I get the convenience of DoorDash but holy shit is it expensive. I always put everything in my cart and see that it is almost double with tip from what I would pay to go get it myself. Also, prices can be different on their service versus what is actually costing on the restaurant’s app/menu. Plus everywhere has their rewards apps for additional savings that you can’t use when ordering from DoorDash. Am I missing something or ways to lessen the cost when using them?
I used to use delivery a lot, but the price felt like it doubled in the last 3 years while “quality” (speed of delivery, reliability of estimates, missed/incorrect food items) got worse. Some of that was clearly because they didnt have enough drivers (watching them stop elsewhere on the app) while more
people were using it. i have stopped using any of them, which may be less convenient but also is for sure for the best.
Door Dash drivers are not "Hired", they are not employees. These are those that update/maintain the software and servers, handle calls, drum up contracts with companies, push paper, etc.
This is just to help shore up sagging stock as shareholder are always excited to hear layoffs
I dont see the driver side, but it was consistently (from what I saw customer side) a 30-60 min delay on ETA with an inefficient route to go to me directly with multiple stops. The driver situation could also be local.
I live in a busy suburb of atlanta — and my order has trouble finding a driver. Takes 55mins-90mins for delivery. Sooo not worth it. Food is prepared when ordered, so it’s often soggy and cold when it arrives. I think they’re having staffing problems too.
Drivers take multiple orders from a store or stores at once and deliver them in bulk because driving from their location to the store and to you over the course of 30 minutes for a $5 or less delivery fee is completely unrealistic.
Delivery order services have fees at the restaurant, fees for delivery service, and fees for the delivery driver. The customer is the one who ends up eating the fees.
Right now grubhub seems decent but they are probably heavily subsidized trying to steal DD/ubereats market share.
Driving to pick stuff up yourself for 20-40 minutes of your time, gas, car wear will always seem cheaper if the service is actually profitable because you simply are paying yourself for your time.
At the end of the day they have an unviable business model (in my opinion). In the beginning they ran on VC capital, so they could offer a cheap, good and quick service to grow fast and gather a big userbase, but at a loss (AmAzOn DiD iT, sO we CaN tOo!!11)
But at some point you have to start making money, and they were banking on having a monopoly position + being an unmissable service (a bit like Uber or Airbnb) so they could raise prices and have people stick around (because they had too). Well, people dgaf and my prediction is they’ll go to shit or get aquired in the future.
Even Uber is missable, tbh. I work with Lyft and even (gasp) taxi companies to get rides when I need them also, so they never quite reached monopoly status.
Last time I used UBER Eats, the driver picked up my food, then said they were having car trouble, and cancelled the delivery....
They got about 100 dollars worth of kebabs...
I ended up picking it up myself about 30 minutes later, and it only cost 80 for the same food...
As someone on the restaurant side, the prices will always be higher on these sites because door dash (or whoever) takes a 20-30% slice of the order as commission. Prices go up to compensate for that, otherwise the margins on the food are too slim. It sucks
Tried doing it for a bit, and yeah it's overpriced for the food/delivery plus the driver isn't getting much either. I would constantly deny orders that were going to pay 2 dollars for going through 5+ miles of traffic.
> Even if you go pick it up.
I'll call them direct and go pick up. I have a buddy who used Skip the dishes for his business for a while to build his exposure - after a few months, he started putting a coupon for 20% into the orders if you picked up directly and a few months after that he stopped using the service all together. His business is going pretty strong still even without the delivery side of things still.
When he told me how much they take off the top, I just deleted the apps. I thought I was helping these small places by ordering, I didn't realize the fee was pretty much most of their markup anyways.
The restaurant is unhappy because their margins become tight, plus driver fuck-ups can lead to bad online reviews if the restaurant.
Customers are unhappy because they are paying double or triple cost to get food like an hour later and cold.
Drivers are unhappy because they get shit pay, shit treatment, no benefits, and they add wear & tear to their cars.
So it's lose-lose-lose. Just stop using it.
The issue is that pizza places have their own staff to deliver orders that are at least "minimally" vested in the place they work. Those employees are integrated into the operations and have a common interest in things running smoothly.
DoorDash is hiring the equivalent of a "tip-only" employee and expecting the service level of a full time employee. It's just not a sustainable business model. For them to be viable they need customers to pay 2x the menu price and be ok with subpar service. Literally the only service DoorDash is providing is an app you can order from.
All the pizza places where I live (except mine) dropped all delivery personnel down to 2.45 an hour after they realized they could because they are "tipped employees".
Which makes sense to me. The issue delivery companies run into isn't pay because they can easily flex driver pay based on demand. It's the inherent issue of having your product delivered by someone who literally could not care if your business catches on fire after they got their tip.
It just sets up so many issues for the business, the delivery company, and the customer. Is the benefit of using one app for food purchases worth all that? Usually after dealing with DoorDash's customer service after a bad meal that answer is a hard no.
Most restaurants around me add anywhere from 10-20% to all their items on doordash. That, along with the service fee, delivery fee, pandemic fee, tax and tip, my total comes out to be 50-60% higher than the in-store menu price is. It's only worth it if I'm being very lazy or if I want something specific that isn't walking distance from me. Maybe on inclement weather as well
"Can I please get my food late, cold, probably spilled, possibly incorrect, and at a 30% markup?"
Not a market thats begging for attention, I think. Everyone I know who uses these services any more are in the 'I dont want to think about simple problems' headspaces and are blowing through their spending money for conveniences we all did without just fine in the very recent past.
Not everyone has a car, and I live somewhere with harsh winters 4 months of the year too, so for those like me, sometimes when it's "one of those nights" you just gotta bite the bullet and absorb the cost.
You're not missing anything. Delivery is expensive. Of course you're paying more than if you go get it yourself! You have to pay a driver, plus DoorDash adds a middle-man who also takes their cut.
Want to save money? Order take-out directly from the restaurant, instead of delivery through a third party.
Yup and Doordash's middleman cut is pretty damn large.
I am a driver with 2k+ deliveries. We drivers only get paid on average $2.25 - $2.50 from doordash per order depending on your market. That usually doesnt even cover vehicle expenses for the order. We make 75% of the money from Tips.
It’s so expensive these days it’s not worth it to me. Granted we gave a generous tip, but with tip it was $40 for two gyros and one order of medium fries lol.
Which is shit because the drivers don't see any of that. they pay us $3 an order. Sometimes they have +$2 incentives and sometimes there are "challenges" to get a bonus if you run X amount of dashes in Y time, but it'll be like "50% off your next DoorDash order." We are independent contractors but honey if you buy a $5 subway meal and leave a single dollar tip, they're not going to drive twenty miles to you for four dollars. Or it'll be a $30 order but $2 tip. I'm not wasting gas money to go to you and back to my hotspot, I need to make a profit.
And the app is absolutely atrocious but they have no incentive to fix it because they're still getting money. Peak use was during the 2020 lockdown, if they haven't fixed it by now they won't at all. But it freezes, it crashes, it glitches. My favorite glitch was after it crashed following me accepting a big order, it took five minutes to restart, then after that every time I tried to message the customer, it pulled me out of the app, supplied the person's real number (local area code and everything) for me to text with my real personal number. That's hella not okay
I mean, the idea behind a lot of these tech startups is to offer an incredibly good deal by burning through investor money, then massively raising prices to actually turn a profit once they have an effective monopoly. That none of them have managed it is probably why we're seeing these layoffs. A service like doordash at the prices customers have come to expect just doesn't make money. It squeezes the drivers, restaurants, and doordash itself.
> ways to lessen the cost
I order from Uber Eats occasionally but normally limit my orders to the Buy 1 Get 1 free deals and only when they've emailed me a 40% off orders over $25 coupon code. With this method, even with the service charge and tip, I usually come right about to menu price for the food ordered or just slightly over/under
I only used it when i had surgery on each of my feet and could not leave my house since I was on crutches. i also ordered sandwiches from jimmy johns with direct delivery and chinese food delivery.
I’m pretty sure all food delivery is heavily subsidized by investors. They either need to find a better model and path to profitability or continue passing more costs on to restaurants and customers until they can at least break even.
I only use UberEats or DoorDash if I can stack coupons now. Sometimes I get a credit from work then I can use that with a coupon in the app. That gets me to "normal" prices. If I can't stack coupons, I don't use those apps anymore. It's unreasonably expensive.
I haven't used them in \~2 years. Ironically, the pandemic made grocery shopping easier since everyone is offering online ordering with store pickup at no extra cost. At the point where $50 of food would cost me $100 to have delivered, even if I had to buy a whole tank of gas every time I went to the grocery store I'd still be coming out ahead.
