I don't think the average restaurant owner who may not be very digitally savvy realizes how these companies piggyback on top of their brand. I predict that soon there will be a large class action lawsuit with thousands of restaurants going after the delivery services for these underhanded tactics.
The most frustrating part is that these types of situations are tough to avoid and we're starting to see them everywhere. Ex: DoorDash has a huge marketing budget / money to burn when starting up, so the early adopters see great returns because someone else is paying for a bunch of advertising for them. They tell their friends and slowly the system grows to a critical mass where you're losing out if you're not on it. Then they abuse their market position and do stuff like this.
You see it everywhere; Google, Amazon, Microsoft, app stores, adhesive terms of service, etc.. It's happening in the software development industry right now and no one's paying attention. Tons of services like SaaS Git, Saas CI, SaaS dev environments (Codespaces), templated SaaS deployment targets, etc.. The early adopters are seeing gains in efficiency, so they're out there advocating the use of all these subsidized services, but no one is considering what's going to happen in 5 years when the ownable workflow is neglected and the SaaS workflow is the only practical option.
About the developer tools you mentioned, take for an example the CI service. It is relatively easy to switch to a new one. I have used Codeship and Circle CI in the past but have switched to Google Cloud Build since it ia cheaper for my use case with Docker containers.
So Google is the real loser ??
- [A SaaS startup or established platform] has a huge marketing budget / money to burn when starting up.
- Early adopters see great returns because someone else is paying for a bunch of advertising for them.
- They tell their friends and slowly the system grows to a critical mass where you're losing out if you're not on it.
- Then they abuse their market position and do stuff like this.
To put a name to this trend, to call them "subsidized services", makes it clear to recognize how much of business/software/web ecosystem is getting consumed by the strategy.
It's honestly gotten pretty bad. I almost can't find most independent restaurants' web presences anymore because Yelp, Caviar, Google's page, Doordash, et. al. all outcompete them on SEO for their own brands. And that's AFTER the paid ads those same sites manage to take out.
Most of the time, I end up using restaurant menus listed on UberEats or Doordash instead of their own websites before I call them for a delivery because it's just impossible to find their websites. It's especially bad with things like Chinese or Thai restaurants since so many of their names are variations on a handful of motifs. So you might be looking for the Peking Garden across the street, but you're just as likely to get Peking Gardens in cities all over the country, none of which are affiliated with each other. But the Yelp or Doordash hit is always the one right by you.
It's unfair. I want restauranteurs to be good at restauranting. The line between their success or failure shouldn't rely on their ability to outsmart expert SEO hustlers. It basically winds up being a shakedown that adds no value to the customer or the restaurant.
The trick is to look them up on Google Maps using their address/location and usually their website is directly attached to their map entry.
Restaurants have to pay an arm and leg (often around 1/3 of revenue) for prime real-estate; or pay higher wage in more prosperous places.... is it fair?
In the end, restauranteurs who are good at this business will thrive and those who are not good at it will falter. Google/Yelp/DoorDash just provides additional dimensions for restaurants to compete in. And as always, when new technologies emerge, there are winners and losers.
In this wave of change to restaurant industry, the winners are actually smaller restaurants at cheap locations who are previously invisible to most potential customers but now are on equal footing with restaurants at prime locations in terms of exposure. And in the long term, it'll shift restaurants' expense breakdown, and those who pay too much rent will struggle because they don't have the budget to pay for online exposures.
It doesn't mean the restaurants paying less rent will be more profitable, the money simply goes from landlords to tech companies. And as long as restaurant industry is a fiercely competitive market, profit margins will remain low.
If the differentiating factor between success or failure is SEO rather than location, quality of food, or service I have trouble seeing how that's a net benefit for anyone but Google. Maybe "fair" was the wrong term. It's encouraging maladaptive behaviors in the industry.
As long as people desire such physical congregated commercial areas, they won't go away. But I'm not confident that people really want them, based on how they vote with their wallet and time.
I get feedback that I'm writing valuable and interesting independent content, but people don't promote my work by sharing it around and very few people kick money my way. When I complain about how I remain dirt poor and people on the internet expect writers to be de facto slave labor, I get told crap like "Get a real job."
Advertising is how much of the internet is funded. If you think it's a cancer, help fund things that aren't using advertising to deliver value. Vote with your checkbook, as they say.
Not if you're this guy , he went out of his way to ensure he got the worst reviews on Yelp from his clientele in order to defy the monopoly Yelp has over the Industry and its exploitative shakedowns.
The GM at my last restaurant hated having to pay and play by Yelp's reviews but since we were doing upwards of 20k+ days even during non-peak season on a consistent basis it was a marginal cost at the end of the day and 'a cost of doing business.'
Having been in-out of the Culinary Industry, jumping from tech and automotive in between, restaurants rarely have Marketing down and often relies on word-to-mouth practices.
Unless you're on something like Chef's table, or one of Bourdain's old shows, or get a Michelin star (or to a much lesser degree James Beard award) there is very little exposure outside of local magazines and who even bothers with food critics--if they're even around any more--outside of someone being a person with way too much time on their hands.
One of my colleagues/cooks went to NY on all expenses paid trip to see Blue Hill Farm, and got to be with Barber all weekend long. He said that Chef's Table was a life-line that pretty much put him on the map, because prior to that no one really paid attention outside of his local NY clientele.
One of my more loftier post-retirement goals was to see if I could make a few pilot episodes highlighting the local food scene within certain Tech hubs and eventually Digital Nomad cities all over the World and have dinner with a select few startups to see what they were about.
Having a hand in both Industries I thought I could capture things well, and I even drew up a list of cities I'd visit, starting with my own and a few in CA. COVID has put a damper on it all, but may be worth exploring now that there is a dire need to help and people seem more receptive to help out people in the Restaurant Industry as things are slowly starting to open up. Hopefully with a few EPs and a refined approach I could pitch to Netflix, Hulu, AppleTV et al... Honestly, I just want to be able to aspire to make something worth Zero Point Zero Prodcution's attention as they do brilliant cinematographic work.
The point being that Marketing is not always more important than the product and if you're brave enough to go against conventional wisdom it can be quite profitable as he saw a massive increase in business. But it is, albeit unconventional, Marketing in the end.
This same thing happened to the hotel industry few years back, studying that would give us a good idea of how this is going to play out. I think restaurants are just going to have to adapt to the new reality.
