[tylergetsay]

DoorDash appears very inexpensive when you have their DashPass product, however ive notice that basically every food service business will raise their menu prices, and grocery stores will restrict which items that allow you to buy.

This is really interesting because if you have autonmous drivers, DoorDash doesnt really have a lever to lower prices except removing tipping.

[AnotherGoodName]

Doordash itself appears to add at least $1 to all menu items. Which is horrible for certain restaurants that do à la carte. Eg. My local indian place ends up with doubled/tripled prices on Doordash.

Eg. Papad = $0.49 each directly from my local Indian restaurants site (they sell by the single), Doordash gives a price of $1.50 per papad.

Likewise with Naans, dips, etc. All have $1 added. Which can make a $10 lunch ~ $25.

I believe it's Doordash doing this. What gets really weird is Uber Eats and Grubhub seem to match prices and charge exactly the same as Doordash.

For anyone to repeat this. Look up your local indian places actual menu. You'll likely need to use Google images for the name of the restaurant to find an actual picture of a physical menu. Now look up any of the online services, they all seem to price match each other and they'll all have doubled prices for things like naan or roti.

[joshstrange]

I work for a POS company, I can assure you it's the restaurants doing this. They often have different menus with different prices for UberEats/Doordash/etc. One abstraction company I've worked with (You push your menu to them and they push it out to multiple providers then route the orders back to you), even provides tools to be able to increase all your menu items by a set % rounding to the nearest 5/10/25-cents.

The UberEats/Doordashes/etc of the world all charge pretty high fees so this is one way the restaurants can recoup some of that.

Also, I spend way too much time pricing out Doordash vs Official App (normally using Doordash for delivery) vs Pickup just to see what the spread is.

[mbesto]

> I can assure you it's the restaurants doing this.

> The UberEats/Doordashes/etc of the world all charge pretty high fees so this is one way the restaurants can recoup some of that.

Are you blaming the restaurants or the ride share services? I can't tell...

[Antoniocl]

My read of the comment wasn't that he was "blaming" either, but explaining where the fees come from.

It sounds like the direct increase to the consumer's prices is done by the restaurant itself, but the reason the restaurant is charging higher prices are to make up for the fees they're charged by UE/DD.

In other words, UE/DD restaurant-side service fees eat into the restaurant's profit margins, so the restaurant passes on the cost increases to the consumer to get them back.

To be clear, no idea about how closely these statements correspond to the world, just that this seems to be OP's claim.

[gusgus01]

Funny enough, in another top level thread, there's a chain of people claiming it's Uber Eats that adds the 25% and that the restaurant needs to opt out to stop adding the cost.

[joshstrange]

I’m not “blaming” anyone really. I don’t fault the restaurants for raising prices to cover the costs. I don’t love how opaque the whole thing is but I understand both sides.

It’s all a shell games so that they can say “free delivery” and/or not have to call out “this item is $5 but you will pay a 20% more to get it delivered through DoorDash”. They just hide that “fee” in the item price.

[robotnikman]

Just curious, is the company NCR?

[joshstrange]

Nope, I work for Touchpoint https://www.touchpoint.io/

[walterbell]

> Uber Eats and Grubhub seem to match prices and charge exactly the same as Doordash.

https://www.ftc.gov/advice-guidance/competition-guidance/gui...

  Price fixing is an agreement (written, verbal, or inferred from conduct) among competitors to raise, lower, maintain, or stabilize prices or price levels. Generally, the antitrust laws require that each company establish prices and other competitive terms on its own, without agreeing with a competitor. 

  When purchasers make choices about what products and services to buy, they expect that the price has been determined on the basis of supply and demand, not by an agreement among competitors. When competitors agree to restrict competition, the result is often higher prices.

[potato3732842]

Unfortunately, you're not gonna successfully nail a BigCo with a legal team using an "inferred from conduct" clause. That's the kind of thing your municipal or state enforcers use to threaten a peasant into settling.

[walterbell]

How about algorithmic collusion? https://consumerlaw.berkeley.edu/news/california-slams-door-...

[hypeatei]

> I believe it's Doordash doing this

Restaurants set the menu prices higher on delivery platforms to recoup the money lost in fees. They also pay fees to DoorDash, Uber, etc...

[dfxm12]

Consider talking to your local restaurant owner about implementing a lunch special that includes naans, dips, etc. priced somewhere between $10-25. If this is totally on the delivery apps, you'll both get what you want :)

[ripply]

It appears inexpensive because raising prices is the only visibility you have into what the restaurant is paying these services for their order flows (~10-30%).