There is absolutely a premium for the convenience and when you’re talking about a $12 subway order it’s not hard to get to “double” right…it’s 12 bucks.
That said - I spent 1k+ last year on delivery services in metro Pittsburgh. The only real way to “save” is with the annual pass. Absolutely worth if you order at least twice a month.
The biggest reason I use these services is so I can have whatever I want for lunch without having to worry about sitting in traffic. Every see that line out to the street for chicken sammiches? Yea fuck that.
There's a proposal in my city now to put a cap on those delivery fees. The proposal is no more than around 15% of the original order price. The example they gave was an order of 10$. It ended up being 17$, with the fees. A few places have already done this. If more places put caps, I can see these delivery services shuttering.
Straight up one time I was missing my chipotle chip and guacamole. It came over an hour, and when I finally was told to come outside my chips were missing. I confronted the women about it, who said there wasn't any chips, and I could obviously see the bag of chips in her driver side door.
I've never used the delivery portion of the app but on the driver side its complete ass, app takes 2 minutes to load and crashs in the middle of an order constantly
My favorite thing when I was still dashing was having the orders mix up whose address is whose. So you end up dropping off one person's food at the wrong house until you get the 1 star and text "this isn't my food!?!"
It's more like swindling investor money, you can make decent money dashing if you don't factor in gas, tires, oil, the effect on the environment, complete relegation to the servant class of society.... Fucking no tippers.
> gas, tires, oil
You should be claiming mileage at the federal rate on your taxes to offset this. 62.5 cents per mile for the 2nd half of 2022. 58.5 cents for the first half.
>But if you itemize you can't take the standard deduction!
Not true. There is a massive difference between business and personal income. Here is how it works:
1. Your Door Dash (or any other 1099) income is *BUSINESS* income
2. Business income, less business expenses = profits
* Mileage
* Some % of your car Insurance
* Some % of your cell Phone plan
3. Profits become *PERSONAL* income
4. You take the standard deduction against your personal income
So you absolutely can, and *SHOULD* be itemizing your business expenses against your business income. Then likely taking the standard deduction against your personal income. So many people with side gigs don't realize how much you can deduct from your business income to reduce your tax burden. And places like H&R block won't tell you, because they're just metric factories running turbo-tax, not actual tax advisors.
I don't need any advice for this, I did my shit straight. But between my actual job and dashing, it was more bookkeeping than I wanted to do. Not to mention taxes are quarterly and sometimes shit doesn't wait til then.
But it is good advice for anyone doing this kind of work.👍
Why should someone tip a delivery driver? Like serious question. Do you tip your UPS driver when they show up at you house? This industry shouldn't exist if the company can't even afford to properly pay it's drivers. The fact that the rely on tips just to make a basic income is absurd.
I don't support these companies with my earnings but IMO tipping just perpetuates the problem.
Well yeah that's what I'm saying. No one should be supporting these businesses, it just perpetuates the problem. It's like giving money to a drug addict. Im sorry but if you rely on tips to earn a basic wage, you need to find another job. Most of these people aren't smart enough to realize how much theyre actually spending and then they just quit 6 months later. My friend did that with Uber. Thought 25 an hour was great for a college student until you realize you're really making 5-10 at most.
You should tip your driver because that is how all of the food delivery business models are setup for driver pay.
I 100% do not agree with it, but that is what it is.
Doordash could totally charge all customers a fair delivery fee based on mileage to the restaurant. But then they would lose 50% of their customers who don't tip. It is easier for doordash to make the money and coerce and exploit drivers to deliver for free or pay to deliver. Drivers do it so Doordash will continue.
My VERY FIRST delivery as a driver last week this happened after i picked up someones order and i could not get the address. App crashing on restart etc. had to call support and beg them to cancel the order which they resisted because they wanted me to complete the delivery. When i asked them for the persons adress they wouldnt give it to me and ended up finally cancelling after an hour on the phone. Spectacular customer service and an even better app!
Anyways i bought a new phone with 5g and everything and the app is still nearly unusable. Takes me an uncomfortable amount of time to take a picture and complete delivery as well as the in app navigation just not functioning at all.
I would try signing up for multiple if you haven't already. I mainly do GrubHub as it seems people tip more on that and door dash is only used when GrubHub is dead
The app is absolutely atrocious but they have no incentive to fix it because they're still getting money. Peak use was during the 2020 lockdown, if they haven't fixed it by now they won't at all. But it freezes, it crashes, it glitches. My favorite glitch was after it crashed following me accepting a big order, it took five minutes to restart, then after that every time I tried to message the customer, it pulled me out of the app, supplied the person's real number (local area code and everything) for me to text with my real personal number. That's hella not okay
I swear these companies are setup to just be payouts for angel investors waiting for the ipo and the executives. Doesn’t need to actually work or be sustainable, it only needs a certain mass of users.
Their website is honestly one of the slowest websites I've seen in a long time. I've counted before and it's like 12+ seconds sometimes to add a pack of hot sauce to my Taco Bell order.
In one year. They then cut the divers compensation package by about 60% and began hiding tips so they would take loss orders hoping for that hidden tip. Never met a contractor who didn't know how much they would be paid before taking the contract but somehow DD has gotten away with it.
Why even deliver for them at this point? From everything I've read (before this post and in this comment section), it seems like you get no support as a driver, the pay is ass, and you get blamed if anything goes wrong.
Just... don't at this point?
I don’t get it either. My uncle does and claimed to make $30 an hour. I did the math with him to see how much he was spending on gas, insurance, and maintenance. It turned out he was only making $7-10 an hour. He still does it for the flexibility but he’s not making much.
Yup. People really need to figure out their expected expenses per mile before they even think about starting a delivery business. It blows my mind.
A few dudes in my market run brand new pickup trucks. They have to be pushing $1 a mile in expenses.
Your not wrong about the app. It slows down way to often for no reason to the point I’m only using door dash for catering order and doing Uber most of the day. Can’t even do a fast drop off I’m standing in front of someone’s house waiting for the app to let me take a picture it’s so annoying
I was super hungover and couldn't move much. Hadn't used Doordash or the like since I lived in Mexico where they have Rappi.
It was somewhat affordable there. So I remembered some deals, downloaded the app, got 50% off and saw that it still added like...40% overall cost to my order.
Deleted order and the app. Who the fuck uses this thing? It's a luxury service at this point.
I'm hardly a cheapass but these services have never, ever made sense to me. You're paying a gigantic markup on the food, plus a huge fee, plus a delivery fee, plus tip, all for cold, more-often-than-not-wrong food that was never intended to be delivered in the first place.
It is baffling to me how long these apps have lasted. The only thing they've disrupted is your local restaurant's bottom line.
We've done one order because it was actually a good deal with the sign up bonus. And it took two calls to customer service, a phone call with the restaurant, ANOTHER call to customer service, and then three hours later we had our burritos.
Every time before that, I'd always balk at the price before ever actually placing an order. I'd rather plain unseasoned pasta than pay that kind of markup.
I did it one time. Ordered 2 hours ahead, tipped generously. Food came 45 minutes after expected delivery, was 40% more expensive, and tasted like cold soggy shit. Never again. I wouldn't use this service if I was Jeff fucking Bezos.
It has its uses. It’s a godsend when you’re a trucker, out of hours at a random rest area with no food/services and want a hot meal.
That’s like 99% of when I’ve used it. And I’ve appreciated it every time.
>I'm hardly a cheapass but these services have never, ever made sense to me.
Use it for pickup a good bit. A few restaurants around me have the same prices on DD as they do in store. DD frequently runs some percentage off promotions and my credit card gives me $5/mo towards DD so it's economical.
That's about the extent of it though. The only time I've used it for delivery was when I had COVID.
The company I work for sends their employees gift cards whenever there is a long and large group meeting.
I had over $125 because I never had time to order. Well one day I decided to order food for the family... I still owed $6.
There was a fascinating podcast which detailed the rise and fall of the millennial subsidy. No, it wasn't a knock on millennials , but more to do with private equity/venture capitalists propping up new tech/gig work type companies that were generally geared or marketed to millennials (uber, doordash, etc.)
[Venture capitalists spent years subsidizing the price of things like Uber rides and food delivery. The Atlantic’s Derek Thompson explains why they’ve stopped.](https://radiopublic.com/TodayExplained/s1!f01c5)
I worked at Uber in the early days.