He helped my startup immensely (Academy123) when he worked at TechSmith by providing us with a special version of the Camtasia SDK.
On what basis? You can't just sue someone because you don't like them-you have to have some argument that they wronged you.
The contract between grubhub and the restauraunt makes everything more complicated, as there is likely language relating to trademark use, so this might turn into more of a breach of contract suit.
I have never once got a helpful response from any chatbot because they are only equipped with content already in the site anyway. Comcast is a model implementation of how utterly useless they are.
> Possibly the most maddening thing is that if a customer clicks on the link, it does NOT take them to a webpage to order from Saddleback BBQ. It takes the user to a general page to order BBQ from anyone that serves BBQ. At the top of the list? Applebees.
This is a particularly egregious sleight of hand. It's a relatively easy click-through to write for DoorDash, and it would result in the customer getting exactly what they were looking for (instantly looking at Saddleback's menu options and probably ordering). But DoorDash isn't content with delivering what they promised! The customer must perform a secondary search within DoorDash just to find that same restaurant again, because Saddleback is nowhere within sight on the page they've actually landed on. It's sneaky because it seems like incompetence, but the reality is that they've absolutely done it on purpose so they can double-dip one customer and display ads to them from restaurants that paid more to DoorDash.
Well isn't that plain fraud? (And no adding some * somewhere with a disclaimer doesn't make it not fraud. The point is that it intentionally misguides/tricks/manipulates the user with the intention of harming the given brand (by on-the-fly replacing it)).
EDIT(clarification): It's like going into a shop and asking for a specific samsung tv and the salesman goes and comes back with a philipps tv saying here is your tv, the price is .... Sure if you look clearly at it it's not the PC you asked for but if you are in a hurry or social insecure you might still end up buying it even through you didn't want to.
(The potential hitch here is that most restaurants are small businesses, and small businesses aren't great about doing things like registering their trademarks. But you can still build a claim even around an unregistered trademark under certain circumstances: https://www.nolo.com/legal-encyclopedia/what-good-unregister...)
If doordash didn't sell Saddleback food, i'd agree, but given that doordash distributes Saddleback products, seems reasonable to me they are allowed to advertise "buy Saddleback bbq here"
What these companies are doing is definitely misleading but I don't think anyone is accidentally purchasing from Applebees thinking they were getting Saddleback BBQ.
It would be like mentioning a popular brand on your website in order to get the search engine traffic for that brand, even though you don't sell it.
You can't lawfully squat a brands trademarks, neither in SERPs, domain names, nor in real world signposts.
You can use trademarks for comparison but having a signpost - virtual or actual - that has another brand on it is tortuous infringement. Bait and switch is rightly unlawful.
Spelling "tortuous": I find supporting documents from the UK Home Office , the UK IPO (including in court proceedings for trademark), and in private practice references to UK tort law, eg  dated 2019.
I don't consider my usage to be wrong per se but will consider using tortious in international forums (I so wanted to write "fora", lol); thanks for the query, terse as it was.
It's possible we're all using it "incorrectly" of course. I work in the IP sector, we might all be drinking from the same fountain (eg perhaps reading past UK caselaw keeps us archaic).
 https://www.worldtrademarkreview.com/brand-management/signif..., example of talking about an intricate case that twists and turns.
 https://thelawreviews.co.uk/edition/the-intellectual-propert... talking about an infringement of a tort, as tortuous.
 https://www.gov.uk/government/publications/references-to-the... , note I'm assuming the Home Office is the origin, it's Gov, but I don't really see mention of the department that owns that data.
While we're on the topic—that's probably ‘principal’.
That is exactly what is happening. Say Saddleback isn't open on Tuesdays. Boom, that visitor now sees a long list of BBQ joints to order from that can still be delivered. Since they are in the mood for BBQ clearly, they are going to order from Uncle Bucks BBQ instead.
This should be open & shut huge fines for DoorDash, damages paid to this restaurant (and many others), and enforcement to prevent it from happening again.
People working for these companies and facilitating this should be ashamed of their employer and either quit or vocally demand changes internally.
It would depend on the terms of service. If it clearly outlines their self-serving goals when spending "your" advertising dollars, then it seems it falls back to the owners for signing into such an agreement.
It must be really difficult out there for so many minimal margin businesses to make such Faustian bargains. Then again, I never really understood how Groupon was able to do it either. Is the "restaurant owner" marketplace really that unsophisticated, or is it so bespoke that it's incredibly difficult for any one owner to fully do their diligence?
This is the true effect. It gives you something similar, but degrades your brand name and sidesteps the law.
DoorDash isn't telling you that Applebees is Saddleback BBQ, they are just not making it as easy as they could to help you find what you are looking for.
Fraud is hard to prove because you have to prove intent, but this at best incompetence, almost assuredly false advertising, and pretty clearly fraud although good luck proving it in court.
How is this any different than a newspaper ad saying "You can get Coke at Krogers" and then Krogers having a Pepsi display in the soda aisle.
I'm not sure if you were the one who downvoted me here but it hardly seems fair to downvote someone for having a different point of view.
Our directives were always: If the user has showed intent for a specific thing, tailor the landing page towards that thing as much as possible, and get out of their way. Don't let them forget they already made up their mind.
The DoorDash approach seems very backward. If I saw that landing page I'd be inclined to think "wow, these people don't actually have Saddleback, let me check somewhere else." I'm not gonna get Applebees after googling a different particular restaurant.
That's if you're trying to sell them the thing they showed interest in.
Door Dash et al aren't trying to sell you Saddleback Barbecue, they're trying to get you onto their platform so they can sell you to advertisers. What you're interested in is just a way for them to manipulate you onto their platform.
I guarantee you that a custom landing page for these campaigns would work out better for them.
If Applebees is paying for some sort of marketing/relevance service, then all bets are off, and it's up to DoorDash's leadership to choose which of their opposing customers get screwed.
I do have issues with the misuse of the restaurant brands -- seems unethical to send me to Pizza Hut when I click on Dominoes.
You're polishing a turd. Call it whatever you want, but if I'd prefer not to be a customer of a company who prioritizes competing interests over me.
Amazon is a terrible example of prioritizing customers--what part of selling counterfeits, putting sponsored products higher in search results, or retroactively deleting books off your Kindle serves users?
