'd also get nothing after waiting for a very long time).

Uber Eats, as a user, has usually worked pretty well. As a courier one of them
told us they constantly have out of date restaurant menus, people order from
them, the restaurant substitutes or ignores it completely and now they have to
deal with an angry person.

It really feels like restaurants are not equipped to handle these types of
services and all of the services don't train their people if at all, as well
as treating them kinda like crap many times.

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swampthinker
I was a Caviar courier in a past life, it paid very well for someone with just
a bike ($20-$25/hr before taxes).

That courier was full of shit. You get paid regardless of customer status, and
you also get paid per minute over a certain delay threshold. Sounds like you
just got a bad actor.

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BinaryIdiot
> That courier was full of shit. You get paid regardless of customer status,
> and you also get paid per minute over a certain delay threshold. Sounds like
> you just got a bad actor.

I mean, that's basically what he said but that it had been an hour and a half
(IIRC) and he said Courier would stop paying him to wait.

I've never been a courier so I wouldn't know.

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pgrote
Perhaps keeping it separate is a good thing technically.

DoorDash app and website are a dumpster fire with usability and bugs galore.

The issue is as a user is if you bring this up to DoorDash support they have
no internal process for handling reported issues with the app and website and
letting the development team know.

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lavezzi
Sounds exactly like the Cash app.

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chipotle_coyote
It's odd, in that I never really thought about Caviar as a competitor to
DoorDash -- but that's because I know them mostly as the company that bought
Zesty (just before Caviar itself was bought by Square). Zesty specializes in
catered _group_ meal delivery. The company I'm at now uses Zesty once a week;
the company I was at before used them five days a week, and the company before
_that_ used a competitor (ZeroCater, I think) five days a week.

As far as I know, DoorDash wasn't in that space before; I wonder if that's
part of the reason for the acquisition. (The alternative is that they may not
be interested in that side of the business at all and shut it down.)

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DarthMader
Everyone's seemed to gloss over this but this deal seems to be as much an
acqhuisition as an acquisition. Do some research on who Gokul Rajaram is. He
ran ads at FB and Google was a very significant leader. I don't think the
margins of food delivery have changed. Remember Square couldn't get Uber to
pick up Caviar for $100 million around the time Square had its IPO. Also I
imagine the price involves DoorDash seems to be banking on a closer
relationship with Square as well.

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nickdandakis
Question from someone that's not familiar with law, or I guess specifically
antitrust (anti-monopoly?) law.

How are these acquisitions not in violation of these laws. Especially from the
Big Tech Cos that slurp up literally any small competitor.

From the article:

"DoorDash's acquisition of Caviar creates a highly differentiated company with
a unique brand and wide-ranging selection."

How is this not a play at eliminating competition?

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epc
It is not illegal to buy competitors (commenting only on US law). It can
potentially violate antitrust laws if you eliminate all competition in a
market by buying out competitors. But given the existence of Seamless/Grubhub,
Uber Eats, and others, plus most of the restaurants still take phone & fax
orders, it would be difficult to argue Doordash buying Caviar corners the
delivery market.

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abalone
I think this is good for Square. Maybe not a good reflection on their
previous, scattered product strategy but they appear to be getting more focus
on fairly horizontal services for SMBs. Caviar was always a bit nichey for
them.

I’m trying to figure out if their Developer API is a chasing-Stripe
distraction for them or a good defensive move.

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eridius
Just how much VC funding does DoorDash have?

~~~
lavezzi
$2bn I believe. You can tell because of how eager they are to throw money away
to drive customer acquisition.

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atonse
We're going to see more consolidation, but are any of these companies
addressing the treatment of their delivery drivers, or issues that are
starting to crop up, like delivery drivers eating food that they're
delivering?

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lytedev
Howdy! Software Engineer at Postmates here. Our CEO has put forth an opinion
piece[0] on CNN talking about his views and actions concerning this very
thing. You might find it interesting:

[0]: [https://www.cnn.com/2019/07/18/perspectives/principles-
gig-e...](https://www.cnn.com/2019/07/18/perspectives/principles-gig-
economy/index.html)

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bookofjoe
Imagine this headline 30 years ago: you'd think it was word salad from someone
with mania (politically incorrect now but not then).

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joemaller1
This seems like a smart move and a good thing for both parties, but Square’s
trading lower on the news?

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mikeryan
Yeah a bit strange. They’re making about 300M on the transaction and it was
never that clean a fit.

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wufufufu
How much do you think Square invested into Caviar, though?

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conwaytwitty
Was super confused for a while thinking this was about actual caviar...

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goerz
Me too! $410M worth of caviar sounded like _a lot_ of caviar!

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umeshunni
A quick online search seems to show that 1g of caviar costs $7-$10 (presumably
in bulk, not retail).

$410M is about 60 metric tonnes of caviar.

Still a better deal than buying a tier-3 food delivery company.

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losthobbies
I'm so tired, I thought this was fish eggs.

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sibeshk96
Still cheaper than actual caviar

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pwinnski
I wonder whether the timing of this is related to DoorDash finally backing
down on handling of tips.

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minimaxir
It takes longer than a month to finalize a $410M acquisition.

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pwinnski
The other way around: if you're in the final stages of finalizing an
acquisition, you might not want even a whiff of controversy tied to your
company.