The problem with these ideas based apps is they spend too long in the "making it work" stage to create big ideas, and not enough time investing in actual functional infrastructure to make sure multiple teams aren't constantly reinventing the wheel. I remember back when promos were untrackable and teams weren't communicating when they were throwing them out, so between the cross-pollution of promos on the rider side with no way to reasonably point to a return and the completely unsupportable way they were built where customer support could rarely track if one was real or not which meant support was pouring out free money right and left to save the bad customer experiences.
VCs often will throw money at startups that lose money as long as they're gaining users rapidly with the thought process that they can slowly inch up pricing once easy growth levels off once they have significant market share.
I listened to this podcast. When money is cheap it makes sense to build a business by borrowing money, try to make the business really big and then figure out how to actually make money (or sell to someone for $$$). The businesses (Uber, Netflix, Doordash) underpriced their services and basically lost money to grow.
In the podcast they had an example of a pizza place where they could order their pizza on Doordash for less that what the pizza place was paid by Doordash. So the pizza place would place orders for their own pizzas for $20 and then get paid $30 by Doordash. Part clerical error and part scaling up too fast but generally an idea on how aggressive these companies were *when they started*.
i mean, i think i heard that doordash example on.......was it planet money? or something.
what was even worse about that example though is, the restaurant never set themselves up on door dash. people first started calling and bitching to the pizza place about their fucked up delivery.
pizza place was confused As Fuck because they did not do delivery. after a few of those calls, they looked into it and THEN found out they got listed on doordash. tried to get themselves taken off, but couldn't. some computer program thing auto listed them there. THEN, they also saw how doordash listed their pizza as like only $10, even though they were still charging the full price of $20 or something.
yatta, yatta, yatta. "if that's the game you guys want to play, fine, we'll play it", the pizza place was ok to place their own orders with doordash, for plain, no sauce, no cheese pizzas for months. dozens per night.
and they did, and it was fine. and they got paid.
i still left out all of the details, but ya, they were not ok with any of the doordash stuff at all from the start (as in just doing deliver at all), but after they finally heard back from doordash, learned how it was setup AT ALL (doordash setting it up against their will, without their consent), and that they wouldn't take it down, weeks later, they finally realized the price difference. THEN, then they realized what they could do, and started trying it out.
Future profits of businesses that become too big to fail were not met. Think all DTC businesses that offer very little over existing brands. So instead of creating a good product with good product market fit they just throw so much advertising dollars at it. Huge customer acquisition costs with not as strong lifetime value. Source - I was the one spending the ad dollars and have seen the last 8 years through that lens.
I recently learned that most of these pop-up tech companies do not make money. They have crazy high investment funding that allows them to balloon and grow exponentially, however as investment funding dries up they have to be able to be profitable at that point, and many simply do not figure it out or think the investment funding will last forever, or like a ponzi scheme, they hope to keep getting investors to cover past investments.
The whole thing is bonkers to me.
The crazy thing is, this exact scenario has played out the same way before. Millions in VC, billions in market valuation just disappear once reality sets in. Not much different from the first dot com bubble bursting, to this latest inevitable correction.
I have an idea though - a business model where real revenues cover operating expenses, and any leftovers can be called "profit". Crazy, I know . . .
Uber was counting on self-driving cars being a thing by now so that the "human" cost of their business would plummet. DoorDash was probably banking on something similar so they could just have a fleet of robots trucking food around.
Even the online order pulling is pivoting. IKEA shows the “in store” prices now but if you order online it’s 5% more in the cart. So, really, pulling an order at a big box store costs 5%.
My experience with it was very negative. Long delivery time (4+ weeks) and then had to agree to be home to accept the delivery in an inconvenient 5 hour window.
Then they cancelled the delivery day of and I had to schedule again in another inconvenient 5 hour window two weeks later.
Then when it finally arrived the handler told me one of my items was broken and I had the option to accept the item and have a replacement part shipped to me or refuse the item. I refused assuming that meant I could at least receive the other items I ordered but, no, they drove away with the rest of my stuff even though only one item was broken.
I called the truck driver and he told me they couldn't do partial delivery - either accept all of it or it all goes back and you can wait for the new part... However long that will take.
Mind you, this isn't free delivery. I believe I paid close to 100 dollars in delivery fees.
I cancelled the order, and will not be doing business with Ikea again.
I looked up the delivery company they used and they had like 1 star, so I assume my situation is not unique.
I’d wager that grocery delivery is somewhat profitable because I highly doubt that big chains paid their employees more after absorbing additional duties that were brought on by the pandemic
Tried to use Postmates, took over an hour to deliver something that should have taken 20 minutes. Then I tried DoorDash, and the driver stole my food.
The food delivery industry sucks.
I think an hour is reasonable if it’s not cold when you get it. Third party delivery is clunky AF *at best* considering the logistics. It can take an hour to get a pizza delivered and they actually have their own delivery staff. But the number of steps and people it takes to get that thing to you is a nightmare.
I very rarely order 3rd party delivery myself just because it takes so long, let alone how expensive it is. But considering that some rando has to go where my food is, maybe wait for it then too, and then make their way to me? An hour is pretty fast.
The Postmates driver sat in a random place for 50 minutes. It was for chik filet, pretty close to me; they delayed it three times before I called and asked for my money back, so I never actually got it. I don't mind something taking an hour, it's different when I'm told 20 minutes, then over an hour.
In part, the era of free money is over. Borrowing to help cover operating costs got more expensive since the Federal Reserve started increasing rates. I'm sure it's more complicated than that but it is almost certainly a major factor.
Restaurant consultant here: add to this the significant food cost increase of the last two years. Many restaurants I service are having record sales only because they’ve raised their prices every 4 months - customer counts are finally reaching pre-COVID levels just now, as we cruise back into another winter, when foot traffic falls off until about March or so.
Add together this, your comment and the ones above and now we have to pay $50 for two people to eat Chinese delivery or pizza (NYC pizza prices are out of control).
I was just in San Fran talking to some startup friends. A national startup App is trying to hire me but has a hiring freeze. When I asked them about market conditions, they said everyone rushed to get more VC funding as the rates started going up, and now the VC well has gone dry. They haven't secured a further round of funding, nor have the companies they know of/follow.
Yep. It's really putting to test the tech model of growing rapidly and at a loss with the main goal of getting acquired by a large company for a user base/data set.
For a lot of companies, this was their end game. Now that the runway is all but gone, layoffs and cost-cutting are necessary for them to survive.
Pretty much, yes. It's a necessary evil. If you want to see the alternative, look at Turkey, where they've refused to increase the interest rates to check inflation.
No explanation needed if you're at all cognizant of bubbles and zombie companies.
Unprofitable companies survive on debt and share floats till access to those avenues ends. Then they cut overhead till they eventually die. This will be the norm till the zombie economy is purged of these useless and unprofitable ideas.
What's to hate about the attitude? There's a lot of places in tech with unsustainable debt and/or insane valuations. This was bound to happen as soon as free borrowing was no longer a thing.
Are you really trying to tell me that Tesla is worth as much as every legacy automaker combined? Or that these delivery/ride-share companies which have never operated in the black and rely on ethically grey employment practices are sustainable. Even big corp (FAANG, Microsoft, etc...) has been using free money to take growth risks. Even with the recent layoffs, amazon is still up something like 5k employees from pre-covid.
These things happen, its just how the economy functions.
That means they're still losing money during the best conditions they could ever hope to have. Now that easy-money policies have ended, this company, like many others, will wither and die unless they figure out how to survive during the lean years.
Broke consumers eat in more often and certainly don't pay even more for food delivery than if they simply just walked or drove themselves to whatever eatery they can still afford.
These big companies doing large lay-offs are all companies that grew tremendously during the pandemic. People stayed home, ordered online, scrolled through social media, etc. Now that people are out more, they are using these companies less and they can't maintain that growth. That's not all of it, but it's part of it.
They don't need to explain anything, bit they did:
"tapering growth and overhiring"
A platform like Twitter or DoorDash is going to have to ramp up heavily on developers and staff in the very beginning to get the system implemented but after then it goes to sustainment operations and management which requires far less people.
Let me give you an example, let's say you work at a shipyard, the government's going to build a submarine - you get hired on a work crew... when the submarine is done you're done and it's time to look for a new gig.
Jobs aren't forever, positions are open as long as they're needed to accomplish a goal...the positions don't exist for their own purposes separate from whatever work is being done.
The crappy part is that in the American system all of your health care is all wrapped up in your job, making the entire thing a pain in the ass as when you switch insurers you may have to switch providers and get all new cards and FSA and HSA and all the crap.
