
The problem with third-party delivery platforms - miked85
https://lifehacker.com/its-time-to-order-directly-from-restaurants-again-1843199079
======
paxys
People forget that the reason these services showed up in the first place was
that ordering from restaurants was an absolute mess. Most of them don't have
websites, and if they do it likely doesn't work on phones. Menus are outdated
or non-existent. Few of them have online ordering systems. There is no way to
securely share credit card info. Phones are always busy. There is no way to
know their hours, whether they deliver in your area, how long they will take.
No way to easily customize or track your order. Delivery is slow and
unpredictable (if they even offer it).

As the article itself states, restaurants don't like using these services but
support them regardless, because the alternative is _no orders_.

~~~
jjeaff
There is a local Thai restaurant that, for years, has had what I consider the
best system available for takeout and delivery. The first time I called for
delivery, they took down my address and cc info. Now, anytime I call after,
they know me by the caller ID and already have all my information available.

It is easier to call and place an order than most any app or website for
follow-up orders at least.

This should be a standard feature of any restaurant ordering system.

~~~
tandr
Do they also have a pass-code or some keyword to ask you each time you make
the order?

~~~
jjeaff
They might ask for last 4 digits of the CC. But also, if you changed
addresses, I would imagine they would reverify your cc info.

------
emtel
Why is this article dodging the question of whether the restaurants are making
or losing money due to food delivery apps?

> We didn’t have a choice, we caved. Revenue from these platforms made a
> difference for our business

Ok, I assume it's a positive difference...

> even more aware of the amount of money that we get withdrawn from our
> account just to have our name on their site.

Wait, so you're losing money? I don't get it.

I hardly ever use any of these apps because the mark-up is insane, and it's
rarely quicker than just picking the food up myself. I also don't trust any of
them after the doordash tipping fiasco. And, I have no doubt that choosing to
order from the restaurant directly means more money for the restaurant.

But, either the apps are bringing in more sales than the restaurants can drum
up on their own, and it's therefore mutually beneficial, OR the restaurants
are losing money on every app sale, in which case they should pull out. Am I
wrong?

~~~
kelnos
> _But, either the apps are bringing in more sales than the restaurants can
> drum up on their own, and it 's therefore mutually beneficial, OR the
> restaurants are losing money on every app sale, in which case they should
> pull out. Am I wrong?_

You're not wrong, but you're missing some of the nuance to how the
relationship has evolved.

Even if there's a benefit, a service like Grubhub can easily become parasitic
as they grab more of the market. It's getting to the point that you'll get
basically zero delivery orders if you try to go your own way and hire your own
delivery drivers, and expect people to use your website or -- god forbid --
call you on the phone to place orders.

People very often to use these apps to figure out what they want to order. The
other way around ("hey, I really want Bob's Pizza tonight, lemme open up
Grubhub and see if they're on there") is becoming less and less common.

So restaurants are forced to be on these platforms to get any takeout business
at all, but find that they have to work twice (or more) as hard to make up for
all the fees the platform charges. And the platform can get away with it,
because they've squeezed out the option of self-delivery for most places.

> _I hardly ever use any of these apps because the mark-up is insane, and it
> 's rarely quicker than just picking the food up myself._

I wish there were more people like you, but it seems like you're a dying
breed.

~~~
satvikpendem
Exactly, think of these apps as more of a lead generation service, or a search
engine even, and being on their platform, even losing money, is akin to taking
out search engine ads. Sure, perhaps the first few times people you lose
money, but you might gain more long term by having repeat customers, who may
even order directly once they see how much they spend in service fees at the
end of the receipt. I know I definitely have.

------
pbourke
We’ve been ordering from one of the best fine dining restaurants in our town.
Before the pandemic they were dine-in only.

They advertise their regular menu + specials on FB. To order, you send a text
in the afternoon with your order + pickup time between 5pm and 8pm, in 15
minute blocks. The restaurant calls you a few minutes later to confirm and
take your card.

This is a clunky process, but that’s fine - they’re new at this, and I’d
rather them get the max amount of the sale than have fees drained by third-
party apps.

But it occurs to me that we’ve missed an opportunity in North America (and
maybe elsewhere?) to build a platform that works like WeChat, where you could
conduct this simple menu-selections-payment transaction, perhaps with some
chat in between, using a ubiquitous interface.

Same scenario with booking a hair appointment, paying for small home services,
etc. There is an interaction that includes chat, scheduling, possibly
invoicing and payment, but this can involve up to one app per activity.

The channel is the unifying abstraction, it should own the entire interaction,
including presenting the few widgets that are required to implement the
workflow. I know that most chat apps have some variant of this capability, but
the landscape is totally balkanized.

A corollary of this approach is that payment and workflow widgets should be
commodified and thus extract a minimal amount from the transaction.

We have many apps per category, each with a special-purpose channel. We should
have one channel with many possible simple interactions that can be delivered
through it.