Pushing the user into the "find a restaurant" model, after they want a specific one, gives the platform an opportunity to optimize for their needs. This may or may not be a positive for the customer, and it may or may not be enough of a lift for the platform to overcome the dropoff because of a poor landing page experience.
One misconception I see about conversion optimization is that it's generalizable. Google's blue button test doesn't matter to any product except that exact one. None of us can say, without seeing the results; our previous experience is not relevant.
EG, maybe a 10% conversion to order dropoff is OK if we can direct X% of users to an expensive restaurant. The 10% drop cost is offset by a 50% increase in order cost.
First, a custom landing page can both provide you with the restaurant and an option to search for more restaurants.
Secondly, if the goal was an optimized experience, why wouldn't they want that on their restaurant pages, even the ones that don't come in from search? There's a reason.
> One misconception I see about conversion optimization is that it's generalizable. One misconception I see about conversion optimization is that it's generalizable.
YMMV of course, but this one stretches credibility.
I've worked with brilliant conversion optimizers, in a single vertical niche where we had > 30 websites, each doing between 200K-2M visits/month. We would have loved to test + copy, but every time we ran this experiment, we found huge differences.
One subtle nuance is that "generalizable" needs to be more specific than "this change increased conversions". The true goal of optimization is not the find the B that beats A; it's to find the global optimum.
The Conversion industry tends to similar language as the complementary/alternative medicine space. "I did this thing, it had this outcome. I believe this happened because XYZ. It worked for me, it will work for you!" (People telling stories which may or may not be true.)
That is also why clinical trials for interventions is so important.
FWIW, that's the goal of global optimization, a particual type of optimization, and one that rarely anybody on the market cares about wrt. business. Local optimization, "B beats A", is more frequently used, as usually all the business cares/can afford to care about is to find a C that beats B, if their competitors found the B that beats A.
If it was such a brilliant idea, DoorDash & GrubHub should change their sites so that links from their search results only take you back to their search page.
That's extremely different than the thing described here: "take you to a category page with something else entirely pinned at the top."
Maybe tech-savvy folks, or people otherwise paying close attention, but I don't think this describes the vast majority of people by any stretch.
DoorDash and Grubhub make the overwhelming bulk of their revenue from simple fees on the deliveries made. They surely sell ads (and para-ads like list placement), but the eyeball value of my one visit is vanishingly small relative to the $70 I just spent on takeout. The scales are just totally different.
If they're not showing you the restaurant you followed a link for, it's not because of advertising. It's likely because they don't have a contract with that restaurant and still want to sell you a meal.
Now, that's not ethical. But it's not because of "advertising".
Advertising, or trying to redirect to other restaurants paying higher commissions are the only possible explanation (aside from incompetence of course, but if you believe that I've got a bridge to sell you).
They're trying to maximize revenue by double-dipping. They want the $70 food order and another $X because you viewed some ads.
- You search for a specific BBQ restaurant on Google.
- You see an advertisement for that restaurant! But it's actually DoorDash.
- You click on that ad, and DoorDash initiates a location-based search for BBQ restaurants, putting their preferred partners at the top of the result list.
DoorDash is happy if you order from any restaurant through them, but they're even happier if you order from a restaurant that they get more money from.
Is that that what they prioritize over having a functional app for customers, merchants and drivers alike, and proper development deployment that doesn't incur large blackout periods?
Doesn’t Google let anyone bid on any word, including brands? 
Doesn’t it stand to reason that it’s at least plausible that other search services might do the same?
Also, showing all of the options may actually create more net value for Doordash since you're letting the customer know you have a wide breadth of options and this may create more long term loyalty.
That's what's being claimed in the original comment here.
That's what feels like incompetence (or, more likely, a "targeted landing pages" project that just hasn't been very prioritized).
I'm not gonna get Applebees after googling a different particular restaurant
I NEVER use Hotels.com for this reason, it is meant to extract as much as possible and take away the pricing power from the hotel.
It is not only allowed, but common, to bid on the name of a competitor. What you can not do is use their name in their ads. If I had to guess what's going on here is that at the scale DoorDash is at they're almost certainly utilizing dynamic keyword insertion where it grabs your search query and inserts it into your ad text. This is probably just an oversight honestly. I highly doubt there's some advertisers menacingly rubbing their hands together and cackling as they type in "saddleback bbq" into the ad copy. This is probably just an oversight on Google's part tbh.
Edit: I believe that you can stop this to some degree also by registering your trademarks with Google. Here's their ads policy. https://support.google.com/adspolicy/answer/6118?hl=en
"Ads may use the trademark in ad text if they meet the following requirements:
"Resellers: The ad's landing page is primarily dedicated to selling (or clearly facilitating the sale of) products or services, components, replacement parts, or compatible products or services corresponding to the trademark. The landing page must clearly provide a way to purchase the products or services or display commercial information about them, such as rates or prices."
If I were a delivery service, I would argue that my business operates as a reseller of the restaurant's offerings and that my use of the trademark is permitted per this clause of the policy.
Hopefully it's a violation and can be fixed on Google's side, since I find that to be the worst part of all this.
Door dash seem to be very good at getting large chains onboard, I wonder if this is part of it. Most small restaurants last less than a year, with this kind of strategy door dash can show large chains a nice dashboard every year of how much in sales they redirected from a small restaurant to their chain.
I think the larger problem here is that DoorDash & GrubHub are better positioned to pay a higher customer acquisition cost (better capitalized, higher margin businesses long term, and also more drive to create brand awareness in this moment), since they can convert for people who want alternatives to whatever they searched for, and on top of that they can more easily justify investing in tuning their marketing campaigns. So from Google's perspective, it may be hard to perceive a strategic advantage of fixing this.
What is surprising to me is that investing in tuning their marketing campaigns hasn't resulted in developing custom landing pages for those campaigns that, for example, might put people on a page for the restaurant in question (maybe with a sidebar for "looking for alternatives?"). That'd no doubt improve effective CPA for their campaigns.
a system that generates the maximum amount of monetizable events without frustrating the user or advertiser towards other platforms is the 'net win' from the ad platfrom perspective
This is one of the most depressing parts about working in tech for me. Basically no company is content with making a good product (for some definition of what that even means, that phrase itself is obviously subjective). Ideally a site/app is solving a real problem for their users, and they could make a simple, clear, and consistent interface that exposes that solution and trust the user to make the best use of it to address their need.