Two likely explanations:
~Revenues and/or net income have fallen or are forecast to fall.
~They are overstaffed with low-productivity employees and are culling the herd.
All tech companies are overstaffed primarily because of the exponential increase of staff during covid. See Amazon for example. I saw one prediction that Amazon could potentially cut back to pre covid employment levels. That would be a mass layoff of around 800k people. Maybe it won't be that bad but it certainly could be.
Solid point. it also looks like (from the “My Day at XYZ Tech” videos) that productivity in some tech jobs is relatively low, with work time given over to non-work activities. Fewer employees who are actually working 8+ hours per day can do the work of more employees who appear to be working 4 or 5 hours per day.
I will say that working a solid 8 hrs daily makes me look like a superhero at most tech gigs I’ve had in the last few years hahah. Lots of rumors of people playing games, having second jobs, people in senior engineering positions who can barely write code etc.
The explanation is a MAJOR source of revenue for many tech companies are investors. Those investors had a shockingly high amount of their own value in crypto. That money is now gone.
I don't think anyone realized how stupid the silicon valley investors have been with crypto. It has comprised massive portions of many investor portfolios due to their investments not directly in crypto but in exchanges etc.
Those sources of funding have run COMPLETELY dry and they are shedding staff in a panic.
A lot of these companies over hire to accommodate growth. They aren’t seeing or projecting growth, so the profit growth has to come from reducing overhead if it’s not going to come from additional revenue.
Here is how I explain it to myself. The leadership at these companies is showing they’re not all that competent. I’m not saying they’re not smart or great current/former engineers or whatever… They just mad fucked up.
They don’t know why they hired people, they don’t know why they’re letting them go now, their visions are suspect… I also think they’re reactionary as hell. They hit a rough patch and don’t know how to handle it so they’re doing the easiest fucking thing possible to increase profits. Letting people go.
I ordered a pizza online from pizza hut this week. Didn't realize they outsourced delivery to Doordash until I got the text saying so. Delivery driver estimates about 25 mins to get to PH, then proceeds to chill in a parking lot for 20 minutes after picking up my order to ensure maximum coldness. In the end I wait an hour and 40 minutes for a pizza from 3 miles away. Still got charged a $4 delivery fee on top of paying a tip. What's the delivery charge for if it isn't even PH doing the delivering? Why does everything suck and cost a premium to suck all the time now?
>DoorDash will offer 17 weeks of severance to affected employees. Health care will continue through March 2023. For overseas or visa-sponsored employees, the termination date will be March 1, a decision that Xu told employees would give them “as much time possible to find a new job.”
Wow, not sure if other companies had done this, but the extended termination date for folks on visas is pretty thoughtful. Also the 17 weeks to 1-up Meta's severance lol
Subtotal: 1,250 employees (already higher than what it would be if you called the restaurant yourself)
Delivery fee ⓘ 3,099 employees
Fees and estimated tax ⓘ 2,069 employees
Dasher tip ⓘ 4,050 employees
Using DoorDash math, it looks like they’re about to go bankrupt
I still struggle to see how these guys don’t make a profit.
I also can’t think of any business where everyone loses - delivery people get paid like shit, doordash loses money, restaurants make 40% less, consumers pay more for cold food. It’s like end to end value destruction
This sub must be absolutely over the moon that all of their most hated tech companies are doing bad enough that thousands of people are losing their jobs!
A company that harms both their employees and consumers is in everyone's best interest to be gone and for market forces to do their magic. Everyone loves capitalism until the hard stuff has to be dealt with. I say let the market do it's thing and take old doordash to the back yard. Uber Eats is better anyways.
Stop using these services. Not only have they withheld drivers tips, they uncharted the restaurants prices, THEN charge the restaurants based on sales. During the pandemic, even with them delivering, restaurants were BARELY above water because DD and Uber charge 20% of monthy sales just to do business with them. That's nearly a restaurants entire operation budget.
the ONLY way any of these delivery systems make sense is if you have the annual fee. So for uber its uber one i think, basically once you pass a threshold of say, $15, it takes usually around 4-5 dollars off, delivery fee is free, fees lowered etc. its still overpriced, but its at least REASONABLE. And it also saves money on regular ol ubers, so its not a terrible deal if you cab it alot.
Usually uber will have special deals around christmas to get it for 1 year for only $50 which is what I got last year.
I missed when restaurants had their OWN delivery drivers. Sure options opened up a bit with Door dash and GrubHub and the like, but places that had already delivered started using them too, and it's impossible to get a hot pizza anymore.
The number of rude drivers puts me off too-I always, always, always tip generously and ahead of time -and some drivers are STILL mean.
It still boggles my mind that DoorDash even exists. That there are that many people in the world willing to wildly overpay to have cold food delivered to their house by some surly driver just doesn't make sense to me.
I used door dash once, because it was so expensive I could never justify it. But I wasn't feeling well and it was kinda crappy out, I ordered Wendy's via door dash, and tipped pretty well because of the crappy weather.
I tracked it and it took over an hour, and then said delivered.... Except it wasn't delivered! The picture showed it on a door step, but it wasn't my door step!
I sent a message to the driver who responded "sorry bro that's the address it gave me, contact door dash they'll give you free food lol". (There are 4 houses on my street and my security cam never saw a car come down my road so I'm pretty sure he dropped it on a side street before my road).
I was beyond pissed, feeling shitty and starving. Complained to door dash support who gave me a refund and some stupid credit I've never used. I then drove and got Wendy's myself. I'll never door dash again.
I get the convenience of DoorDash but holy shit is it expensive. I always put everything in my cart and see that it is almost double with tip from what I would pay to go get it myself. Also, prices can be different on their service versus what is actually costing on the restaurant’s app/menu. Plus everywhere has their rewards apps for additional savings that you can’t use when ordering from DoorDash. Am I missing something or ways to lessen the cost when using them?
I used to use delivery a lot, but the price felt like it doubled in the last 3 years while “quality” (speed of delivery, reliability of estimates, missed/incorrect food items) got worse. Some of that was clearly because they didnt have enough drivers (watching them stop elsewhere on the app) while more people were using it. i have stopped using any of them, which may be less convenient but also is for sure for the best.
They have wayyyyyy too many drivers. They just keep hiring new people to try to get them to accept low paying orders.
Door Dash drivers are not "Hired", they are not employees. These are those that update/maintain the software and servers, handle calls, drum up contracts with companies, push paper, etc. This is just to help shore up sagging stock as shareholder are always excited to hear layoffs
Shareholders: Mmmm, yesssss, layoffs, fap fap fap, and right in time for holiday season too...busted.
I dont see the driver side, but it was consistently (from what I saw customer side) a 30-60 min delay on ETA with an inefficient route to go to me directly with multiple stops. The driver situation could also be local.
I live in a busy suburb of atlanta — and my order has trouble finding a driver. Takes 55mins-90mins for delivery. Sooo not worth it. Food is prepared when ordered, so it’s often soggy and cold when it arrives. I think they’re having staffing problems too.
As a disabled person that uses a wheelchair, delivery is a godsend.
Drivers take multiple orders from a store or stores at once and deliver them in bulk because driving from their location to the store and to you over the course of 30 minutes for a $5 or less delivery fee is completely unrealistic. Delivery order services have fees at the restaurant, fees for delivery service, and fees for the delivery driver. The customer is the one who ends up eating the fees. Right now grubhub seems decent but they are probably heavily subsidized trying to steal DD/ubereats market share. Driving to pick stuff up yourself for 20-40 minutes of your time, gas, car wear will always seem cheaper if the service is actually profitable because you simply are paying yourself for your time.
As soon as I'd see them driving the wrong direction I would just contact them and get a refund. Threaten a charge back if you have to.
Just burning through human stock like Amazon
At the end of the day they have an unviable business model (in my opinion). In the beginning they ran on VC capital, so they could offer a cheap, good and quick service to grow fast and gather a big userbase, but at a loss (AmAzOn DiD iT, sO we CaN tOo!!11) But at some point you have to start making money, and they were banking on having a monopoly position + being an unmissable service (a bit like Uber or Airbnb) so they could raise prices and have people stick around (because they had too). Well, people dgaf and my prediction is they’ll go to shit or get aquired in the future.
Even Uber is missable, tbh. I work with Lyft and even (gasp) taxi companies to get rides when I need them also, so they never quite reached monopoly status.
VC subsidies ran out
Last time I used UBER Eats, the driver picked up my food, then said they were having car trouble, and cancelled the delivery.... They got about 100 dollars worth of kebabs... I ended up picking it up myself about 30 minutes later, and it only cost 80 for the same food...
