[treis]

It's falsifying the restaurants prices. Grubhub shouldn't be able to say a dish costs $15 when it actually costs $10. It's a false statement that harms the restaurant.

Sure, they will get some deliveries but what about the people that would buy at $10 but not $15? And what about the people that won't dine in because they think prices are 50% higher than they are.

GrubHub is skimming valuable customers while discarding others. That's good for them but ultimately harmful for the restaurant.

[occamrazor]

It is unethical only if Grubhub says “I will deliver joe’s 12$ burger to you for a 4$ delivery fee” when the burger costs actually 9$. There’s nothing wrong if they say “I will bring you Joe’s burger for 16$ including delivery.”

In general we don’t expect resellers to reveal their cost of goods sold.

[a_c_s]

> It is unethical only if Grubhub says “I will deliver joe’s 12$ burger to you for a 4$ delivery fee” when the burger costs actually 9$

That's exactly what Grubhub is doing.

[pwinnski]

GrubHub describes themselves as a delivery service company, not a reseller. With resellers, I can comparison shop. GrubHub tries to make that difficult at best.

[boring_twenties]

Is Grubhub the one marking up the prices, or are the restaurants doing it (to recoup their Grubhub fees)?

[BurningFrog]

Finally a reasoned critique I can agree with.

Took you long enough, thread!

[chrisseaton]

> It's falsifying the restaurants prices.

It's marking them up... yeah. Is that a problem? Do you realise when you go to a store all the products are 'falsified' by marking them up on top of what the producer sells them to the retailer for?

[spideymans]

Imagine Google Shopping marks up all BestBuy items by 50 percent. And then you decide to never shop at BestBuy, whether it be in person or online, because Google’s marked up pricing lead you to believe that BestBuy’s prices are outrageous.

[treis]

No, because since the beginning of retail stores that is how it has worked and everyone understands that. For food delivery it has always been that you buy from the restaurant and pay menu price + delivery charge. Grubhub et.al. have come along and used that understanding along with an implied relationship to the restaurant to deceive the customer.

[chrisseaton]

I don't really get it.

Doordash or whatever says 'for $x we will put a WhateverBurger burger into your hand'. As long as that's what they achieve, this seems fundamentally honest to me.

As a consumer I don't really care where that $x goes to - Doordash, WhateverBurger, delivery person... doesn't seem my business to interfere in people's private financial agreements.

The diner gets offered a deal and can take it or not.

The restaurant gets offered a deal and can take it or not.

The delivery person gets offered a deal and can take it or not.

Seems to me like everyone is acting ethically here, and everyone is accepting a deal they're presumably happy with. If they aren't, they can turn it down and go elsewhere.

[treis]

>Doordash or whatever says 'for $x we will put a WhateverBurger burger into your hand'. As long as that's what they achieve, this seems fundamentally honest to me.

What percentage of customers do you think understand that Grubhub is marking up their food?

>If they aren't, they can turn it down and go elsewhere.

That's precisely the problem. Some of the restaurants customers are turning it down and going elsewhere because Grubhub has misrepresented their prices.

[chrisseaton]

> What percentage of customers do you think understand that Grubhub is marking up their food?

Why do they need to care about the markup? If the burger price seems like a good deal, go for it, otherwise don't.

> Some of the restaurants customers are turning it down and going elsewhere because Grubhub has misrepresented their prices.

Well then that seems like the situation is fixing itself due to everyone's free ability to do what they want? So why are we complaining?

[treis]

>Why do they need to care about the markup? If the burger price seems like a good deal, go for it, otherwise don't.

Why don't you answer the question?

>Well then that seems like the situation is fixing itself due to everyone's free ability to do what they want? So why are we complaining?

In what way is the situation being fixed?

[panzagl]

Is the markup similar for all restaurants? If Joe's burger is $5 marked up to $6, and Fancy Joseph's burger is $10 marked up to $12, isn't any marketing/signalling value of the price maintained?

[ceejayoz]

> Doordash or whatever says 'for $x we will put a WhateverBurger burger into your hand'. As long as that's what they achieve, this seems fundamentally honest to me.

That's not what they do, though. The receipt shows line items with a cost for the food, a fee for the service, and a delivery fee.

The problem is there's an additional fee for the service hidden in the supposed cost of the food; customers don't actually know what Doordash's cut really is.

[chrisseaton]

> customers don't actually know what Doordash's cut really is

But why would you care? I don't need to know the bill of materials for all my transactions. When I buy a coffee I don't expect to know how much they paid for the beans.

[root_axis]

That doesn't seem like a good comparison, the burger is not a "bill of materials" it's a final product available directly to customers by the restaurant, consumers would definently care that they are being sold a marked up burger that is available to them for 25% cheaper. If a delivery company charges me 70 dollars to deliver a flat screen tv that's fine, but if they charge me 70 dollars but also markup the price of the TV 25% I'd consider that pretty dishonest and would at least want to know that I have the option to save 25% by managing delivery on my own.

[ceejayoz]

I care because they're explicitly listing a fee for the app that doesn't accurately reflect what that fee is.