Unfortunately that never seems to be enough. Even for companies that I genuinely believe have good motives (trying to provide real value rather than trick people into buying snake oil), they also need to sell it. They track conversion metrics and then they need to optimize their flows, which inevitably makes things more complex and more obfuscated. Basically every PM or product-focused founder I've worked with is thinking about how to push the user to where they want them, rather than how to make things clear so the user can choose what they want to do. It's the behavioral economics idea of nudging run completely off the rails.
The thing is, it really works. So anybody not thinking this way is leaving money on the table by growing more slowly. And your competitors are doing this stuff too, so they'll eat your lunch if you're not good at growth, marketing, and optimizing conversions. It's similar to how I've never encountered a product person who takes the spirit of things like GDPR seriously. It's do or die and if you try to do things like respect users' privacy on principle instead of do everything you can to optimize conversions, you'll lose.
I've come to accept that there doesn't seem to be any way around it, this is the cost we pay for the tech products we use (and, contrary to perhaps a lot of others on HN, I do really believe that a lot of these services are genuinely useful in my life, and it's still worth it to me to use them despite this sad reality).
Your post nailed it. It's become positively disgraceful.
The only thing I would add, is that it's not just "tech" companies doing this. Every medium-large corporation is looking to squeeze more revenue out of existing customers no matter the moral implications, and no-matter whether it's good for the customer.
Someone will inevitably come along and claim this is how capitalism works, survival of the fittest, ruthlessly efficient markets, and all of that. Which, of course, is entirely reasonable if that "assume a perfect sphere on a frictionless plane alongside a perfectly rational actor" model of economics actually existed in the real world. It doesn't.
At the risk of sounding like I am moralizing, which I am but not in a negative or peacocking way, this is why I work to optimize my choices deliberately against financial gain and towards things like my community, my environment, and my society. I buy from companies that, best I can tell, pay their workers reasonably and act responsibly. I have walked away from projects at my employer--and, once, threatened to leave my employer (along with several of my coworkers) if my group insisted on proceeding down a path that it, happily, abandoned. I deliberately don't own a car, order from delivery services, or shop at Wal-Mart.
Why? Because while individual actions make a very little impact, setting the example for those actions gives others both the courage and the cover to take them alongside me. I can't sit idly by and wait for "the group" to do something, even to my own financial detriment. Make no mistake, I work in tech like a lot of us on HN--though I am not a software developer so perhaps not as well off as many but still doing fantastically well compared to the most--so I am coming at this from a position of privilege and have a very long way to fall before I hit bottom.
Most of us do, which is why it is incumbent upon us to make decisions not solely in pursuit of money and to translate that into our businesses and, frankly, if the shareholders don't like it then they can say so while I'm converting my corporate format to a SPC.
0 - "Detriment" here meaning that I'm spending slightly more than I "should" if I optimized output solely for cost and making slightly less than I "should" if I optimized input solely for gains.
If you ain't cheatin', you ain't even tryin' ... "privacy" is mostly just a sales job
You could switch the sites two around, or substitute any other web sites and have the same problem.
Or how about if you try to vote Democrat and instead of registering your vote you are shown a list of non-Democratic candidates with Republicans at the top? Or vice versa..
If you're in favor of the one, you should be in favor of the other.
To argue in favor of this is to argue for less consumer choice and power.
I don't see how this would qualify for fair use exclusions.
I'm not a lawyer, but this is failing a smell test for me.
In this case, it doesn't really sound like the owner of the restaurant was on the Doordash platform. The blog post doesn't seem to clearly indicate that they do. If they are not, I would think that there is an extremely strong legal case for copyright infringement, especially since Doordash is not even working to generate revenue for the restaurant, but redirecting you to a generic bbq restaurants page.
Hm. If they're doing that, and using every restaurant's trademarked content in their ads without an agreement in place, I think that would be a problem legally.
> In this case, it doesn't really sound like the owner of the restaurant was on the Doordash platform. The blog post doesn't seem to clearly indicate that they do.
The post explicitly states that there is a contractual agreement:
"Our only recourse is to immediately terminate our contract with GrubHub and DoorDash, which we are considering doing."
I'm not sure about that. How would non-authorized resellers work then? In the most absurd case, sellers on Ebay wouldn't be allowed to say what exactly they're selling. You would have to list something as "a watch" instead of "Casio G-Shock". Same goes for any used car lot, etc.
The primary cause here would be "trademark infringement", which requires "likelihood of confusion" in the marketplace . Doordash isn't particularly causing confusion here. They do, in fact, sell Saddleback BBQ from Saddleback BBQ. The only source of confusion I can think of is that the link doesn't take you directly to Saddleback BBQ, but rather to a generic list of BBQ restaurants (which Saddleback BBQ is on).
I'm not happy with it; their behavior is clearly not acting in good faith, even if on paper they have some contractual language that gives them a legal defense if challenged.
Now the (gradually becoming less common) practice of auto-creating order pages for restaurants that didn't agree to be a partner, I would agree should be totally illegal, or at least needs a very large disclaimer that the restaurant is not involved.
The recourse is exactly what the author of the article is considering; cancel the DoorDash contract.
the online menu needs to be separate from the pos that receives the order, the request for dispatch to the delivery driver should be another component, and the online marketing another, allowing the restaurant and delivery driver to mix and match. at a minimum the advertising+menu+order placement should be broken up from the on site order processing+delivery. And with regard to the roads, there shouldnt be a bitesquad, uber eats, grubhub, postmates, and doordash delivery driver waiting in the lobby at the same time all driving to the same neighborhood. theres obviously better ways to load balance and distribute the tasks, than by which company submitted the order.
I'm not sure I buy it. I work for one of the delivery companies, and small locally owned merchants give better margins and more profit compared to these giant chains who can negotiate really low commissions.
On top of that, you risk losing the customer because you have to keep them interested. They were literally looking to order food and you brought them back to the 'browsing around' stage. Is that actually a good idea? I'm not so sure.
DoorDash, Grubhub, etc. are becoming the place that customers go to when looking for food. And if they own the customer relationship, then your restaurant is a commodity. This is basically how I live already. I sometimes want something specific from a specific restaurant, but more often than not, I just want something and I browse through Seamless until I see some food that looks good and order it. I don't really know or care where it's coming from as long as it's reasonably priced and has decent ratings.
