[AlexandrB]

> It's like Uber are trying to shoot themselves in the foot with all the cost squeezing and profit seeking at the same time they're in a fundamental fight defining what they are.

I don't think they have a choice. UberEats is fundamentally unprofitable. If it was run profitably, the high(er) prices would drive a large portion of their customers away and into the arms of other "startups" willing to run at a loss or towards picking up the food themselves. Plus Uber can't pretend to be an early-stage startup anymore and their constant quarterly losses are starting to add up.

I'm still not convinced this new food delivery industry is viable without constant cash injections.

[ab_testing]

COVID-19 is like the golden age of food delivery. If these food delivery apps are not profitable now, they will probably never be profitable. When the severity of COVID subsides in a few years, people will like to go out to eat again rather than have it delivered.

[iso1631]

The only reason I could think of to use something like ubereats, deliveroo, justeat, etc would be if I wanted a non-pizza delivered while I was staying in a hotel in a strange city somewhere.

If I'm at home I'll look at the menu of my favourite indian/chineese/whatever place, phone them up, and they deliver it as they have done for decades.

I've spent two nights in a hotel since March, normally it's 70 a year. One night I ordered a dominos as I got back to the hotel just before 2300. The other night I ate out with a supplier.

Likewise with Uber, if I'm at home and not flying off somewhere, I'm not going to be ordering a taxi, either to get to the airport, or when I'm in a strange city on the other side of the planet.

I can see this is the golden age of takeaways and home-delivery (which basically means amazon or groceries), but I don't see it for takeaways.

[cortesoft]

I get so frustrated when people act like these food delivery services aren’t a WAY better user experience than the old version of having to call for delivery.

So many times, I will be super busy with the kids, or work, or housework, and I will just pull up DoorDash with one hand (while the other is feeding a hangry 1 year old) and hit ‘reorder’ on one of my past meals. Literally 15 seconds and food is on the way.

Compare this to having to call someone, wait on hold, give my phone number/address, tell them my order, correct the mistakes, find my wallet, get out my credit card, give them the number, confirm the number and expiration and security code, then sign a paper copy with the tip when the driver drops it off.

Can I do the old style of delivery? Sure, but man it is a lot easier now.

[mrweasel]

Sure, if that's how food delivery works where you live, then I'm sure that the SF/Silicon Vally type services works better. But that's because the service suck where you live.

Most fast food place either use JustEat or Hungry to accept your order and take your credit card information, if they don't have their own website or app. They will have their own drivers, employed and paid directly by the restaurant and they don't expect a tip.

That's what I compare any "startup" food delivery service to. So they will always be worse and more expensive, because a third party is now involved.

[treeman79]

Most local places have a very strong accent.

Tastier the food, stronger the accent.

Several places we flat out can’t communicate with.

The worse is a local pizza joint with the thickest Indian accent I’ve every heard. I work with Indians, and I still can’t understand them. Really good pizza.

Ask the whole kid angle. Kids screaming, work screaming, wife screaming...

[sneak]

I wonder if there's a business in building apps specifically for individual restaurants (chains or even local ones, using cookie-cutter apps) that integrates card processing and such; white label doordash. The business would pay a flat monthly fee for the service and would have to have their own delivery people. Apple Pay et c make the payment side of things painless and prevents people having to re-enter details in each app.

Why isn't this a thing? Is it that few/no restaurants have delivery drivers?

I can't imagine many restaurants benefit that much from the discovery features in UE/DD/etc.

[cortesoft]

This loses such a big advantage that the current services have... only entering your information once and being able to order from any restaurant in a single portal.

As for discovery, I don’t have data, but I know personally that about half of my regular order spots are places I found by scrolling through door dash.

[novok]

Shopify for restaurants, with shopify pay?

[Balgair]

Not to trivialize your experiences (toddlers are not easy), but for me, the list you give isn't all that much of a barrier. Yes, it is simpler to use the app, but not all that much more. Also, where I am, they take the credit card at the door, not over the phone. Most use a Square-style card reader attached to a work phone, even the mom-n-pop delivery, even now in the pandemic (they use gloves mostly).

[cortesoft]

Again, I am not saying it isn't doable to order the old fashioned way, but the newer system is CLEARLY easier and faster. There is simply no way you could order and be done with a call in order in 15 seconds.

Your argument (that it is not much of a barrier to use the old way) can be made for so many of the quality of life improvements we have made over the course of human history. Not every advancement is an entire new category of things we can accomplish; so much is just slight improvements that save time and make things a bit easier.

