'It’s Parasitic': Little Star Pizza Owner Lambasts DoorDash, Uber Eats

https://www.sfgate.com/food/article/sf-little-star-pizza-challenges-food-delivery-apps-18142694.php

by sharemywin • 3 years ago

56 34 3 years ago

sharemywin5• 3 years ago

what if doordash and the other apps go the way of groupon?

I'm sympathetic to the plight of long-standing restaurant owners, who signed up for a different role in a different environment and didn't get a say in how the ecosystem evolved. But "parasitic" doesn't seem like a reasonable analysis. Food delivery apps offer a wide selection of choices that consumers find valuable. Valuable enough that, as the article describes, they're often willing to pay more than they would if they had ordered directly. Why is it parasitic for delivery apps to satisfy this demand at prevailing market prices?

An argument that this is socially bad would be another thing. I could imagine a convincing article describing how restaurants are in a more precarious state than they used to be, and this has non-obvious second order effects on the quality of food or the general quality of life in a city. I don't understand the idea that there's a general moral obligation for delivery apps to charge their business partners less money.

sharemywin5• 3 years ago

One problem is they aren't very transparent on fees. They charge both the business and the consumer. Probably offer the driver the minimum amount possible to entice them to do the delivery. And the business fees eat up much of the profit in the transaction. Also, this whole thing was built on free investor money in a wildly growling economy.

What happens if demand sinks because consumers have to be more diligent with their money and 20% business fee + >$10 consumer fees + 20% tip isn't a good value anymore.

it also drive up the prices on the rest customers because the business needs to raise prices across the board to survive.

SpicyLemonZest3• 3 years ago

For most consumer products there's no fee transparency at all. When I buy a cabbage, I just get a price, not a detailed breakdown of how much money goes to the farmer, delivery truck driver, and grocery store. It might be higher or lower depending on where I shop, and I might be willing to pay more if the store is nicer or more convenient or I think they're more socially responsible. But I don't get the idea that transparency as such is an imperative here.

If market conditions change and consumers have to be more diligent with their money, or funding conditions change and the delivery apps all discover that their business models are unsustainable, presumably customers can simply start ordering directly from restaurants again if that's the best way to get the food they want. It doesn't seem like there are any structural barriers to that.

Zanfa• 3 years ago

Not sure if parasitic is the correct term, but there's little to do with market prices when it comes to food delivery apps. They're all basically dumping with VC money, burning billions, driving out legitimate competitors.

wwweston• 3 years ago

I think you just made the argument, more or less -- there's an implicit moral obligation in noting that there are negative social impacts.

As for whether the term parasite applies:

- They move in and take over the channel for demand, often burning VC cash to do it

- But they can't meet that demand for the product themselves, and therefore can't survive on their own

- Once they sit in between those who can meet demand and the market, they mess with the cost structure without apparent consideration for whether or not they kill any given host

One can imagine a more symbiotic relationship but if the restaurant owners are basically tell us that it's already reaching the point where they die if they go off the apps and they die if they stay on, it's pretty clear that something is wrong.

namaria• 3 years ago

Makes me think of the pizza app in Silicon Valley. I just realized they were likely satirizing this very model. Who knew it could become so entrenched...

SpicyLemonZest3• 3 years ago

Any restaurant that finds itself in financial trouble can point to delivery apps and say, well, if they charged me less money I'd have more money. What's not obvious to me that this is any different from saying that they'd have more money if their landlord charged less money or their suppliers charged less money.

It'd be one thing if delivery apps were "taking over" the demand channel in the sense that they're preventing customers from ordering directly. But that doesn't generally seem to be the case. As the article covers, it's not like delivery apps are even cheaper. (There was a story a while back where Grubhub was creating websites which looked like direct orders but weren't - I have no qualms about calling that parasitic.)

gumby• 3 years ago

A post on HN within the past couple of weeks analyzed the take: https://news.ycombinator.com/item?id=36146111

Order directly from the restaurant (same reason I order mac apps from the developer even when I could use the mac app store).

rahimnathwani• 3 years ago

The place I go to for takeout sushi uses a site on Chownow for online ordering. This SaaS platform charger the restaurant a monthly fee, rather than taking a cut.

I just Googled Chownow, and apparently you can browse local restaurants as well: https://www.chownow.com/

jasonlaramburu• 3 years ago

Little Star Pizza is one, if not the best, pie in the Bay Area. It's very well known and loved. It is surprising that customers wouldn't be willing to order delivery directly from the restaurant, especially if they could pass along some savings.

lotsofpulp2• 3 years ago

The idea that people would rather pay unknown extra dollars to middlemen to avoid picking up a phone and talking to someone for 2 minutes is so bizarre to me.