I know how heavy the fees are, so I tried for awhile to order from restaurants directly, but it's often horribly painful. You have to call on the phone, which is already a huge hit to user experience. Then you have issues with noise, accents, trying to accurately convey exactly what you want with any modifications, providing your credit card over the phone. It's just horrible and I always fall back to just using Seamless. I feel bad, but restaurants certainly don't seem like they're going out of their way to make the direct ordering experience as painless as possible.
These restaurants don't have the money or expertise to develop great websites or apps, and I don't want an app on my phone for every restaurant anyway. Nor do I want a list of dozens of bookmarks for restaurants, without a way to discover new ones. Not that it matters, because I think we've seen pretty clearly that consumers as a whole are going to just go with whatever's easiest for them. And anyone who is going to build out the infrastructure that Doordash and Grubhub have so they can own the customer relationship due to a superior UX is going to extract as much value as they can as well, or they won't be able to keep up with the competition in terms of UX or ads. It feels like a fairly intractable problem without regulation, which I'm generally skeptical of. But maybe that's the answer here.
I do wonder if Google and Apple could add "order online" functionality to their maps programs without too much trouble. Their interests might be more aligned with restaurants such that they could take 5-10% instead of 30%.
I think there are a lot of variables in play. First is about restaurants as commodity. The problem is that in the US, this is often literally true. Chain restaurant (franchises) all have the same menu, same suppliers, same process. Yet they still compete with "mom&pop" places where recipes are unique, food is locally sourced (sometimes), and they are pouring their sweat and tears into the business to make a living. People say they want to support their local businesses, but then convenience or price wins out in the end.
Another factor is the asymmetry between small-business owner restaurants and the nation-wide delivery platforms. Industrial food chains like Taco Bell and Chipotle's can negotiate national contracts (and pass the costs to their franchisees), but every independent restaurant is at a disadvantage. Independent restaurants are usually overloaded
already dealing with suppliers, employees, and landlords, and they are not savvy about all the issues with online advertising and marketing.
Finally, there is the deception. The platforms have slick marketing and sell one rosey outlook to the restaurants, get the contract signed, then do a lot of other shady things as this original article points out. It would be great if the restaurant owners could understand these marketing practices and insist on contracts that protect them. Given that most owners are probably too busy and not knowledgeable about online marketing, it would be great if there were small-business associations that stood up and insisted on fair terms for all small businesses. And absent that, there should be regulations and enforcement.
Yes, the online advertising industry definitely needs more regulation, and if the small businesses are too fragmented to stand up together, the government should step in to make laws and stop the abuses.
Wasn't Google's big tech demo for Duplex exactly about automating that away anyway
I sincerely and genuinely hope you are the minority because I simply cannot imagine living my life like this and I hope others are not either.
Yes, I know there is the archetype of person, especially in tech, that considers food nothing but fuel to keep their brain going. That's the kind that gravitated toward Soylent.
I think it's appalling. Food is one the the most important human experiences. It is specific, it is unique, it is cultural. I would put it on the same pantheon as poetry and music in terms of historical and artistic significance, and the gap between the bottom of the barrel and the truely life changing experience.
Now, I recognize I'm on the opposite end of the spectrum. I crave specific dishes from specific restaurants. But most people I know at least follow some form of branching decision tree: "do you feel like Mexican or Japanese?". "okay, sushi or ramen?". "that place across the street or by the park?". "okay should we call them or see if they are on doordash?"
I do agree with your other points about the technological factors here, but disagree with the foundation you built it on.
a. Take money from the low-wage worker at the restaurant.
b. Take money away from the low-wage delivery worker.
I think I'll choose the one that doesn't divert 30% of my money to a monopoly-seeking "start-up" in California.
Previously, they would also take these fake websites and use them to claim the official website on the Google Places listing so they can show up at the top without much SEO.
But often their fake websites would show up organically and appear as the real website, and then they’d take a 30% fee for “referring” the customer.
I learned about this when I was trying to sell an online ordering platform so restaurants could setup their own websites with ordering. The problem was sales was slow and expensive, and small restaurants weren’t savvy enough to understand they’d need to spend a lump sum to setup their websites to fix the problem, or even how or why the problem existed.
I asked a Colombia friend about it later, he just laughed and said: Colombians don't visit .co domain. They are all spam. But .com we trust.
And while tricking a company into a referral fee is bad, if the companies weren't signing mystery contracts there wouldn't be a referral fee. They'd get full menu price and be fine.
Here's the response:
> "Grubhub has never cybersquatted, which is identified by ICANN as 'generally bad faith registration of another person’s trademark in a domain name,'" the company said in a statement. "As a service to our restaurants, we have created microsites for them as another source of orders and to increase their online brand presence. Additionally, we have registered domains on their behalf, consistent with our restaurant contracts. We no longer provide that service and it has always been our practice to transfer the domain to the restaurant as soon as they request it."
Totally agreed that Grubhub could've clarified this better. SMB Sales is hard, and it's not easy to communicate every aspect of a contract to every single merchant.
Not defending phone orders here.
No company lines out every single little thing they do during a sale because the whole point of using a company like Grubhub is "we'll take care of this eCommerce thing for you." I'm with you in that they should've been more explicit about microsites given that more and more owners have to be aware of their online presence. I believe it's an understandable mistake given Grubhub's size, and that the amount of feedback around microsites was likely really low (or else they would've gotten ahead of it).
I also understand your skepticism given that Grubhub hasn't done a great job of handling the narrative around these things.
It's a surprising, unasked-for, and disagreeable experience for a restaurant owner.
If they ask for a microsite when it is offered, sell it to them. If they don't, don't.
Hiding behind "No company lines out every single little thing they do during a sale" or "getting people to understand contracts is hard" is bullshit.
This isn't a harmless EULA. Contracts with an asterisk'ed "(oh and by the way we'll do a bunch of other shit on your behalf), sorry, there's a lot of stuff, trust us, just sign here" are the ethical equivalent of a fake "Download" button. Take the time to get your prospects to understand what you're offering. If taking the time loses you sales, take a long hard look at what you're selling or the prospects you've chosen. If the people making the sales can't be counted on to take the time, get salespeople with more integrity.
Hiding behind "[we did it without telling them because] the value is demonstrable" is, similarly, bullshit. Demonstrate the value. Your customers may agree with your demonstration and choose to purchase a feature, or not. This is called sales.