I feel like there has been a backlash against time saving tech, where people wax nostalgic about how much better the older/slower systems were. I don't understand it. I am so happy for all the timesaving advancements we have made over the years. Now, if we don't use that saved time wisely, that is a whole other issue. However, I don't think going back to slower systems is the solution to not using our free time well.

[ABCLAW]

> I feel like there has been a backlash against time saving tech

It isn't a luddite backlash. It's just that in many cases the value-add for customers doesn't justify the price difference.

There are certain benefits to apps that exist, don't get me wrong. Discoverability, flexible pricing, direct-to-consumer-marketing, etc. But most of those don't apply to me at the consumer level. Do I want to pay 20% more for the convenience of browsing menus? Not really. I'm on the app to buy food and get it delivered. Insofar as some places now offer delivery where before they didn't, I benefit. Insofar as the same places I used to frequent now apply a markup to cover the cut the app gets, I lose out.

The UX improvement of being able to press 'reorder' has never eclipsed calling into my favourite local spot, asking for the regular, wishing the owner well, then discovering he put extra dumplings in the bag for me.

[talentedcoin]

I don't think the backlash is against saving time FWIW (although I get you, time is precious especially with kids around!!). It's more something like -- is this an investment society would bother to make without loads of cheap VC money?

I view it as an unstable equilibrium -- something's gotta give sooner or later, these businesses are barely sustainable. Is the convenience ultimately worth it in the aggregate, if Uber needs to embrace tactics like these just to survive?

(I admit I have a bias here, I think the gig economy sucks.)

[propogandist]

by using Uber and virtually all delivery apps, you're eating into the restaurant's margins and allowing a big corporation to shaft the delivery guy and really everyone in the supply chain.

You're also enabling a parasitic corporation to generate more revenue, when it should be shuttered with nearly a billion in losses every quarter.

[DEADBEEFC0FFEE]

Personally, I prefer to give my money directly to the food maker if possible. They are local and I want them to succeed. Admittedly I don't use these services often, but a couple of local places have mobile friendly webpage and I'm happy with the friction. I think over the food makers will simply gat decent platforms.

[pintxo]

My preferred Sushi place will recognize me by my phone number and take my order within seconds. Payment in cash at the door. There is no reason why the process could not be quick and hassle free, even using the phone.

[awodol]

The problem is most restaurants in my city unless they're pizza just don't deliver, and this applies to lots of cities across the country let alone suburbs.

[iso1631]

I wonder if it's a cultural thing, what country are you in?

[awodol]

US. I've had delivery when I visited family in London or Dubai where there was a much better delivery experience so I know it can be great, but it just doesn't seem to be a thing outside of a few cities here.

[rietta]

This was exactly me in Oakland, CA, last year when on a business trip from Atlanta. On the way to the hotel, I was on a shuttle with a pilots and flight crew heading to stay overnight. Was advised not to go walking around by myself. Ended up using Doordash for the first time that night at the Hotel. Now my wife has us on the monthly subscription plan back home because of COVID.

[iso1631]

> but I don't see it for takeaways

.... from somewhere new

[birdyrooster]

Mmm Naan Pizzas are good

[WrtCdEvrydy]

Food delivery will probably never be profitable unless you're able to schedule food delivery days ahead... and utilize the same pathing algorithms used for regular deliveries (like UPS and Fedex).

There's a maximum amount of time someone will wait (1 hour) and the product degrades after it's created (cools off)

[toast0]

I mean, it's not that bad. Delivery is an important part of many restaurants (pizza, jimmy johns (sandwiches), chinese in many cities). The issue in my mind is those restaurants with hugh delivery volume can do multiple deliveries in a single run, and can time the completion of the food to the return of the driver, so the food doesn't spend a lot of time sitting at the restaurant, and neither does the driver.

It's very hard to do that when you're aggregating restaurants and drivers.

[WrtCdEvrydy]

Right, but there's an incentive to perform well because if you don't, the food is returned.

Uber can just write off the loss as more and more money is shoveled into it like coal was shoveled into an engine on a trail.

[Reedx]

I'm guessing they're just trying to hold on until they can convert to robotic delivery. Then it'll be profitable. In the meantime they're preloading the platform, building brand recognition, etc.