[darth_aardvark]

The restaurant doesn't choose the prices DoorDash displays, DoorDash does.

[5555624]

Are you sure about that? I thought the restaurant does. On DoorDash's Help page (https://help.doordash.com/merchants/s/article/How-to-Maximiz...) There's a quote: "To provide a high-quality experience for all of our customers, we set prices on DoorDash the same as our in-store prices. DoorDash even enables operators to set different pricing for delivery and pickup, but a core part of us providing high-quality customer service is accomplished through our consistent menu pricing." - Manuel Bucio, Owner, Razpachos" That seems to indicate the restaurant sets the prices.

[paxys]

You really think Doordash sets individual prices for each dish for the half million restaurants that it lists on its service? It is a simple platform. The restaurant sets up and manages its own menu, and Doordash takes a cut of the final sale.

[LunaSea]

Based on the fact that other platforms like GrubHub hijacked Google Places registrations for restaurants and also presented menus of non-customer restaurants in the platform, yes, I would not be surprised at all if that type of shenanigans were going on at DoorDash as well.

[parhamn]

I'm surprised that's not illegal, and I think states will pass laws to fix this.

In my area, an &Pizza is $12 on their App, $19 on Doordash (delivery or pickup). A Chipotle burrito is $9.50 vs $12.35 on doordash delivery (plus every addon is a $1 more expensive).

You can easily pay an extra $4/$5 (30%) per item you order on there.

[OkayPhysicist]

Why would it be illegal? If you think of it as Doordash buying the pizza and then reselling it to you, there'd be no reason not to expect a mark up. You're allowed to price discriminate between different market segments, so even if we pitch Doordash as merely a third party delivery offering, restaurants could still charge Doordash customers more than those that come into their storefront.

[mjamesaustin]

It should be illegal because these services market a subscription to you claiming the benefit of zero fees and free delivery, which is a lie. You are being secretly charged through a higher menu price, none of which is shown to you as a customer.

I can't count how many friends I have had to explain this to who don't understand they are paying 20-30% more even after getting "free delivery" than if they just ordered directly through the restaurant.

[joshstrange]

Also, Doordash does not have "zero fees" for orders when you pay for DashPass, they have "reduced" fees. I do absolutely hate the practice of "Taxes & Fees" being a line item and only when you click into it do you see that the taxes are minimal and most of that is the platform fees.

I'm not sure how UberEats/etc handle it but it's absolutely crazy how much of a markup there is to order through Doordash vs going to pick it up when you factor in Restaurant Upcharge + Doordash Fees + Tip. It's easy to have an $8 item suddenly cost $20 or more total out-of-pocket when all is said and done.

[udkl]

so like, Amazon Prime?

[mrcwinn]

I don't know that it should be illegal. I think the argument would be that it's deceptive. DoorDash, for some customers, claims there is no service fee - it's "free." What they're really saying is: the service of our delivery may be free, but the overall service we will provide is hidden or obfuscated in menu items, and without doing some research at the restaurant, you'll likely not notice.

One could argue it's best for the consumer to very clearly understand how much more they're paying. If not a service fee, here is our aggregate food markup, in plain sight. Transparency, in other words. Let's not borrow any ideas from the healthcare system.

[tshaddox]

> If you think of it as Doordash buying the pizza and then reselling it to you

Isn't this basically impossible to do legally in the U.S.? Wouldn't you run into trouble both with IP law and food safety laws around reselling prepared foods?

[AlexAplin]

This exact arbitrage, performed by Doordash, was exploited.

https://www.readmargins.com/p/doordash-and-pizza-arbitrage

[OkayPhysicist]

IP law, no, for the same reason nothing stops me from reselling the Ralph Lauren shirt I bought as a Ralph Lauren shirt, so long as I make no pretenses of being Ralph Lauren, and I make no modifications to it. The good is the same, IP protected good. I'm just re-selling it.

Food safety? There might be some restrictions related to food handling, but to my understanding they're mostly pretty rote food handling safety training stuff that I'd hope delivery companies provide anyway.

[schrodinger]

It's the opposite — you're legally protected to resell anything you buy and the seller can't stop you. I'm not sure if food has any caveats, but in general, IP law cannot stop you from reselling an item.

It's called the First-Sale Doctrine: https://en.wikipedia.org/wiki/First-sale_doctrine

[ibejoeb]

If you're in a jurisdiction that taxes prepare food, then the government is going to be unhappy about missing the tax on the second sale.

[masfuerte]

This has been happening for a good while. There are loads of instances of food delivery companies creating unauthorized websites for restaurants with a phone number and url owned by the delivery company. They are literally buying the food and reselling it to you at a markup.

