He was pretty much smug all the time.
There is that.
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But, it’s ok because everyone has a share.
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Also, fuck Doordarsh. I imagine most here agree.
Too bad. The only thing that can stop a bad guy with a pizza, is a good guy with a pizza.
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He’s not reducing the total capacity of pizza. There aren’t less customers using DoorDash’s promotion because he’s using it, so there’s no ‘lost marketing’. In fact, with the high volume, they may prioritize extending their deal and promotional placement to increase the throughput, because algorithms are frequently quite stupid.
Or just not make the pizza and pocket the difference. Who’s going to complain? Not the customer, not the delivery driver that now has a much lighter load. Probably need a token placeholder so as to not be committing fraud.
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Important note at the bottom of the source article:
Note 1: We found out afterward that was all the result of a “demand test” by Doordash. They have a test period where they scrape the restaurant’s website and don’t charge any fees to anyone, so they can ideally go to the restaurant with positive order data to then get the restaurant signed onto the platform. If we had to pay a customer fee on the order, it would’ve further cut into our arbitrage profits (though maybe we could’ve incorporated DashPass as part of the calculation).
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Don’t worry about the resale, no one resells pizzas. You’ve correctly identified the issue.
The pizzaria owner orders one of their pizzas from Door Dash for $16 and is paid $24 for giving the pizza to Door Dash to deliver to anyone. The pizzaria owner nets $8, anyone gets a free pizza, Door Dash gets to claim volume while losing $8 dollars per pizza and the investors get to dump money into a pit to increase the stock price until there’s no dupes willing to lend more money to dump into the pit through additional stock sales and the whole thing collapses. This is at best a failure on Door Dash’s part to appropriately price their delivery of the pizzaria’s pizza.
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There was not some other customer who would have bought those 10 pizzas if only he had not
Those 10 pizzas existed because he ordered them from himself
The transaction did not reduce demand from other buyers in any way
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EDIT: yeah, I was wrong, see below.
If that $10 is not profit then how can adding another $160 make a profit of $170
By their numbers: $7 to make each pizza. 10 pizzas. Total cost to the pizzeria = $70.
Doordash charge: $16. 10 pizzas. Total cost to the pizzeria to buy their own pizzas = $160
TOTAL SPENT BY PIZZERIA = $230 (losses)
TOTAL RECEIVED BY PIZZERIA = $240 (profit)
FINAL = $10 in profit
Yep, I was wrong.
EDIT: okay, thanks, you had me think about it again and that clarified it. Appreciate the prodding, I knew there was some mistake I was making. As long as your costs PLUS the cost Doordash charges you are less than Doordash pays you, you make money this way.
Also note: You would have made $170 just selling ten pizzas to regular customers. So you’re out $160 in pure profit. I think that was my original point, but it got lost in the thread as we moved along.
You do in on a quiet day when you don’t have a lot of customers, not when you have along line of impatient customers outside your door.
Anyway, it was more of an experiment than an actual business model.
I’d love to hear the disussion beteen Doordash and the pizzeria after the trial period Amstrad mentioned was over:
“Would you like to sign on to our platform,? Look at how many orders we gave you last week”
“We know, we bought them”.
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Only if there is no limit to the amount the company will spend on marketing , promotion of its restaurants. If it’s just a glitch, then I suppose everyone is on there own. I’d be surprised if this doesn’t violate the terms of the pizza company’s contract. It is also arguably unethical.
There was no contract. They were not affiliated with DoorDash. DoorDash pretended to the unsuspecting user that there was a relationship and implied the company used DoorDash for delivery.
You can’t violate a contract you never signed.
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People are working for companies like Doordash because they need the income, and I don’t like using delivery services because they are such bad employers. What’s the solution?
Platform co-ops like Ride Austin are one proposed solution:
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Don’t forget that the pizzera now also have ten pizzas that they could resell for pure profit.
(Or presumably they could donate them to the homeless and probably claim a tax rebate).
Plus, screwing over venture capitalists? Priceless!
Some restaurants are going to their own delivery system.
There was a local story last week about some delivery coop,the article really didn’t explain it but I assume it involves the restaurants directly.
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