~~~
namanaggarwal
Take your card? By phone? Isn't that one of the problem. I don't want to give
my cc details over phone. 3rd party app does provide some value and that's why
they are in business. They also provide an infrastructure for delivery which
people keep forgetting about.

~~~
subhero
That (“card by phone”) is a problem of trust. Whatever happened to that
concept? I’ve given away my CC details probably hundreds of times in the pre-
internet era (travel agencies, hotels, phone-order, etc.), because I had the
details of and trust for the opposite end. That trust is increased through a
platform provider is a fallacy imo. The only two times I experienced dodgy
charges to my CC that needed refund were because of database leaks/breaches.
Go figure ;)

~~~
metrictwo
Surely you recognize that this is anecdotal evidence, though? Are you
suggesting that people are less likely to experience CC fraud if they give out
their information to each vendor instead of using a central mediator like
PayPal? The reason we used to give that information out so readily in the past
was a combination of not knowing better and not having better methods, and it
allowed for _a lot_ of low-level financial crime, despite the fact that you
were lucky enough not to experience it yourself.

------
gorgoiler
All it takes I one deviously altruistic group of hackers to build an online
delivery market maker that links couriers to restaurants, and all of the
GrubHubs and Deliveroos would collapse.

I feel like a lot of the work in something like Deliveroo is marketing,
dispute resolution, money and payment management, inventory / menu tools (and
transcription?).

If everyone paid cash, restaurants typed in their own menus, and left
marketing to some other third party, is the rest just craigslist-for-food?
“1995 ... written in Perl”.

I’m hesitant of coming off as “this could be built in a weekend” but the
reason why most things cannot be built in a weekend is because they are the
publicly visible front of a machine designed to be worth $1bn through
analytics, marketing, ad tech revenue, content moderation etc. Drop all that
and the front end is much simpler.

~~~
rahimnathwani
'I feel like a lot of the work in something like Deliveroo is...'

You forgot 'delivery'. Many people don't mind paying an extra $10+ to have
someone else pick up their takeout meal.

~~~
gorgoiler
Sorry to not be clearer: when I talk about market making I meant for the
restaurants to be put in touch with delivery people so they can negotiate that
themselves, off app, rather than having Deliveroo involved in the process.

It’s not a very coherent idea other than the usual “crush the rent seekers!
[Deliveroo]” I guess.

------
colmvp
I feel like what's often overlooked is how much so many of these delivery
services have lost money over the past few years.

UberEats is more popular than ever, but it's not even close to helping Uber as
a company avoid mass layoffs in the coming weeks. The UberEats division was
losing hundreds of millions of dollars last year. Likewise with DoorDash.

Restaurants complain about the fees which is fair but they've failed to
mention how much money and time they would've spent on hiring multiple drivers
to fulfill orders as well as a digital system to allow people to place orders
online. By all means, if these apps suck, then hire your own drivers like
restaurants have done in previous decades. Furthermore, platforms like this
apps allow restaurants to be far more visible than if they just used their
social media presence.