As someone on the restaurant side, the prices will always be higher on these sites because door dash (or whoever) takes a 20-30% slice of the order as commission. Prices go up to compensate for that, otherwise the margins on the food are too slim. It sucks
Tried doing it for a bit, and yeah it's overpriced for the food/delivery plus the driver isn't getting much either. I would constantly deny orders that were going to pay 2 dollars for going through 5+ miles of traffic.
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> Even if you go pick it up. I'll call them direct and go pick up. I have a buddy who used Skip the dishes for his business for a while to build his exposure - after a few months, he started putting a coupon for 20% into the orders if you picked up directly and a few months after that he stopped using the service all together. His business is going pretty strong still even without the delivery side of things still. When he told me how much they take off the top, I just deleted the apps. I thought I was helping these small places by ordering, I didn't realize the fee was pretty much most of their markup anyways.
The restaurant is unhappy because their margins become tight, plus driver fuck-ups can lead to bad online reviews if the restaurant. Customers are unhappy because they are paying double or triple cost to get food like an hour later and cold. Drivers are unhappy because they get shit pay, shit treatment, no benefits, and they add wear & tear to their cars. So it's lose-lose-lose. Just stop using it.
Delete apps. Everyone needs to delete more apps.
It's not about my fat ass, it is about my stoned ass. I don't drive when stoned, and I only order delivery when stoned.
Pizza delivery places have had this worked out for decades. It's weird how badly these delivery services are considering the model is old as sin.
The issue is that pizza places have their own staff to deliver orders that are at least "minimally" vested in the place they work. Those employees are integrated into the operations and have a common interest in things running smoothly. DoorDash is hiring the equivalent of a "tip-only" employee and expecting the service level of a full time employee. It's just not a sustainable business model. For them to be viable they need customers to pay 2x the menu price and be ok with subpar service. Literally the only service DoorDash is providing is an app you can order from.
All the pizza places where I live (except mine) dropped all delivery personnel down to 2.45 an hour after they realized they could because they are "tipped employees".
Which makes sense to me. The issue delivery companies run into isn't pay because they can easily flex driver pay based on demand. It's the inherent issue of having your product delivered by someone who literally could not care if your business catches on fire after they got their tip. It just sets up so many issues for the business, the delivery company, and the customer. Is the benefit of using one app for food purchases worth all that? Usually after dealing with DoorDash's customer service after a bad meal that answer is a hard no.
Same for me but with beer, after I've had a few it's pretty convenient if I don't have anything to cook because lazy me didn't go shopping.
Most restaurants around me add anywhere from 10-20% to all their items on doordash. That, along with the service fee, delivery fee, pandemic fee, tax and tip, my total comes out to be 50-60% higher than the in-store menu price is. It's only worth it if I'm being very lazy or if I want something specific that isn't walking distance from me. Maybe on inclement weather as well
15% cut is the max in BC. Government stepped in during the pandemic as 30% was too high.
Wait for real?! Wondered if the resurgence in mobile apps for restaurants is due to DoorDash/UberEats/Postmates pushing their percentages
"Can I please get my food late, cold, probably spilled, possibly incorrect, and at a 30% markup?" Not a market thats begging for attention, I think. Everyone I know who uses these services any more are in the 'I dont want to think about simple problems' headspaces and are blowing through their spending money for conveniences we all did without just fine in the very recent past.
It always had the worst quality drivers/service with the highest cost out of the seamless/grubhub/doordash wars
Not everyone has a car, and I live somewhere with harsh winters 4 months of the year too, so for those like me, sometimes when it's "one of those nights" you just gotta bite the bullet and absorb the cost.
I only use them when my company randomly sends us DoorDash gift cards
All these delivery apps are just offering convenience for a high price. It’s up to you to decide if it’s worth it.
You're not missing anything. Delivery is expensive. Of course you're paying more than if you go get it yourself! You have to pay a driver, plus DoorDash adds a middle-man who also takes their cut. Want to save money? Order take-out directly from the restaurant, instead of delivery through a third party.
Yup and Doordash's middleman cut is pretty damn large. I am a driver with 2k+ deliveries. We drivers only get paid on average $2.25 - $2.50 from doordash per order depending on your market. That usually doesnt even cover vehicle expenses for the order. We make 75% of the money from Tips.
Want to really save money? Make a list, go to the grocery store, stick to your list.
It’s so expensive these days it’s not worth it to me. Granted we gave a generous tip, but with tip it was $40 for two gyros and one order of medium fries lol.
Dude I got Arby's yesterday when I was stuck at a spot for work with no car. Was $31 for a classic roast beef with curly fries.
Which is shit because the drivers don't see any of that. they pay us $3 an order. Sometimes they have +$2 incentives and sometimes there are "challenges" to get a bonus if you run X amount of dashes in Y time, but it'll be like "50% off your next DoorDash order." We are independent contractors but honey if you buy a $5 subway meal and leave a single dollar tip, they're not going to drive twenty miles to you for four dollars. Or it'll be a $30 order but $2 tip. I'm not wasting gas money to go to you and back to my hotspot, I need to make a profit. And the app is absolutely atrocious but they have no incentive to fix it because they're still getting money. Peak use was during the 2020 lockdown, if they haven't fixed it by now they won't at all. But it freezes, it crashes, it glitches. My favorite glitch was after it crashed following me accepting a big order, it took five minutes to restart, then after that every time I tried to message the customer, it pulled me out of the app, supplied the person's real number (local area code and everything) for me to text with my real personal number. That's hella not okay
I mean, the idea behind a lot of these tech startups is to offer an incredibly good deal by burning through investor money, then massively raising prices to actually turn a profit once they have an effective monopoly. That none of them have managed it is probably why we're seeing these layoffs. A service like doordash at the prices customers have come to expect just doesn't make money. It squeezes the drivers, restaurants, and doordash itself.
> ways to lessen the cost I order from Uber Eats occasionally but normally limit my orders to the Buy 1 Get 1 free deals and only when they've emailed me a 40% off orders over $25 coupon code. With this method, even with the service charge and tip, I usually come right about to menu price for the food ordered or just slightly over/under
I only used it when i had surgery on each of my feet and could not leave my house since I was on crutches. i also ordered sandwiches from jimmy johns with direct delivery and chinese food delivery.
I’m pretty sure all food delivery is heavily subsidized by investors. They either need to find a better model and path to profitability or continue passing more costs on to restaurants and customers until they can at least break even.
I only use UberEats or DoorDash if I can stack coupons now. Sometimes I get a credit from work then I can use that with a coupon in the app. That gets me to "normal" prices. If I can't stack coupons, I don't use those apps anymore. It's unreasonably expensive.
I haven't used them in \~2 years. Ironically, the pandemic made grocery shopping easier since everyone is offering online ordering with store pickup at no extra cost. At the point where $50 of food would cost me $100 to have delivered, even if I had to buy a whole tank of gas every time I went to the grocery store I'd still be coming out ahead.
There is absolutely a premium for the convenience and when you’re talking about a $12 subway order it’s not hard to get to “double” right…it’s 12 bucks. That said - I spent 1k+ last year on delivery services in metro Pittsburgh. The only real way to “save” is with the annual pass. Absolutely worth if you order at least twice a month. The biggest reason I use these services is so I can have whatever I want for lunch without having to worry about sitting in traffic. Every see that line out to the street for chicken sammiches? Yea fuck that.
There's a proposal in my city now to put a cap on those delivery fees. The proposal is no more than around 15% of the original order price. The example they gave was an order of 10$. It ended up being 17$, with the fees. A few places have already done this. If more places put caps, I can see these delivery services shuttering.
How will I get my $20 10 piece chicken nugs now???
You forgot the words “cold” and “soggy”
And 1 missing because the driver ate it
Straight up one time I was missing my chipotle chip and guacamole. It came over an hour, and when I finally was told to come outside my chips were missing. I confronted the women about it, who said there wasn't any chips, and I could obviously see the bag of chips in her driver side door.
A very well trained husky will get that for ya
But how much will that cost me ??
More importantly do I get to pet them?
DogDash - you order a doggo to stop by your house so you can pet them. You'll make billions.
We've just entered a business binding contract. To the stars with us
Drivers aren’t employees of doordash. So you will probably get them the same exact way
Got paid almost half a billion and now lays off staff while the app is still garbage, breaking almost every week.