If you wanna say "delivering a pizza will cost you $20" and leave at that, fine. If you tell me the Grubhub fee is $5 and it's actually $10, I'm upset.

[pwinnski]

That is fundamentally not what Doordash says.

Doordash or whatever says 'for $x we will put a $y WhateverBurger burger into your hand,' but $y is already higher than a WhateverBurger costs. People are left thinking that $x isn't that high a cost for delivering a $y burger, but the actual delivery cost is $x plus some percentage of $y, so both the numerator and denominator are falsified.

They're lying about their value proposition.

[chrisseaton]

> Doordash or whatever says 'for $x we will put a $y WhateverBurger burger into your hand,' but $y is already higher than a WhateverBurger costs.

So add $x and $y together. If that price works for you go for it, if not, don't.

A markup plus a fee is already a common thing. It's done so that there is a minimum to cover expenses plus something that can vary with higher value items because you can get more profit from people who are willing to pay for more luxury items. It's not strange or unusual or a foreign concept to anyone already living in a Western economy.

I don't see why you'd care how they arrive at the final price. Just look at the final price.

[pwinnski]

What I think you're missing is that price is (or has been) an incredibly valuable input signal when determining the value of a previously-unknown restaurant. if I'm in the mood for a $20 meal, I know to avoid places that offer $40 meals, and vice-versa. My expectations for a $15 lunch are different than my expectations for a $25 lunch. Most people use price as an important signal, communicating something about the restaurant or meal.

These vendors are distorting that signal by misrepresenting the price. If it were clean-cut, and the original price were still visible, and the delivery as a separate 15-20% fee, then fine, I could do exactly what you suggest. Is it or is it not worth it to have this delivered right now?

But it's not. Let's say I see an arbitrary restaurant serving the kind of food I'm in the mood for, say Vietnamese food. I can then look and see the price to know roughly what quality of food to expect: Is it closer to $10 or $30 for an entree, since those are two very different things.

The total price might not even matter to me. But if I order a $20 entree with an extra delivery fee, and what shows up is a $10 entree, then that's a problem and most people will believe that the restaurant offers terrible value, because they were lied to by the intermediary.

That's the issue. It's not "am I will to have my In-N-Out burger delivered for $6 extra," it's "with Doordash lying to me about these restaurants I've never been to, I have no idea whether this is worth doing or not until I've already paid and accepted delivery."

[mikeg8]

A restaurant is a brand and a brand gets to determine the pricing of their products. Pricing is one of the ways customers relate to the brand's identity. Having a 3rd party, which may still add value to both the brand and end-user, interject and abstract from the brand's determined prices is unethical, period. These delivery services should really be increasing their delivery fees to cover their costs, but they know customers will not go for a higher line item fee, so they choose to obscure it through price inflation that is not obvious to the customer. Now the customer may think the price of an item is always higher, so they may avoid the location in a future dine-in experience. This is harmful.

[chrisseaton]

> A restaurant is a brand and a brand gets to determine the pricing of their products.

But that’s just not true. Branded products vary in price on different retailers. A can of Coca-Cola can be wildly different prices in different places. Are you not used to this as a consumer?

> Having a 3rd party, which may still add value to both the brand and end-user, interject and abstract from the brand's determined prices is unethical, period.

I don’t understand - have you never bean to a supermarket or a department store before? They sell other brands in their store. Do you not realise they’re also marked up?

[mikeg8]

I am very aware of how wholesale and retail pricing works - but that is a very different distribution channel, and customers enter supermarkets and department stores well aware of this. Restaurant pricing is based on (with maybe some outlying exceptions) a direct-to-consumer distribution model - something you seem be be having an impossible time understanding. I'm fine with delivery companies marking up the prices - as long as they are transparent about it - which they are not. it's deceitful to the customer experience, and I think you are intentionally playing dumb here.

[abc-xyz]

I’m pretty sure that in most countries, a store can’t just sell another company’s products without entering an agreement with them. This agreement allows the company to set a minimum and maximum price for the product.

Imagine you’re selling chocolate that you want people to associate with luxury/wealth. To achieve this you might want to limit resellers to be 5 star hotels and luxury stores rather than the 1 dollar store.

[chrisseaton]

> I’m pretty sure that in most countries, a store can’t just sell another company’s products without entering an agreement with them.

Of course you can. What makes you think you can't?

[abc-xyz]

The fact that your company’s product end up being represented by the store and its actions. Mistreating employees and customers, discrimination, bad customer service/return policy, terrible product placement, etc. There are so many ways a store can hurt your company’s reputation by association.

[chrisseaton]

But I mean there just isn't any law like you think there should be.

People are free to resell any goods they own (exceptions for things like controlled substances, other things with regulations etc.)

[panzagl]

Look up 'grey market'. Lots of companies try to do what you suggest, but in the US there are very few laws that support such a business model.

[umanwizard]

I don’t know what countries are like that, but that’s certainly not the case in the United States.

[jiggunjer]

It is, even amazon bans resellers sometimes.