IMO, the biggest flaw with restaurant delivery is that it's hugely
inefficient. You can't optimize it like UPS/Fedex can with packages, and
people don't buy as much in one go as you would with a grocer. So companies
like UberEats need these fees to allow them to actual remain viable and so
that they can keep spending on things like development, marketing/sales, etc.
Like it or not, delivery is expensive.

~~~
kelnos
I think the issue is more that _predictable, timely_ delivery is expensive.

When I was growing up we'd get pizza delivery from a local pizza shop.
Depending on the day of the week and the time we'd call, our pizza could
arrive in a half hour or two hours. Sure, a part of the was the capacity of
the kitchen, but a big part was also their delivery capacity. They had two
guys each driving a car. They could batch deliveries to some extent so each
driver would drop off more than one before returning to the restaurant, but
while that gave them better throughput, it gave them worse latency.

Meanwhile, with Grubhub, Postmates, etc., you have a fleet of always-ready
drivers -- effectively an unlimited number -- who are ready to take a single
order, go pick it up as soon as it's ready, and deliver it directly to you.
That's terribly inefficient on a per-driver basis, but it's great for the
customer.

I personally don't mind the variability in timing in the old system all that
much. Sure, there are some times when I really want food _now_ (but even then,
the fastest deliveries on these platforms is usually around 45 minutes), but
for the most part I don't care if it's going to take another 30-60 minutes.
But a _lot_ of people really do value the speed, and, more importantly the
predictability. If you want to eat at 6pm and know that the delivery time is
nearly always 45-60 minutes, you can pretty much eat at 6pm. If the delivery
times vary from 30 to 120 minutes, you order at 5pm and live with eating
anywhere between 5:30 and 7:00. Yeah, this is seriously a "first world
problem", but plenty of people have gotten addicted to the predictability and
seamlessness of it all.

It's really unfortunate, because at the end of the day it means we value
convenience over the health of our local businesses.

------
qppo
The reason I don't order from restaurants directly is because I usually don't
know what I want to eat, and those third party ordering services give me more
insight as a consumer as to what's available to me and at what price. They
also use payment processors that I'm already using and have a more browsable
and legible menu with consistent layout across other restaurants.

Oftentimes the difference isn't between ordering through a third party and
directly from the business, but ordering takeout at all.

There's too much benefit to me as a consumer to using third party services
over ordering directly from businesses. You don't have a right to more of my
money because someone else created value that you couldn't or wouldn't.

~~~
subhero
So the “too much” benefit you are talking about is aiu basically a)
“consistent layout” b) “payment processors”? Isn”t that just a single digit
improvement in terms of convenience (aka the laziness factor ;) In terms of
“insight as a consumer”, it is the other way around where I live. Third party
platforms almost always have only a stripped down menu available, because
restaurants adapt and improve for meals that can be processed quickly and/or
prepared in bulk in order to not pay up towards individual/labor intensive
food on those platforms. I switched back to order by phone and pay at the door
a long time ago to get the true value out of the restaurants and not a
platform, which’s value prop is to be a man in the middle with a web front
end.

~~~
qppo
I wouldn't know about most of the restaurants in my area without these third
parties. That's the insight I'm talking about.

Like I said. The alternative is not me getting better service or product or
whatever. It's buying from them at all.

------
enos_feedler
If there is one new iOS API I would like to see in response to COVID-19, it
would be direct integration with restaurants. It isn’t just a win for
restaurants, it’s a win for users too. Right now I can’t figure out which
platform or website I use to reach a particular place. Sometimes I want to
search by item, so it would be good to index menus too. Throw in one touch
Apple Pay, notifications to know when to leave your house to pickup the food,
even a Siri shortcut so I can order my favorite dish easily again.

I don’t want these things to show up in aggregators. I want it built into the
OS. With a couple of voice commands or taps I can be on my way.

I do feel like this will come. Apple has started an Apple connect program with
some gyms. I feel they will do the same with restaurants. I’ve heard rumors
about native applets that will load from QR codes. I can easily see “Apple
Connect” certifications on restaurant windows and counter tops that lets you
load the restaurant app quickly and easily, discovering it exactly where you
use it.

Far fetched maybe! But I can dream.

~~~
namanaggarwal
Apple is not a "not for profit" company. Don't forget if it's free then you
are the product.

------
supernova87a
This is an example of one bad thing about our convenience culture or
expectation of infinite choice, delivered immediately.

It allows the middleman (who legitimately did some service by making so many
restaurant choices available) to insert himself into every transaction, turn
themselves the one you have a relationship with, and extract margins from the
actual provider of the main service who becomes a commodity.

Ordinarily I would buy the theoretical point that certainly a service is being
performed. But given the evidence and tactics about _how much service is being
performed versus being charged for_ \-- that places like Grubhub/other
platforms extract 20% commissions and put out their own phone numbers to
masquerade as the restaurant's -- I would be glad to see them die a painful
death as a result of this crisis.

Order directly from the restaurant, and be sure that's actually what's
happening.

------
laydn
The problem is, if you order direct from a restaurant which takes orders from
one of these platforms, the restaurant prioritizes the platform order, because
the platform has reviews and ratings, which directly influences sales.

Your phone order will almost always be considered less important.

------
brfox
It seems like this area is ripe for a non-profit, open source platform to help
out. What options are out there along these lines?

~~~
paxys
The problem isn't technology but logistics. How are you going to find a large
pool of drivers ready to take food instantly from point A to B in the city at
little/no cost?