[rrrrrrrrrrrryan]

I wouldn't go so far as saying they're "fundamentally unprofitable". They have a couple long-term options: the often-discussed one is autonomous driving (though it's becoming increasingly obvious this is many years out), but the less discussed one is vertical integration.

It's not hard to imagine them choosing to pursue Amazon-style vertical integration where they own the "restaurants" themselves. I put "restaurants" in quotes, because it'll almost certainly just be warehouse-style kitchens, where drivers skid up out front and grab food from heated tables, and you won't be able to dine-in at all. It would fill the same role for aspiring restaurateurs as food trucks do today: a startup cost, low-barrier to entry way to build out a brand, rapidly iterate menu-items, and begin building revenue to eventually secure a business loan to open a proper restaurant.

If UberEats can really squeeze both the drivers AND the restaurants, there's no fundamental reason that food delivery can't be done profitably - pizza companies have been doing it in almost all markets for decades.

Brick and mortar retail stores got eaten by Amazon warehouses, and it seems inevitable that many brick and mortar restaurants will eventually get eaten by a massive tech company as well.

[et-al]

> If UberEats can really squeeze both the drivers AND the restaurants, there's no fundamental reason that food delivery can't be done profitably - pizza companies have been doing it in almost all markets for decades.

Pizza delivery is profitable because they sell cardboard and depend on teenager drivers relying on their parent's auto insurance.

Anyone who's actually looked at the person delivering their food would have thought twice about the margins in food delivery. To spell it out: food delivery is often performed by immigrants with few choices for under-the-table work. The margins are thin-to-none. The current system has worked because no one's investigating the thousands of independent restaurants.

Now tech companies are trying to do the same thing, but multimillion dollar corporations have a harder time hiding their labor exploitation from the public.

Going back to ryan's point, I agree that with full vertical integration (dirt cheap ingredients and centralised factory kitchens), food delivery could be profitable, but at what point is one just selling frozen food from a microwave/oven in the back of a car?

[s_dev]

>It's not hard to imagine them choosing to pursue Amazon-style vertical integration where they own the "restaurants" themselves. I put "restaurants" in quotes, because it'll almost certainly just be warehouse-style kitchens, where drivers skid up out front and grab food from heated tables, and you won't be able to dine-in at all.

The term for this is dark kitchens.

[darrenoc]

It's noteworthy that Deliveroo is already doing the kind of vertical integration you describe, it's called "Deliveroo Editions"

[zepearl]

>It's not hard to imagine them choosing to pursue Amazon-style vertical integration where they own the "restaurants" themselves.

I always wondered something about those meals that are available on airplanes:

in the past I liked quite a lot most of them (e.g. a small piece of meat/fish/other, some vegetables and/or rice, a slice of bread, a small dessert) => wouldn't it be quite profitable to have a similar delivery service for "kits/menus" like those ones (just e.g. ~4 different "kits" available to be ordered daily), cold (but pre-cooked if needed) that only need to be warmed up at home? (if 3 stewards/esses, on a moving tube, managed to warm that up for 300 people then I guess that I'll manage to do the same for myself at home)?

I admit that on one hand the "delivery"-part of the service would be related only to getting fresh (uncooked or "freshly pre-cooked") stuff (not ready for consumption), but on the other hand that way the delivery could be spread over a longer timespan (multiple deliveries per trip, better delivery organization, therefore less costs) and could be left in the mailbox (assuming at least a mediocre insulation of the package).

Here in Switzerland/Zurich I am aware of some similar services, but they deliver only the ingredients (then I would still have to actively cook). Supermarkets do have some similar pre-cooked stuff, but most (not all, but most) is quite terrible (probably because there the stuff has to be able to lie there for days/weeks - definitely not similar to what I used to eat on airplanes) and especially it never changes.

(I used to fly only in Europe using "Swiss", "Air Berlin", "Lufthansa", maybe as well "KLM"/"Air France", always to/from Zurich - your experience with other airlines / in other location might be different)

Woudln't it be nice to get back home and find in the mailbox a ready-to-be-warmed-up (maybe actually "cooked", but in an extremely simple way) menu?

The delivery, being all sourced from the same place and being spread over many hours would not be as expensive as it is currently done for hot stuff coming from multiple restaurants, and the small amount of different menus (4 as mentioned above or slightly more) would allow to buy more source material for less $.