If it's illegal nobody cares.

[infecto]

Why should it be illegal? Makes no sense to me. As long as the business is not discriminating based on class it should be ok.

[jchw]

What I personally dislike about this is that it hides the cost of Doordash. It's not intuitive that the prices of items is silently higher on Doordash: it's not like online retailers having different prices for the same SKU, it's the same restaurant. I'd prefer the overhead to show up as its own line item, rather than obscuring the actual cost of the service. I have a feeling less people would choose to Doordash as often if they realized just how much more things cost through it. (Not everyone, but, there are a lot people who really do just do it for convenience, and they could just drive and go pick up their own takeout.)

[tredre3]

> it's not like online retailers having different prices for the same SKU, it's the same restaurant

But those online retailers are supplied by the same distributor who is supplied by the same manufacturer.

    - ManufacturerA -> (Amazon|Walmart) -> Customer
    - RestaurantA -> (Pickup|Doordash|Uber) -> Customer

Isn't it exactly the same? Online retailers add their cost and profit requirements in their pricing, Doordash does the same.

> I'd prefer the overhead to show up as its own line item, rather than obscuring the actual cost of the service.

Me too. Especially that they already ALSO add a service fee in many (most?) locales, in addition to the delivery fee and the tip.

    - Item priced 30% higher
    - Delivery fee
    - Service fee
    - Tip

The first three should be folded in a single line item so that customers realize how much price gouging Doordash is really doing.

[jchw]

You have a point, but I just think it's less intuitive for consumers. Manufacturers often don't even do direct sales, so the only "canonical" price is the MSRP, which is just that, a suggestion. Consumers go shopping at Walmart or Amazon, they don't go "shopping" at Doordash: the menu they're seeing on Doordash is the restaurant menu. In some cases, it is the only online menu that some restaurants even have. To me it is not terribly intuitive that these prices differ.

There is another analog for this, too, though: some retailers indeed would have more or less expensive prices for the same thing when ordering online versus in-store. I think the argument that it isn't unprecedented is pretty solid.

Despite not being entirely unprecedented, I'd still prefer to see this practice ended for food delivery services so it is easier to see the actual true overhead of food delivery services. It really does feel a bit manipulative the way it is right now.

[infecto]

Just because you don’t like it should not make it illegal.

[AlexeyBelov]

Is their position simply that they don't like it and that's it?

[chronci739]

> I'd prefer the overhead to show up as its own line item, rather than obscuring the actual cost of the service.

While that’s what you prefer, the market (most other users, including whale spenders) doesn’t care to know the actual cost.

[jchw]

Without regulation, "the market" wouldn't care about a lot of things. It's actually a good thing that a small minority of people hold the line for people who don't have time to care about issues like this kind of manipulation!

[bitdivision]

I don't think that's true, however doordash surely know that some users might think twice if they saw that number separated out.

[jimbokun]

No.

That is what large corporations want and in the US especially they are the ones that write the laws.

[Forgeties79]

I’m pretty sure DoorDash is the one who increases the price on their end, not the business. And what’s more, they don’t separate the addition out. It’s rolled in to the cost of the item.

I’d be very curious what the conversation is between them. I highly doubt DoorDash negotiates with every restaurant on their platform and wouldn’t be surprised to discover they just tack it on independently. I could see that raising some interesting questions.

All of this is predicated on “ifs” and assumptions, so feel free to throw it out. Just kind of musing here lol

[tredre3]

> I’m pretty sure DoorDash is the one who increases the price on their end, not the business

That is not correct. Doordash takes a 20-30% commission on each sale, so businesses preemptively increase the prices to offset that. They're not forced to and doordash isn't doing it for them. But, you know, they're still effectively "forced" to if their in-store prices don't have great margins to begin with...

[objektif]

Correct it is advised by DD but eventually done by the merchant.

[mbesto]

And they basically have no choice but to increase the price. Their margins are already razor thin.

[Forgeties79]

Ah my mistake then!

[Ekaros]

I think most reasonable would be to mandate that these food delivery services can not take cut from payment going to restaurants, but instead must charge it fully to customer. So restaurant has menu price of 10 and when someone orders delivery from payment 10 goes to restaurant. And delivery service is free to add their margin on top be it 30 or 50%.

[jacquesm]

Doordash and other companies like it take a good chunk of the margins of those stores for the privilege of delivering the items. 15% is not unheard of.

[objektif]

More like 25%+.

[TulliusCicero]

Instead of being illegal, we should just have price transparency. Require companies to show the markup directly in the app.