~~~
brfox
Woops, I guess I was thinking more about ordering online and picking up the
food myself. I usually just call the restaurants to place my take out order,
but tend to prefer places where I can order on their own app or website, pull
up and re-order the last thing I got, and then hit submit. Like someone else
mentioned, there is a lot of friction with calling and placing an order,
explaining the modifications, paying in the store, etc, etc.

I thought this was such a fabulous idea, I bought a domain name for it:
[https://inmytown.org/](https://inmytown.org/) As usual, I just haven't done
all the other hard work. But, in the old days last year, I thought it would be
cool for local shops to have an online presence so that online shoppers could
see where to buy stuff and place orders and then pick it up. So, have an
e-commerce platform for shops, restaurants, delivery would be great. Try and
keep money local instead of shaving 10-20% off of all transactions and sending
them to big tech. Does anyone want to help me build this? Totally committed to
non-profit and great apps for local companies.

~~~
sharemywin
you could check this out:

[https://coderealprojects.com/](https://coderealprojects.com/)

------
mike_h
Just don’t call them from the Yelp app:

[https://www.vice.com/en_us/article/wjwebw/yelp-is-
sneakily-r...](https://www.vice.com/en_us/article/wjwebw/yelp-is-sneakily-
replacing-restaurants-phone-numbers-so-grubhub-can-take-a-cut)

------
mrkirk
The middleman nightmare. Everybody wants to capture the middleman, which
drains those that deliver value. That can be applied to Airbnb, Ubereats, car
dealership, gig economy. These platforms have very low liability regarding
labor cost and controls the access to the goods offered. This whole gig
economy is putting small businesses and workers in a position where the
information asymmetry is so huge that is putting them in constant price
pressure, below the reasonable to be worth operating. It’s too much
competition on small business and workers.

~~~
heliheliheli
Convenience of delivery is a big point of improvement though, which the
restaurants never used to compete on before. It's become commonplace to
complain about the middle-men like Uber and seamless now, but before they came
around the analog services that existed (taxis and restaurant delivery) were
so much worse.

------
kelnos
There's a pizza place up in the Tenderloin (SF) that I occasionally order from
(I used to live a couple blocks from them and would walk in all the time). I
would order on Grubhub because that was how they were set up to do delivery.
(I believe they link to Slice from their website now for delivery.) The
delivery person was always someone from the shop itself, not someone who
worked for Grubhub. Now I wonder how much GH was skimming off the top, even
though they weren't really providing all that much.

------
metrictwo
I've tried this multiple times, but in my experience, there just aren't that
many restaurants that allow you to pay without giving a credit card number.
That's a non-starter. Yes, I do give my credit card information to some
companies, but only when I know said company would be devastated by a breach,
and I keep it as limited as possible.

------
chvid
For:

    
    
      - Marketing
      - Delivery
      - Payment services
    

30% is actually not a lot.

Delivery platforms has economies of scale when it comes to delivery,
marketing, payment that the individual restaurant does not have.

Therefore they are (in general) a good deal even for the restaurant. Also
their convenience increases the general demand for food services.

------
paulus_magnus2
If you order from delivery service you'll get convinient delivery and
commodity food. If you order from restaurant the relationship reverses.

(*)Market is efficient and all theory aside, it matters who owns the customer
as the rest of the value chain will be put on a race to the bottom.

------
sneak
Then it’s time for restaurants to get apps or websites it’s easy to order on.

Is there a service provider that doesn’t try to be a lead-gen middleman for
restaurants? Like a Squarespace or Wix or Shopify but for food stores that do
delivery?

------
sharemywin
The biggest problem with the apps is most food isn't really that good
delivered.

There's a reason pizza is #1 in delivery.

Once the cheese has cooled down it tastes better.

------
jdkee
Yes, cutout the parasites.

------
maxdo
I feel lots of people realize they don’t need anymore to order. When do you
need to order something? It’s either you have a party , people are gathering
or you rushing back home from work and don’t have time for cooking. Non of
this conditions exists anymore. I realize that plastic wrapped food from local
restaurant is not as good as I can cook myself. I never cooked a lot before.
But this time , you have time for yourself .dont get me wrong I want to help
those people , but helping is not ruled by communists rules. Me and many of my
friends just don’t want to order home even as much as before lockdown. It’s
not about money it’s about time for yourself :) and those money I saved I
usually donate.

~~~
pottertheotter
My wife and I have been cooking at home, but last week we both had a busy,
long day, and we were exhausted and wanted a good meal. So, for us, the reason
we would have ordered takeout before is the same reason we ordered takeout
that day.