EDIT: I admit of not having any clue how the companies that prepare meals/menus for airlines operate => there might therefore be some important details that make the whole concept crumble... :)

[rrrrrrrrrrrryan]

Switzerland is strange because restaurant food is so tremendously expensive there compared to the rest of the world. In most cities in America, for $5 you can get a half-decent meal that's quite a bit more palatable than airline food, and for $10 you can get something from (mostly immigrant-run) restaurants that's somewhat nutritious as well.

There are meal-delivery services here that are basically what you describe, but they usually deliver food weekly and they're kind of pricey. They're mainly targeting time-strapped single people who are trying to eat healthier and don't want to do all the mental work that goes into grocery shopping, meal prepping, cooking, etc.

[ithinkinstereo]

It's getting harder and harder these days to get a good meal in the US for under $10 all-in w/ tax outside of rural super low COL areas.

In any of the major urban areas in the states, a $5 budget would limit you to various street foods (a couple of tacos, a banh mi, maybe a slice of pizza) or a couple of items from the dollar menu at the various fast food chains. Frankly, your typical airline meal is more filling and nutritious (but not as tasty, unless you're flying a middle eastern or flagship asian airline, of course).

A decent McDonald's meal for example, would blow up your $5 budget pretty easily.

[zepearl]

Thanks for the reply - I agree & disagree with you.

On one hand you are absolutely correct stating that swiss restaurants are in general more expensive than anywhere (subjective - e.g. a 30$ small menu might be ok here, but we do have as well a higher income and going to the restaurant is not something that people do often), but on the other hand I did like airline food (which you basically describe as being "the worst" while for me was on par with one offered by restaurants), therefore we have a mismatch of our experiences.

(talking about restaurants, I must mention that Stockholm was for me a lot more expensive than Zurich)

Personally, I would have all kind of doubts about a $5 meal (in most parts of the world, if it's not something extremely simple).

> There are meal-delivery services here that are basically what you describe, but they usually deliver food weekly and they're kind of pricey. They're mainly targeting time-strapped single people who are trying to eat healthier and don't want to do all the mental work that goes into grocery shopping, meal prepping, cooking, etc.

I'm not currently aware of something like that in my area , but my profile is very similar (and I did try to cook different stuff, but the failure rate is quite high and the overall quality quite low). Still, I think that the concept that I described was a bit different than that?

[rrrrrrrrrrrryan]

I can expand upon the $5 - $10 meal by example.

I'm from southern California. I worked in Wellington, New Zealand for a stint, and I found that restaurants were priced about the same as back home. That is to say, an average sit-down restaurant meal of equivalent quality was roughly the same price in USD.

However, in America, there's an entirely different class of much cheaper food (takeout food), and younger people in metropolitan areas eat this food very often. These were usually powered by cheap immigrant labor, often paid under the table to skirt taxes and mandatory benefits.

Labor protections in New Zealand are much higher, of course, and without an easily exploitable underclass, this food simply can't exist there. There weren't really regular kiwis who ate out 1 - 2x per day - virtually all of them cooked most of their meals at home themselves.

This is the environment in which these food delivery companies are operating. These restaurants already have extremely thin margins, consumers are price-sensitive, and as long as the delivery company is just a middle-man, they'll struggle to do this thing profitably. If they lose access to their cheap labor by having to re-classify drivers as actual employees, it might be impossible.

[zepearl]

Interesting! Thank you :)

[curryst]

I use a company called Snap Kitchen for that (no affiliation). They have a menu, I pick what meals and how many I want. Twice a week they cook the food, package it up, and deliver it to my door. Let's you pick how many calories per day you're aiming for, and if you're on one of a couple dozen diets they support they'll limit the auto-suggested meals for you.

The food tastes pretty good. It's better than frozen food, but still a far cry from a freshly cooked meal. It's not terribly cheap either. If I did all 3 meals from them 5 days week, it cost somewhere around $8 a meal. I ended up quitting because of the price. It's too expensive to use for many meals, and has to short of a shelf life to keep around as a backup if I don't want to cook.

[zepearl]

Yes, eating only this way would end up becoming expensive - but I would do it as well ~2-3 times per week, at least to have a break from cooking and to eat something different.

[lumost]

I don't understand why an investor would fund unprofitable Uber 2.0. Without a massive differentiator there is no reason to believe their trajectory would be any different from Uber's - except with increased capital requirements from being the third(fourth?) mover.

Uber's burned 10s of billions in the hopes of becoming a few hundred billion dollar company. Would Uber 2.0 need to burn hundreds of billions in the hope of becoming a hundred billion dollar company?