Claiming this is an "understandable mistake given Grubhub's size" is, you guessed it, bullshit. That translates to "Google/other big companies routinely abuse their customers without consequence, so it's OK that GrubHub does too!" Getting away with something is not the same as acting ethically.
You're all over this thread defending this practice as a sales misstep or a messaging failure. It's neither of those things. It's an instance of the distressingly common habit of software companies to knowingly act unethically towards their customers--usually for the clicks/traffic/sale, and rarely when they misguidedly think they're doing the right thing--because they know they can probably get away with it, and, when called out, brush it under the rug as a "misunderstanding".
GrubHub had three choices: behave ethically, without glossing over what was going to be sold (this would have been harder and may have resulted in slower growth); behave knowingly unethically; not build/sell the thing at all. They chose the second.
But for anyone with a hint of business sense, why would you hand over the keys for your online presence to another company? Assuming the restaurant owner doesn't control the domain in this relationship.
I am generally skeptical of class-actions, but this seems like a legitimate subject for a (well-run) class-action lawsuit for the benefit of parties who were actually wronged.
A dutch Uber eats like company called "Thuisbezorged" made there signup price really cheap. like 2% of a restaurants income they made on the site was payed for using the platform. you get a personal website with a menu but after a while they started to push this really hard, buying automated domain names that roughly look like the name. And they started to spend google adsence for you sometimes without your knowing. restaurants now pay 30% of what they earn on the website to the platform and there are special rules that prohibit them from doing special offers to lure people to there own site.
So it sound like this stuff has already bean going on in the past 5 years, atleast here in the Netherlands it has.
I generally try to order either curbside or delivery through the restaurant's own site. I figure even if they use a third party then, they're using the one most advantageous to their business.
I want my favorite restaurants to survive this pandemic, but I couldn't care less about these delivery startups.
Does the tip go to DoorDash, or to the person that delivered for DoorDash? I want the restaurants to survive too, but I have to imagine a lot of these DoorDash delivery people were either Uber drivers or employed somewhere else a few weeks ago until furloughed, and may have a less stable income than someone working at a restaurant which is getting takeout orders.
Basically, tipping an average amount contributes to the problem. Everyone would have to keep raising the tip amounts but that’s not easily coordinated.
There is lots of evidence of some delivery companies using your “tip” to cover the base salary of their employees. So if a driver is guaranteed $5/hr, and you tip $3, DD/UberEats/etc. will claim they only have to pay out $2 for that hour.
It appears they haven't changed that behavior yet, despite getting a lot of bad PR and promising they will look into it.
Corporations are not moral agents. They cannot be shamed into acting to the benefit of the majority, and their promises mean nothing.
In a lot of states, at least for restaurant workers, this is normal practice and explicitly allowed for by law. In those states, this has been common practice since ... forever? The laws there require restaurant owners to pay the waiters such that their wage + tips combined should be at least the minimum wage. If a waiter makes more than the minimum wage in tips then the owner only needs to pay a less than minimum wage amount.
So as an example, in Texas, if a waiter made more then $5.12/hr in tips, the restaurant owner needs to pay him/her only $2.13/hr.
The question I have is: Why are we OK with this for waiters but suddenly get upset when this happens to the drivers? Do you ask your favorite restaurants their policy?
> Europe eventually did away with tipping. But in America, pressure from powerful corporate interests resulted in a two-tiered wage system for tipped and non-tipped workers, institutionalizing a highly racialized system of economic exclusion. Formalized in 1938 in the first minimum wage law as part of the New Deal, this separate and unequal system stated that employers were not obligated to pay a base wage to workers whose minimum wage was met through tips. (emphasis mine)
Tipping, and the laws surrounding it, are based on forcing minorities to work for substandard wages and opening them up to exploitation and harassment with no accountability for their employers. Appealing to the laws is appealing to inherently racist rationalizations of what fair wages are and should be.
People know how tips work. How tips work is the problem that needs to be solved. History and context matters, in this case and many more.
This argument is hard to take seriously.
Do you really think that eliminating tipping would do away with racial wage disparities and sexual harassment? If only our problems were that easy to solve.
Do you really think straw-man arguments make any headway on HN?
It's not OK, and it's part of the reason why I don't often go to restaurants even though I could afford to eat at one every night.
There is one difference, though, which is that restaurant staff are well aware of the nature of their pay.
Most DoorDash drivers didn't realize that they were being gypped. I know this because, when I was driving for GrubHub, I would sometimes bump into DoorDash drivers and I would ask them about DoorDash's pay model. Most didn't have a clue that they were getting tipped but that the tip was disappearing into the pockets of DoorDash. I'm sure that DoorDash had something about that in 6 pt font somewhere, but not everyone will read or even comprehend that. Unless the customer asks if you got the tip, there was no way for a driver to even know if they had a tip when that tip did not exceed their base pay. At least restaurant workers know that there are tips and can see the full amount. Until this came out, a lot of drivers considered DoorDash to be supplementary because the customers were "stingy", when in fact that may not have been the case.
But no, I do not ask my favorite restaurants their pay policy. Perhaps I should.
EDIT: Another key difference between restaurant workers and food delivery app drivers is that customers of DoorDash almost always tip ahead of time, so it's not as if the driver can do much if anything to improve their chances of getting a bigger tip. With traditional tipping, it's implied that an advantage in being paid mostly in tips was that better service could equate to more pay. DoorDash a few years ago was taking advantage of people's common understanding of what it means to tip someone and keep both prices and costs down, with the driver being the one to get screwed and not even realize it.
First, I'm only really bringing this up because I used that same term for much of my early life without knowing it's origins, so I think it's worth discussing because of the way it's unconsciously used by many, and not as an attempt to chastise. The term "gypped" has some connotations once you know where it's from that make it hard to ignore and it ends up distracting from the point. After the origins become clear, it's sort of like hearing "jewed" as a verb. Gypped may be somewhat common, and may be used without ill-intent and unknowingly the vast majority of times, but it's also one of those words that's better dying off.
It is implied, but generally not the reality. The correlation is fairly poor:
I think the real question is why we tip some service professions and not others.
A tip before you receive a service is indistinguishable from a bribe used to prioritize your service.
I don't understand why this is the norm, and why so many people play along. It would be so much more sensible to tap the user on the shoulder after the delivery to ask them for their tip.