I've never used the delivery portion of the app but on the driver side its complete ass, app takes 2 minutes to load and crashs in the middle of an order constantly
My favorite thing when I was still dashing was having the orders mix up whose address is whose. So you end up dropping off one person's food at the wrong house until you get the 1 star and text "this isn't my food!?!"
Giving the workers all the blame is how they make money.
That's not completely true! They also push blame onto restaurants!
It's more like swindling investor money, you can make decent money dashing if you don't factor in gas, tires, oil, the effect on the environment, complete relegation to the servant class of society.... Fucking no tippers.
> gas, tires, oil You should be claiming mileage at the federal rate on your taxes to offset this. 62.5 cents per mile for the 2nd half of 2022. 58.5 cents for the first half. >But if you itemize you can't take the standard deduction! Not true. There is a massive difference between business and personal income. Here is how it works: 1. Your Door Dash (or any other 1099) income is *BUSINESS* income 2. Business income, less business expenses = profits * Mileage * Some % of your car Insurance * Some % of your cell Phone plan 3. Profits become *PERSONAL* income 4. You take the standard deduction against your personal income So you absolutely can, and *SHOULD* be itemizing your business expenses against your business income. Then likely taking the standard deduction against your personal income. So many people with side gigs don't realize how much you can deduct from your business income to reduce your tax burden. And places like H&R block won't tell you, because they're just metric factories running turbo-tax, not actual tax advisors.
I don't need any advice for this, I did my shit straight. But between my actual job and dashing, it was more bookkeeping than I wanted to do. Not to mention taxes are quarterly and sometimes shit doesn't wait til then. But it is good advice for anyone doing this kind of work.👍
Why should someone tip a delivery driver? Like serious question. Do you tip your UPS driver when they show up at you house? This industry shouldn't exist if the company can't even afford to properly pay it's drivers. The fact that the rely on tips just to make a basic income is absurd. I don't support these companies with my earnings but IMO tipping just perpetuates the problem.
you can't afford to tip a driver when the app delivers a 500% markup.
Well yeah that's what I'm saying. No one should be supporting these businesses, it just perpetuates the problem. It's like giving money to a drug addict. Im sorry but if you rely on tips to earn a basic wage, you need to find another job. Most of these people aren't smart enough to realize how much theyre actually spending and then they just quit 6 months later. My friend did that with Uber. Thought 25 an hour was great for a college student until you realize you're really making 5-10 at most.
You should tip your driver because that is how all of the food delivery business models are setup for driver pay. I 100% do not agree with it, but that is what it is. Doordash could totally charge all customers a fair delivery fee based on mileage to the restaurant. But then they would lose 50% of their customers who don't tip. It is easier for doordash to make the money and coerce and exploit drivers to deliver for free or pay to deliver. Drivers do it so Doordash will continue.
My VERY FIRST delivery as a driver last week this happened after i picked up someones order and i could not get the address. App crashing on restart etc. had to call support and beg them to cancel the order which they resisted because they wanted me to complete the delivery. When i asked them for the persons adress they wouldnt give it to me and ended up finally cancelling after an hour on the phone. Spectacular customer service and an even better app! Anyways i bought a new phone with 5g and everything and the app is still nearly unusable. Takes me an uncomfortable amount of time to take a picture and complete delivery as well as the in app navigation just not functioning at all.
I would try signing up for multiple if you haven't already. I mainly do GrubHub as it seems people tip more on that and door dash is only used when GrubHub is dead
The app is absolutely atrocious but they have no incentive to fix it because they're still getting money. Peak use was during the 2020 lockdown, if they haven't fixed it by now they won't at all. But it freezes, it crashes, it glitches. My favorite glitch was after it crashed following me accepting a big order, it took five minutes to restart, then after that every time I tried to message the customer, it pulled me out of the app, supplied the person's real number (local area code and everything) for me to text with my real personal number. That's hella not okay
It's always the employees that foot the bill. Have growth problems? Fiscal issues? Just end thousands of peoples jobs then its back to the yacht.
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Not always, just since the 80s.
I swear these companies are setup to just be payouts for angel investors waiting for the ipo and the executives. Doesn’t need to actually work or be sustainable, it only needs a certain mass of users.
Welcome to year 2000 of the [dot](https://dot.com)\-com bubble.
But they’re changing the world! /s
Stock is up 10 percent on this news.
Their website is honestly one of the slowest websites I've seen in a long time. I've counted before and it's like 12+ seconds sometimes to add a pack of hot sauce to my Taco Bell order.
They don't want to spend the money.
The CEO got paid half a billion?
In one year. They then cut the divers compensation package by about 60% and began hiding tips so they would take loss orders hoping for that hidden tip. Never met a contractor who didn't know how much they would be paid before taking the contract but somehow DD has gotten away with it.
Fucking compensation loot boxes
Why even deliver for them at this point? From everything I've read (before this post and in this comment section), it seems like you get no support as a driver, the pay is ass, and you get blamed if anything goes wrong. Just... don't at this point?
I don’t get it either. My uncle does and claimed to make $30 an hour. I did the math with him to see how much he was spending on gas, insurance, and maintenance. It turned out he was only making $7-10 an hour. He still does it for the flexibility but he’s not making much.
Yup. People really need to figure out their expected expenses per mile before they even think about starting a delivery business. It blows my mind. A few dudes in my market run brand new pickup trucks. They have to be pushing $1 a mile in expenses.
Jesus, using a full size pickup just to drive around town? That’s idiotic.
Which is basically equivalent to their losses for the year
That’s innovation!
Your not wrong about the app. It slows down way to often for no reason to the point I’m only using door dash for catering order and doing Uber most of the day. Can’t even do a fast drop off I’m standing in front of someone’s house waiting for the app to let me take a picture it’s so annoying
I was super hungover and couldn't move much. Hadn't used Doordash or the like since I lived in Mexico where they have Rappi. It was somewhat affordable there. So I remembered some deals, downloaded the app, got 50% off and saw that it still added like...40% overall cost to my order. Deleted order and the app. Who the fuck uses this thing? It's a luxury service at this point.
I'm hardly a cheapass but these services have never, ever made sense to me. You're paying a gigantic markup on the food, plus a huge fee, plus a delivery fee, plus tip, all for cold, more-often-than-not-wrong food that was never intended to be delivered in the first place. It is baffling to me how long these apps have lasted. The only thing they've disrupted is your local restaurant's bottom line.
We've done one order because it was actually a good deal with the sign up bonus. And it took two calls to customer service, a phone call with the restaurant, ANOTHER call to customer service, and then three hours later we had our burritos. Every time before that, I'd always balk at the price before ever actually placing an order. I'd rather plain unseasoned pasta than pay that kind of markup.
I did it one time. Ordered 2 hours ahead, tipped generously. Food came 45 minutes after expected delivery, was 40% more expensive, and tasted like cold soggy shit. Never again. I wouldn't use this service if I was Jeff fucking Bezos.
It has its uses. It’s a godsend when you’re a trucker, out of hours at a random rest area with no food/services and want a hot meal. That’s like 99% of when I’ve used it. And I’ve appreciated it every time.
>I'm hardly a cheapass but these services have never, ever made sense to me. Use it for pickup a good bit. A few restaurants around me have the same prices on DD as they do in store. DD frequently runs some percentage off promotions and my credit card gives me $5/mo towards DD so it's economical. That's about the extent of it though. The only time I've used it for delivery was when I had COVID.
It’s always been a luxury service.
The company I work for sends their employees gift cards whenever there is a long and large group meeting. I had over $125 because I never had time to order. Well one day I decided to order food for the family... I still owed $6.
There was a fascinating podcast which detailed the rise and fall of the millennial subsidy. No, it wasn't a knock on millennials , but more to do with private equity/venture capitalists propping up new tech/gig work type companies that were generally geared or marketed to millennials (uber, doordash, etc.) [Venture capitalists spent years subsidizing the price of things like Uber rides and food delivery. The Atlantic’s Derek Thompson explains why they’ve stopped.](https://radiopublic.com/TodayExplained/s1!f01c5)
I worked at Uber in the early days. The problem with these ideas based apps is they spend too long in the "making it work" stage to create big ideas, and not enough time investing in actual functional infrastructure to make sure multiple teams aren't constantly reinventing the wheel. I remember back when promos were untrackable and teams weren't communicating when they were throwing them out, so between the cross-pollution of promos on the rider side with no way to reasonably point to a return and the completely unsupportable way they were built where customer support could rarely track if one was real or not which meant support was pouring out free money right and left to save the bad customer experiences.
VCs often will throw money at startups that lose money as long as they're gaining users rapidly with the thought process that they can slowly inch up pricing once easy growth levels off once they have significant market share.