[mikepurvis]

Uber 2.0 would probably make the same pitch Uber did— that all of this is temporary moat-building as we prepare for a glorious self driving future.

So I think the difficulty is less around investors being more savvy to the economics of ride sharing and delivery services, but that they're more savvy to the realities of how far off those technologies are. And that the entrenched firms like Waymo will be far, far better positioned to offer an autonomous taxi service on day 1 than some plucky startup will be.

[mrweasel]

It would be interesting to hear why investors keep throwing money at Uber. Does anyone honestly believe that they will ever be profitable? You would have to throw billions at them to keep them alive long enough for autonomous vehicles to be a possible rescue.

[Shivetya]

Has there been a delivery service that didn't have these issues? Raising the prices is effectively the only means, people don't seem to be put off by how much Instacart can jack prices; Costco even warns you the prices are much higher if you choose this as delivery.

Pizza chains and others who own their delivery process can at least set where they will deliver and tend to encourage bigger purchases to avoid delivery charges and hopes of fresher food.

I am going to assume the only type of agreement would be tighter integration with restaurants to the point the service name is hidden, as in contracting out drivers to particular restaurants but the difficulty there is guaranteeing a driver is always available. Basically an outsourcing for drivers. Restaurants get some filtering of drivers and drivers have a set number of stores with instant familiarity.

[barkingcat]

I can imagine a UberChef where an Uber driver gets an order, and drives a freelance Chef to a freelance kitchen where the chef cooks the food (groceries provided by an uber shopper who can also get one-off ingredients from specialty stores), the chef cooks the food to order (steak, medium rare, or seafood boil for a party of 2, etc) - and then uber driver delivers the food.

[lotsofpulp]

If you’ve ever managed a food business, this is unimaginable.

[barkingcat]

only if you imagine small.

at Uber scale, they can get VC funding for $500-800 million, to hire the thousands of chefs that were laid off during the covid shutdowns. You can also imagine going international, so Uber Chef is actually thousands of chefs around the world. (hiring chefs without the overhead of restaurants - that's the play)

[selestify]

Why?

[vkou]

Because any food business already has insanely tight margins, and operates incredibly efficiently.

The scenario proposed by the grandparent poster adds so much waste and slack and overhead in the system that the family-owned-and-operated Thai kitchen on Main St. will eat Uber's lunch, and the Dominos franchise two doors down from it will pick through its bones.

[barkingcat]

the family operated kitchen on Main St. has rent, fire codes, safety equipment needs, some form of sanitation code/inspection to pass with the city.

Uber Chef ignores all of that and bypasses all overhead - you don't need a restaurant or even the physical location of a building to employ chefs to cook food. No need for health inspections or expensive fire suppression equipment. (you use people who want to rent their home kitchens out for cooking)

That's Uber's raison-d'etre - to bypass all legal restrictions and externalize all overhead in the way of getting the items to you.

This isn't a joke, this is what Uber did with their taxi service at the beginning as MVP so why not do it to food services as well?

[vkou]

The reason a restaurant wants the physical location of a building to cook food is because you can't make industrial quantities of food in your kitchen. Well, you can try, but it's going to be slow, inefficient, and your kitchen will become unusable quite quickly.

[Psyonic]

If you use your home kitchen commercially, you'll still need to get health inspections, etc. Even camp kitchens at Burning Man (https://burningman.org/event/preparation/health-safety/permi...) get visits from health inspectors.

[ithinkinstereo]

I recall some East-Bay based startup a few years ago that basically tried this model.

They allowed individuals to sell food / operate as a pop-up restaurant.

IIRC, it got closed down because of health and food-safety related regulations.

A more sustainable version of this business model is basically a food truck / cart.

[lotsofpulp]

Food business is laborious, hard work that needs to be done at undesirable times (when others are out enjoying themselves). It’s hard enough to find quality workers via humans, I find it hilarious that one would be able to do it via software.

It’s also a high liability business, especially when dealing with animal products.

Not to mention prepared food is barely affordable for the vast majority even with the tiny margins that exist today, so the only people who would be able to afford such an on demand personalized chef service surely could just afford their own chef?

[treeman79]

I once got paid 17 dollars to deliver a smoothie. Took me nearly an hour.

I found most of clients fell into two categories.

  Poor and really should not be using the service.    

Rich areas where cost isn’t an issue.

Middle of the day was to a lot of businesses/schools. Lunch tips were crap so I avoided that time frame.