That would be as problematic as what you described.
Why is this matter though? at the end of the day, what matter is my final net pay. It doesn't matter if the company take all my tip or deduct something, or some other complicated calculation, all i care is the final amount. If I consider that amount too low for the work I did then I don't do it.
Yes of course I would always want to make more. For example: The company can say my pay is $100 but then after some complex calculation, I get $50. I don't care how they calculate it, all I know is from my perspective my pay is actually $50 (not $100) and I would then use this $50 number to compare with my total effort (normal effort + extra effort).
>but it's not like the net pay of delivery drivers is particularly good
Then I simply won't do it. This has nothing to do with the pay model
This is basically the same model used by restaurants to pay front-of-house staff. They guarantee minimum wage, but actually provide a lower base pay and use tips to make up the difference.
As I stated elsewhere in this thread, the nature of a delivery app "tip" is different from the restaurant industry. Not only do restaurant workers fully understand how their pay model works, but they can get higher pay for providing better service. This isn't possible for most delivery apps because customers almost always enter a tip amount when they pay for the food, before the driver even has a chance to get to the restaurant.
This is why customers should tip their drivers in cash.
EDIT: The reason I brought up Tony Xu is because his company should be always paying its driver's base pay without taking from the tip. We can get into the semantics of who's paying who when a tip is seen as a "subsidy", but that's not how we should be seeing it in the first place. By potentially paying little to nothing for a delivery being made, DoorDash was able to keep more of its earnings from the delivery. No matter the angle you look at it, DoorDash were the ones taking home more money because of the pay model.
* Worker is shown a $5 guaranteed paid.
* Behind the scenes DD picked some base pay. Let's say $1.
* If the customer tipped < $4 then the worker got paid out exactly $5 with DD paying out the difference between the actual tip and the $4.
* If the customer tipped >= $4 then the driver got paid $5 + tips - $4.
So in your example DD paid $3 and the tip was $5 with a guaranteed rate of $5. This means that the worker would've been paid $8.
I agree though, not showing the base pay was very misleading. However, tips never actually replaced the base pay.
: This forbes article has a screenshot of the old page describing the model https://www.forbes.com/sites/bizcarson/2019/06/27/doordash-t...
"Wrongness" and "illegality" are not the same thing.
> As DoorDash grew to become the biggest on-demand food delivery app in the country, it began doing something unconventional with customers’ tips: It used them mostly to subsidize its payments to delivery workers.
That is something Uber has been caught doing. Uber now makes it against ToS for drivers to ask. : /
(I totally understand if you don't want to answer)
And if I'm going to pick who to support from my own limited funds, it'd be the people working at the restaurants I very much want to patronize when this is over. Some of my favorites are already gone for good.
For me, if it comes down to the cooks and limited waitstaff left at the restaurant and getting paid by the restaurant get a few extra bucks from me or someone that lost their stable income and is scrambling to make ends meet, I definitely want it going to the latter. I can't be sure what situation the drivers are in, but to me it seems more likely their position is less stable.
When was just about done filling out my order, I added a big tip, and my girlfriend reminded me it was not going to the restaurant at all, which had completely flew over my head. My entire view of delivery services has changed during this pandemic, thanks to these restaurants coming forward about how much they are getting screwed.
But we still use them because there is demand and so our revenue looks strong.
I used to only order from Seamless or UberEats because their "streamlined" experience.
But now that I am hearing so many terrible things that these VC-backed startups are doing to small restaurants, I now specifically look for the restaurant's website, or even just call them directly and order a takeout.
(I know this is about it being for the driver, but the overall point still stands, I think.)
I don't think that's true. That used to be the case, but it looked like DoorDash reversed this policy last June:
The exception appears to be ChowNow where, I think, restaurants pay a flat fee as opposed to the percent of sale business model. Plus I can pick up, so the tip that you leave is really the restaurant, though who knows if they’re skimming from their staff.
> ChowNow makes it pretty easy for restaurant owners to understand the implications of Google’s new button. It offers a “Profit Protector” program that essentially inflates menu prices to make up for the price of the commission. It also assures owners that they can opt out of ChowNow’s Google services anytime by contacting the platform’s support staff.
And my wife and I have discovered the joy of eating in the car during the pandemic. If we drive 20 minutes to a place it's best to eat it right away than to drive home and have everything get cold and soggy.
Maybe this is mostly a philosophical point, but to me, if you eat the food, you just had a bigger order. You didn't "tip".
I offered a hack around this.
Perhaps, like Galilei, I was too early with too radical an idea to find acceptance :)
Better to order something that you can keep in the fridge to eat later, or something for the animal(s) that live with you to munch on.
I refuse to use delivery apps because they skim ~10-20% off the top of my orders. I understand the utility of DoorDash -- there are a lot of customers who want the single interface and can't be bothered to search for a restaurant individually. But if you care at all about this sort of thing, with a simple search you can find the phone number of the restaurant you like and call them up. There will always be someone by the phone, this is how restaurants operated for 50+ years! The ordering process is, paradoxically, easier and less time-consuming than going through DoorDash. I find the app to be slow, with way too many menus and scrolling. Even the browser interface is kludgy because they insist on making huge buttons that take up a large part of the screen, so I can only consider like 4 options at a time on my screen. It's been easier for me just to get a PDF of the menu, read off the stuff I'd like, and go pick it up 20 minutes later. Bonus -- the restaurant gets 100% of your tips. In this era the rent-seeking behavior of these app companies really becomes apparent. It's not easier to do it through them -- they add no real value. Clearly they don't add value for the small restaurants either: they're shafting the small ones in favor of those who have a corporate structure and throw millions of dollars into ads.
Stop feeding the ad platforms that use sneaky tricks to make the profits they promised to their investors. It's a self-perpetuating cycle if you keep letting them feed the VCs' expectations to the detriment of the people, the end users.
I stopped shopping at Wal-Mart around 2007, and Amazon in 2016. My purchased don't make a dent. I share my opinions and know several others who don't shop at Wal-Mart, but I remember during the 2008 financial crisis, people who had previously refused to shop at Wal-Mart were doing it again, verbally hating it, because they had kids and tight budgets and they saving nearly a $1/item on some things.
We can try to affect things with our purchases and advertising those decisions to others, but honestly, they don't even compare in the slightest to the power of corporate advertising at scale.