AuthError• 3 years ago

It saves you the trouble when your order goes wrong and way easier to argue/negotiate, it's the same reason airbnb works (else why wouldnt you just exchange number with the host and rent it directly)

CogitoCogito2• 3 years ago

I’m in my late 30s and this is how I know I’m old. Calling places is just so easy. I don’t understand the need to replace it with some new process.

121789• 3 years ago

That feels a little reductionist. You’re paying for stuff like order tracking, customer service, easy tipping, a way to talk to the delivery driver, and a centralized place to choose stuff. I don’t think those things are worth the price anymore, but they have value

flangola7• 3 years ago

Why? Phone calls are the worst. Car wrecks induce less anxiety, and I've been hit twice.

Ekaros2• 3 years ago

We have had online ordering for over decade now. Nothing magical or expensive in that tech...

jen20• 3 years ago

I wouldn’t pay extra for it (and don’t order food often, since it’s always cold and late), but ordering something over the phone can be rather difficult in America if you don’t have an American accent. Don’t even get me stated on drive-thru speakers.

The killer feature of Doordash is the fact that you can order in a structured textual form. The feature that kills it is their inability to provide a heat-preserving bag for drivers.

mercutio2• 3 years ago

Little Star does not hold a candle to Zachary's. IMHO :)

prepend• 3 years ago

The article doesn’t say customers wouldn’t order directly from the restaurant.

I think that restaurants don’t want to hire their own delivery drivers and staff.

These Togo orders are basically “extra” that typically wouldn’t exist. And delivery companies know that. So it may be 30-50% of revenue but that’s in addition to what the restaurant would pull down as dine in only. Or just Togo where customers get it themselves.

I think there’s an opportunity for a more efficient Uber eats competitor that charges lower prices. But I think restaurants will just pay their fees.

In my area restaurants just keep jacking up their fees to cover commissions and people keep ordering. My favorite pizza place is $20 in person and $30 through Uber eats. They fired all their delivery people about two years ago.

People order McDonald’s for a $20 happy meal. So people just keep paying.

AtlasBarfed3• 3 years ago

I wonder if mixed electric vehicles will help. An e-bike is a totally different cost factor than a full fledged car. Just zip around on an electric scooter, bike, or moped for delivery and it is cheap.

I don't think delivery is necessarily "extra". It must be cannibalizing some people that come to the restaurant, and that means they don't order the most profitable items on the menu: drinks.

A delivery service that uses those modes of transport might actually be cheaper and superior to all involved than the current ones in sufficient density areas. A scooter, blade, or moped can quick-park on a sidewalk a lot more easily.

My wife is one of the people that sometimes orders $20 McDs when I'm on the road for my job. It drives me nuts. Twenty fucking dollars for some of the worst food in America.

joshu• 3 years ago

the landlord probably extracts the vast majority of money from them. why do we give them a pass?

sharemywin5• 3 years ago

they aren't getting a pass if they rates on the loan they hold keeps going up.

AtlasBarfed3• 3 years ago

My story about Chipotle and the delivery services: They had a separate production line for the delivery services, and the retail/in-house customers had another, which had less people. And of course, the retail people got less chicken (kinda big in my mind, a chipotle burrito is crap without a heaping spoonful) than the separate production.

And I'm standing there wondering why you're treating these delivery apps where you get maybe 2/3s of the revenue as THE PEOPLE WHO WENT TO YOUR STORE, and probably are ordering fountain drinks as well which are basically pure profit, even remotely as close as the delivery apps.

As a manager, I would instruct workers to be generous for the in-store crowd, or ensure "good" burrito makers are on the in-store line. But... it's fast food, and I should find local burritos besides the rapidly declining Chipotle anyway, which was never that good anyway.

code_duck• 3 years ago

What would be the rationale for giving smaller portions to in-house orders?

AtlasBarfed3• 3 years ago

I don't think they are doing intentionally, they just were being lackadaisical. Chipotle is always make or break based on the meat portion. If it's too small, the rice and other filling dominates and it's not that good

tibbydudeza• 3 years ago

I went to KFC (walk in) for the first time after Covid as I offered to buy lunch for our cleaning staff.

Surprised how much smaller they made the counter space.

3 self ordering kiosks and just one cashier to take cash orders and there was a bigger counter just for delivery orders.

The delivery drivers outnumbered the walk-in customers.

'It’s Parasitic': Little Star Pizza Owner Lambasts DoorDash, Uber Eats

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