
The Future of DoorDash Is Turning Delivery Into a Platform - secondary
https://www.fastcompany.com/3066126/tech-forecast/with-its-new-drive-service-doordash-is-turning-food-delivery-into-a-platform
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Animats
_DoorDash loses money on almost every meal it serves._

Uh oh.

We're headed for a big crash in "just in time services that lose money".
Remember Webvan and Kosmo. The business model of all these guys, including
Uber, is "achieve monopoly, crank up prices". Probably not going to happen.

The experience of Austin, where Uber and Lyft pulled out over the driver
fingerprinting issue, is instructive. Within a month, six competitors were up
and running. The barriers to entry in this area are low. Even if someone does
get market dominance, they can't raise prices much.

Uber is particularly vulnerable because their latest capital infusion of
$1.5Bn is high-interest debt, not equity. That's an axe hanging over the head
of a money-losing company.

~~~
Analemma_
Someone on HN explained this very well recently: that food delivery is the
perfect business for duping gullible investors, because you can book the
entire cost of a meal as top-line revenue, even though it passes straight
through you to the restaurant. So if someone orders $80 worth of food, that's
$80 that you can show off on your Series B pitch deck even though your profit
after delivery might be -$5. It's not even like the Uber theory of "we're
spending to grow", it's "we're spending to make more money that isn't ours
look like ours", with the losses expanding in lockstep. I agree that a major
bust is incoming.

Edit: "gullible" may not be the right word. It's more like this is a clever
hack to exploit how tech investors are complacent about huge losses, as long
as revenues are growing too. That's not inherently a bad thing, sometimes this
approach is a good way to build out a healthy business. But the food delivery
outfits are carefully exploiting this and hoping they get pattern-matched to
other business models where it's OK, even though their situation is not the
same at all.

~~~
prostoalex
I don't know if those gullible investors are so easy to find, Groupon
introduced everyone to the concept of "gross revenue" and "net revenue" back
in the days.

~~~
JonFish85
And they were a tremendous success for their pre-IPO investors.

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PretzelPirate
DoorDash can't seem to get my simple order correct when picking up from a
restaurant. They have < 10% order accuracy after ~100 orders. Either special
instructions weren't followed or entire parts of the meal were missing. At one
point, we had ordered 5 entrees from the same restaurant and the delivered 2.
They don't train their delivery drivers to do any accuracy checks on the
order. Are they really qualified to move into being a delivery platform? I
wouldn't trust them with anything important.

~~~
NeutronBoy
> They have < 10% order accuracy after ~100 orders.

Why do you continue to order through them if they're that inaccurate?

~~~
PretzelPirate
At first, I ended up switching to other delivery platforms. I also reached out
to the restaurants that DoorDash was constantly messing up with and spoke with
them directly about how to improve the system. I also spoke to DoorDash, but
you can only ever get a hold of their support team, not anyone who manages the
delivery business. After that, accuracy got better, and then slowly started
declining again. Now, I use Amazon for my food delivery, and they do a
fantastic job.

~~~
r00fus
Does Amazon deliver from restaurants?

~~~
r27d
Yes Prime Now does restaurants in SF

~~~
PretzelPirate
And in Seattle

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CPLX
I'm pretty sure you only need to read this headline to know that the next
notable landmark in the future of DoorDash is ceasing to exist.

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arzt
"Everyone, shockingly, wants convenience. And as a result, it's our job to
find the ways to fulfill that." \- said every consumer internet company ever.

Demand does not beget a sensical business model.

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alaskamiller
Long story short: DoorDash moving to 3PL B2B services to catch larger ASPO,
therefore higher margins to pay the $7 fixed driver fees.

1\. Dominos does 2.5MM deliveries sure, but Dominos is a marketing company
first, a delivery company second, and a food company third. Their products are
purposely made to be sold enough to cover labor and ads with barely enough
left over, but combined works with a franchise network.

Which means...

2\. Most providers on the platform are really bad, if your restaurant is
working with DoorDash it's because your food is bad and delivery is the only
value add, see regards to In 'N Out vs Jack In the Box.

So that means they have to ditch their current form since...

3\. Churn of drivers is insanely high since they're viewed as disposable. The
pay is low after considerations, limited job security, limited upper movement,
limited support for drivers. All because the margins are just not there at the
level they're at.

Obvi, since people's habit of spending $20 on a $8 burrito isn't sustainable.

So Postmates and DoorDash all running faster towards being USPS before more
down rounds to tackle last mile problem--with UPS/FedEx just chuckling on the
side playing with their plane and ships and Uber playing with their trucks.

PS. Analog to this is [https://gorickshaw.com](https://gorickshaw.com), a YC
company.

~~~
seibelj
I followed everything you said, but what does ASPO stand for? Cannot find it
with my googles

~~~
eddieplan9
Average sales per order, I am guessing

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fluxic
Honestly: not surprised. The margins on DoorDash were way too slim to ever
make the unit economics work. "Customers are used to paying $30 to Uber across
the city — but very few will pay $30 to Uber their sandwich." [0]

[0] [https://medium.com/@review/the-food-delivery-death-
star-85f9...](https://medium.com/@review/the-food-delivery-death-
star-85f9a121313)

------
Animats
Here's the new competition for DoorDash - autonomous delivery robots from
Starship Technologies.[1] These robots are being deployed in Redwood City, CA,
this month. The City Council just voted to allow them to use Redwood City
sidewalks for a 9-month test period.

The video shows them delivering from La Tartine. I eat there often, and was
there tonight, but haven't seen one of the robots yet.

[1]
[https://www.youtube.com/watch?v=DW16O6UWtSc](https://www.youtube.com/watch?v=DW16O6UWtSc)