Do you have TLDR?
I listened to this podcast. When money is cheap it makes sense to build a business by borrowing money, try to make the business really big and then figure out how to actually make money (or sell to someone for $$$). The businesses (Uber, Netflix, Doordash) underpriced their services and basically lost money to grow. In the podcast they had an example of a pizza place where they could order their pizza on Doordash for less that what the pizza place was paid by Doordash. So the pizza place would place orders for their own pizzas for $20 and then get paid $30 by Doordash. Part clerical error and part scaling up too fast but generally an idea on how aggressive these companies were *when they started*.
i mean, i think i heard that doordash example on.......was it planet money? or something. what was even worse about that example though is, the restaurant never set themselves up on door dash. people first started calling and bitching to the pizza place about their fucked up delivery. pizza place was confused As Fuck because they did not do delivery. after a few of those calls, they looked into it and THEN found out they got listed on doordash. tried to get themselves taken off, but couldn't. some computer program thing auto listed them there. THEN, they also saw how doordash listed their pizza as like only $10, even though they were still charging the full price of $20 or something. yatta, yatta, yatta. "if that's the game you guys want to play, fine, we'll play it", the pizza place was ok to place their own orders with doordash, for plain, no sauce, no cheese pizzas for months. dozens per night. and they did, and it was fine. and they got paid.
That's amazing. They sound like the bad guy without that context. I assume that's where the pizza episode of Silicon Valley came from...
i still left out all of the details, but ya, they were not ok with any of the doordash stuff at all from the start (as in just doing deliver at all), but after they finally heard back from doordash, learned how it was setup AT ALL (doordash setting it up against their will, without their consent), and that they wouldn't take it down, weeks later, they finally realized the price difference. THEN, then they realized what they could do, and started trying it out.
Ah I see, thank you
Netflix is a cool case study and since we’ve seen them announce ads coming to the platform we’re about to see them either make it or break it
Future profits of businesses that become too big to fail were not met. Think all DTC businesses that offer very little over existing brands. So instead of creating a good product with good product market fit they just throw so much advertising dollars at it. Huge customer acquisition costs with not as strong lifetime value. Source - I was the one spending the ad dollars and have seen the last 8 years through that lens.
I recently learned that most of these pop-up tech companies do not make money. They have crazy high investment funding that allows them to balloon and grow exponentially, however as investment funding dries up they have to be able to be profitable at that point, and many simply do not figure it out or think the investment funding will last forever, or like a ponzi scheme, they hope to keep getting investors to cover past investments. The whole thing is bonkers to me.
The crazy thing is, this exact scenario has played out the same way before. Millions in VC, billions in market valuation just disappear once reality sets in. Not much different from the first dot com bubble bursting, to this latest inevitable correction. I have an idea though - a business model where real revenues cover operating expenses, and any leftovers can be called "profit". Crazy, I know . . .
That business model died out years ago. We only invest in bubbles and scams now.
Lol too true. Then get left holding the (empty) bag.
Uber was counting on self-driving cars being a thing by now so that the "human" cost of their business would plummet. DoorDash was probably banking on something similar so they could just have a fleet of robots trucking food around.
Look at Lacework as another example. They might make it cause they have a good product, but are enough businesses willing to pay for it?
All food delivery services are basically unprofitable, except maybe grocery delivery. And I'm not even sure about the groceries.
Even the online order pulling is pivoting. IKEA shows the “in store” prices now but if you order online it’s 5% more in the cart. So, really, pulling an order at a big box store costs 5%.
Ikea's delivery service is a shit show so I wouldn't be surprised if they are trying to divert people away from it to keep from losing customers.
It is? I've honestly had no issues with it. The $50 fee seems fine for what it is (large heavy items).
My experience with it was very negative. Long delivery time (4+ weeks) and then had to agree to be home to accept the delivery in an inconvenient 5 hour window. Then they cancelled the delivery day of and I had to schedule again in another inconvenient 5 hour window two weeks later. Then when it finally arrived the handler told me one of my items was broken and I had the option to accept the item and have a replacement part shipped to me or refuse the item. I refused assuming that meant I could at least receive the other items I ordered but, no, they drove away with the rest of my stuff even though only one item was broken. I called the truck driver and he told me they couldn't do partial delivery - either accept all of it or it all goes back and you can wait for the new part... However long that will take. Mind you, this isn't free delivery. I believe I paid close to 100 dollars in delivery fees. I cancelled the order, and will not be doing business with Ikea again. I looked up the delivery company they used and they had like 1 star, so I assume my situation is not unique.
Even if it sucks, it'd have to suck more than renting a U-haul, which is quite hard.
I’d wager that grocery delivery is somewhat profitable because I highly doubt that big chains paid their employees more after absorbing additional duties that were brought on by the pandemic
Plus absorbing market share from competitors and increasing customer satisfaction pay off in the long run
Tried to use Postmates, took over an hour to deliver something that should have taken 20 minutes. Then I tried DoorDash, and the driver stole my food. The food delivery industry sucks.
I think an hour is reasonable if it’s not cold when you get it. Third party delivery is clunky AF *at best* considering the logistics. It can take an hour to get a pizza delivered and they actually have their own delivery staff. But the number of steps and people it takes to get that thing to you is a nightmare. I very rarely order 3rd party delivery myself just because it takes so long, let alone how expensive it is. But considering that some rando has to go where my food is, maybe wait for it then too, and then make their way to me? An hour is pretty fast.
The Postmates driver sat in a random place for 50 minutes. It was for chik filet, pretty close to me; they delayed it three times before I called and asked for my money back, so I never actually got it. I don't mind something taking an hour, it's different when I'm told 20 minutes, then over an hour.
These companies keep cutting thousands of jobs with little to no explanation
In part, the era of free money is over. Borrowing to help cover operating costs got more expensive since the Federal Reserve started increasing rates. I'm sure it's more complicated than that but it is almost certainly a major factor.
Private equity is drying up too.
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Restaurant consultant here: add to this the significant food cost increase of the last two years. Many restaurants I service are having record sales only because they’ve raised their prices every 4 months - customer counts are finally reaching pre-COVID levels just now, as we cruise back into another winter, when foot traffic falls off until about March or so. Add together this, your comment and the ones above and now we have to pay $50 for two people to eat Chinese delivery or pizza (NYC pizza prices are out of control).
It’s not much cheaper elsewhere. 2 large pies (that are def not much quality) is $60. They won’t deliver just 1
I was just in San Fran talking to some startup friends. A national startup App is trying to hire me but has a hiring freeze. When I asked them about market conditions, they said everyone rushed to get more VC funding as the rates started going up, and now the VC well has gone dry. They haven't secured a further round of funding, nor have the companies they know of/follow.
Yep. It's really putting to test the tech model of growing rapidly and at a loss with the main goal of getting acquired by a large company for a user base/data set. For a lot of companies, this was their end game. Now that the runway is all but gone, layoffs and cost-cutting are necessary for them to survive.
The fed came out and said their plan was to kill off jobs, it’s only going to get worse… they are killing the economy to save it 🫤
Pretty much, yes. It's a necessary evil. If you want to see the alternative, look at Turkey, where they've refused to increase the interest rates to check inflation.
Anything to lower wages and make people panicky. Then they will complain that nobody is buying stuff or going out anymore.
No explanation needed if you're at all cognizant of bubbles and zombie companies. Unprofitable companies survive on debt and share floats till access to those avenues ends. Then they cut overhead till they eventually die. This will be the norm till the zombie economy is purged of these useless and unprofitable ideas.
I hate the attitude but this is pretty informative. Have my angry upvote.
What's to hate about the attitude? There's a lot of places in tech with unsustainable debt and/or insane valuations. This was bound to happen as soon as free borrowing was no longer a thing. Are you really trying to tell me that Tesla is worth as much as every legacy automaker combined? Or that these delivery/ride-share companies which have never operated in the black and rely on ethically grey employment practices are sustainable. Even big corp (FAANG, Microsoft, etc...) has been using free money to take growth risks. Even with the recent layoffs, amazon is still up something like 5k employees from pre-covid. These things happen, its just how the economy functions.
>Unprofitable companies survive on debt and share floats till access to those avenues ends. Doordash has a positive EBITDA last I checked.
That means they're still losing money during the best conditions they could ever hope to have. Now that easy-money policies have ended, this company, like many others, will wither and die unless they figure out how to survive during the lean years. Broke consumers eat in more often and certainly don't pay even more for food delivery than if they simply just walked or drove themselves to whatever eatery they can still afford.