Couldn't you say the same thing about actual voting, though? In an election, what difference does your one vote make, in the grand scheme of things? Has there ever been an election where the margin was low enough that your one vote would have made a real difference?
American voting is pretty next to useless. I did a whole video on that:
The most interesting and IMO overlooked part is how easy it is to communicate to the voter how they should vote. Approval voting is easy -- at the top of the ballot just say "check the box next to each name of the person who you approve of, and check as many as you like".
There's a really interesting part in the documentary "Food Inc." Where they're talking about big industrial food processing places destroying quality, etc.
At one point he interviews Walmart's head of milk ordering (whatever it's called).. and the person has some really interesting insight. Customers didn't want to buy milk from cows that had whatever hormone... and it became such a big deal that Walmart saw sales of that type of milk plummet, so they stopped buying and selling all milk with that hormone.
They now don't stock or sell any. Period.
So in fact, when people vote with their dollars companies as big as Walmart do actually notice, and they do make changes for the better.
This is mainly about changing culture, which informs laws when that culture becomes widespread. And it helps me sleep at night ;)
You aren't going to kill these aggregators, but you are supporting the alternative to them.
> The ordering process is, paradoxically, easier and less time-consuming than going through DoorDash.
The requirement that I call makes it harder and more frustrating to use than DoorDash. I can order DoorDash in a meeting. I can do it on my way to work on the train. I can start my order, pivot to a new chat message, and return 5 minutes later where I left off. I have to hope that my order and my address is not misheard. If I have a complaint, I complain to DoorDash through its interface, not some person on the phone and whatever process they have for resolving things.
The value of DoorDash is that it becomes something I can do in a scrap of time rather than finding a time to do it.
Customers, drivers, and restaurateurs all hate doordash, but they have no choice because Doordash uses their oodles of VC bucks to squash competition and underhanded shady shit (like putting up menus without consent) to force restaurants to participate and hook them in.
Why don't they do that now?
The choice is to regress, and restaurants were doing just fine 5+ years ago.
Platforms like DoorDash et al obviate the need for that, in return for a transaction fee. Restaurants appear to think that this is a good deal. If that's no longer the case, there is nothing stopping them from taking those transaction fees that they lose and using those funds to hire their own couriers — the labor market is pretty loose right now.
1) delivery-as-a-service without having to manage that last mile delivery themselves
2) easy access to aggregated demand without having to reach customers directly and commensurate marketing costs
In return for that, they pay a transaction fee and lose some leverage.
If restaurants find letting go of (1) or (2) to be "too difficult", then that means that the apps in question are indeed providing value and convenience to the restaurants.
If the restaurants don't want to have to deal with the downsides of being on a platform, they will also have to forego the upsides that come with it. There is no free lunch (heh).
The value to the customer here is indisputable, and even the delivery logistics value proposition is clear (although at least here in NYC almost all seamless delivery people work for the restaurants), the “stolen” demand is completely shitty for restaurants. I don’t want to regulate these apps out of existence, just think we can find a better way to do this.
But maybe these delivery services have grown aggregate demand for restaurant food by making it more convenient for customers? Anecdotal, but I used Uber/Lyft probably >50x more than I ever used taxis outside of NYC, and I've gotten a lot more takeout than I used to since these delivery apps became available.
If I still lived in NYC, the differential would've been much smaller, but most of the country is waaaay behind NYC in taxi/delivery usage per capita, many people are coming from near 0 in those categories.
I think the long-term here is probably just different, not worse. Many restaurants will go under, but new ones will arise that optimize for this. See the ghost kitchen phenomenon. And hopefully a combination of restaurant and user revolt, the threat of regulation, and competitive pressure from other delivery services will drive fees down to something more reasonable like 10-15%.
The “stolen” demand is a function of the fact that other restaurants refuse to stop using the platform, ostensibly because they also see value in continuing to use it. Consumers will only use the app if there is sufficient supply on the other end. Some restaurants have seen more value than others since the inception of these platforms. There is a spectrum of outcomes, which you would expect in a competitive market.
The “structural change” here is that restaurants have become commoditized and are now competing with each other. There will be some restaurants that emerge as winners, and some as losers. I don’t personally care about the losers if, in the aggregate, the restaurant industry is made more efficient, and consumers are better off.
I’m not being disingenuous, I’m being rhetorical.
other restaurants refuse to stop using the platform
1. Courageous Restaurant bans GrubHub, Doordash et al. Delivery-insistent demand shifts to Competitors 1-4, meaning they get substantially more of these revenue-neutral (or worse) delivery orders.
2. Competitor 1 gets sick of this is and likewise bans GrubHub, Doordash et al. Delivery-insistent demand shifts to Competitors 2-4, meaning they get an even higher percentage of their orders being these revenue-neutral (or worse) delivery orders.
By now, both benefit by word of mouth regarding ordering and traffic becoming more streamlined by the absence of the delivery service-specific retail point of sale system foibles, less traffic at entry and pick-up, and consistent quality. Also, some drivers abandon the services to do direct delivery as restaurant employees, at least during peak hours, and the saved 35% can be split between restaurant and employee.
3. Competitor 2 gets sick of this is and likewise bans GrubHub, Doordash et al. Delivery-insistent demand shifts to Competitors 3-4, meaning they get an even higher yet percentage of their orders being these revenue-neutral (or worse) delivery orders.
4. Competitors 3-4 are now drowning in low-profit delivery orders and the traffic impact (foot and vehicle) alienates what's left of first-hand customers. Every negative delivery experience costs both the delivery service and the restaurant another customer. One abandons delivery services, the other folds altogether.
At this point the businesses in question have enough information to decide for themselves if they think this whole deal is worth it for them.
If I understand GrubHub's model correctly, when a restaurant receives a phone order via the number listed in GrubHub they are still on the hook for the same marketing commission as if the order came from the GrubHub website. I may be (and hope I am) wrong about this, though.
I mean that's fine, but it ignores the fact / elephant-in-the-room that the primary purpose served by these platforms is delivery logistics.
If I want / need delivery, my list of choices for "just call up directly" decreases to those restaurants which actually employ delivery staff, which is anecdotally a much, much shorter one.
I wholeheartedly agree with ordering directly from the restaurant, but I can't think of anything they did in that transaction sequence to warrant a tip.