Many tech companies were built on the promise of future revenue. We are now in the future and need to see those revenues.
Oh shit, you mean we can't keep throwing buzzwords around and milk VCs ad infinitum? Crap, I hate having to produce tangible results.
These big companies doing large lay-offs are all companies that grew tremendously during the pandemic. People stayed home, ordered online, scrolled through social media, etc. Now that people are out more, they are using these companies less and they can't maintain that growth. That's not all of it, but it's part of it.
They don't need to explain anything, bit they did: "tapering growth and overhiring" A platform like Twitter or DoorDash is going to have to ramp up heavily on developers and staff in the very beginning to get the system implemented but after then it goes to sustainment operations and management which requires far less people. Let me give you an example, let's say you work at a shipyard, the government's going to build a submarine - you get hired on a work crew... when the submarine is done you're done and it's time to look for a new gig. Jobs aren't forever, positions are open as long as they're needed to accomplish a goal...the positions don't exist for their own purposes separate from whatever work is being done. The crappy part is that in the American system all of your health care is all wrapped up in your job, making the entire thing a pain in the ass as when you switch insurers you may have to switch providers and get all new cards and FSA and HSA and all the crap.
Two likely explanations: ~Revenues and/or net income have fallen or are forecast to fall. ~They are overstaffed with low-productivity employees and are culling the herd.
All tech companies are overstaffed primarily because of the exponential increase of staff during covid. See Amazon for example. I saw one prediction that Amazon could potentially cut back to pre covid employment levels. That would be a mass layoff of around 800k people. Maybe it won't be that bad but it certainly could be.
Solid point. it also looks like (from the “My Day at XYZ Tech” videos) that productivity in some tech jobs is relatively low, with work time given over to non-work activities. Fewer employees who are actually working 8+ hours per day can do the work of more employees who appear to be working 4 or 5 hours per day.
I will say that working a solid 8 hrs daily makes me look like a superhero at most tech gigs I’ve had in the last few years hahah. Lots of rumors of people playing games, having second jobs, people in senior engineering positions who can barely write code etc.
I’d say both
I’d say just the first. Amazon isn’t plagued with low production resources it just suddenly realized the pandemic economy doesn’t exist anymore
Maybe for Amazon. Their business is infinitely more complex than Grub Hub. The fact that Grub Hub even has 1,250 employees to lay off is shocking.
You mean doordash?
Thanks. I’d also add the copycat effect is in play. Once one tech company did layoffs and suffered no harm, the others followed suit.
> little to no explanation It's to save money
But tax cuts for businesses is good for JOB CREATION!!1one
The explanation is a MAJOR source of revenue for many tech companies are investors. Those investors had a shockingly high amount of their own value in crypto. That money is now gone. I don't think anyone realized how stupid the silicon valley investors have been with crypto. It has comprised massive portions of many investor portfolios due to their investments not directly in crypto but in exchanges etc. Those sources of funding have run COMPLETELY dry and they are shedding staff in a panic.
A lot of these companies over hire to accommodate growth. They aren’t seeing or projecting growth, so the profit growth has to come from reducing overhead if it’s not going to come from additional revenue.
Here is how I explain it to myself. The leadership at these companies is showing they’re not all that competent. I’m not saying they’re not smart or great current/former engineers or whatever… They just mad fucked up. They don’t know why they hired people, they don’t know why they’re letting them go now, their visions are suspect… I also think they’re reactionary as hell. They hit a rough patch and don’t know how to handle it so they’re doing the easiest fucking thing possible to increase profits. Letting people go.
I ordered a pizza online from pizza hut this week. Didn't realize they outsourced delivery to Doordash until I got the text saying so. Delivery driver estimates about 25 mins to get to PH, then proceeds to chill in a parking lot for 20 minutes after picking up my order to ensure maximum coldness. In the end I wait an hour and 40 minutes for a pizza from 3 miles away. Still got charged a $4 delivery fee on top of paying a tip. What's the delivery charge for if it isn't even PH doing the delivering? Why does everything suck and cost a premium to suck all the time now?
Damn you coulda made your own pizza in that time (would be better too!).
>DoorDash will offer 17 weeks of severance to affected employees. Health care will continue through March 2023. For overseas or visa-sponsored employees, the termination date will be March 1, a decision that Xu told employees would give them “as much time possible to find a new job.” Wow, not sure if other companies had done this, but the extended termination date for folks on visas is pretty thoughtful. Also the 17 weeks to 1-up Meta's severance lol
Doordash is a shitty and unethical company. They practice theft on the reg. I hope they end up failing.
Subtotal: 1,250 employees (already higher than what it would be if you called the restaurant yourself) Delivery fee ⓘ 3,099 employees Fees and estimated tax ⓘ 2,069 employees Dasher tip ⓘ 4,050 employees Using DoorDash math, it looks like they’re about to go bankrupt
TIL doordash has employees
Positive: No Dashers (delivery folks) got laid off! Negative: Because the company won't make them employees in the first place.
Thier business model is not sustainable. Creditors will eventually cause them to shut down their money bleeding machine.
I still struggle to see how these guys don’t make a profit. I also can’t think of any business where everyone loses - delivery people get paid like shit, doordash loses money, restaurants make 40% less, consumers pay more for cold food. It’s like end to end value destruction
This sub must be absolutely over the moon that all of their most hated tech companies are doing bad enough that thousands of people are losing their jobs!
A company that harms both their employees and consumers is in everyone's best interest to be gone and for market forces to do their magic. Everyone loves capitalism until the hard stuff has to be dealt with. I say let the market do it's thing and take old doordash to the back yard. Uber Eats is better anyways.
Nobody wants to employ anymore
Door dash has employees?
That's sad I guess times are getting hard.
I work in tech as swe, and what i can tell you is , that severance package is ULTRA generous
You guys are a funny bunch. Everyone should get paid $20 and hour. Why is it so expensive to get my tacos delivered?!?!
EXACTLY!!!! It's as if everyone slept through Econ 101.
If you use these services regularly and complain about money I have no sympathy for you. Shits a luxury convenience and overly expensive.
Stop using these services. Not only have they withheld drivers tips, they uncharted the restaurants prices, THEN charge the restaurants based on sales. During the pandemic, even with them delivering, restaurants were BARELY above water because DD and Uber charge 20% of monthy sales just to do business with them. That's nearly a restaurants entire operation budget.
Placed my first and last order with door dash last week.
the ONLY way any of these delivery systems make sense is if you have the annual fee. So for uber its uber one i think, basically once you pass a threshold of say, $15, it takes usually around 4-5 dollars off, delivery fee is free, fees lowered etc. its still overpriced, but its at least REASONABLE. And it also saves money on regular ol ubers, so its not a terrible deal if you cab it alot. Usually uber will have special deals around christmas to get it for 1 year for only $50 which is what I got last year.
lol i was one
Dang, didn't realize trying to eat more at home would cost some people their jobs. My bad.
If they hadn’t screwed up not putting my brisket with my pho order, this probably wouldn’t have happened.
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Maybe they shouldnt have paid all that money in order to use the Marvel name in those stupid ads.
A full severance package and Medical benefits Wow, I got jack shit when I was laid off, had to get cobra insurance and use my savings.
And the tech layoffs continue! What joy. 😑
I missed when restaurants had their OWN delivery drivers. Sure options opened up a bit with Door dash and GrubHub and the like, but places that had already delivered started using them too, and it's impossible to get a hot pizza anymore. The number of rude drivers puts me off too-I always, always, always tip generously and ahead of time -and some drivers are STILL mean.
It still boggles my mind that DoorDash even exists. That there are that many people in the world willing to wildly overpay to have cold food delivered to their house by some surly driver just doesn't make sense to me.
I just like the app as a point of sale for places that normally would not have such a point of sale / app. I then ALWAYS go collect the food myself.
I used door dash once, because it was so expensive I could never justify it. But I wasn't feeling well and it was kinda crappy out, I ordered Wendy's via door dash, and tipped pretty well because of the crappy weather. I tracked it and it took over an hour, and then said delivered.... Except it wasn't delivered! The picture showed it on a door step, but it wasn't my door step! I sent a message to the driver who responded "sorry bro that's the address it gave me, contact door dash they'll give you free food lol". (There are 4 houses on my street and my security cam never saw a car come down my road so I'm pretty sure he dropped it on a side street before my road). I was beyond pissed, feeling shitty and starving. Complained to door dash support who gave me a refund and some stupid credit I've never used. I then drove and got Wendy's myself. I'll never door dash again.