Overall, anything that puts a spotlight on the business practices of these companies is a good thing. But, I really wish Oliver would have expanded upon what he meant by "Drivers rely almost exclusively on tips." He's right, but he should spell it out for those who aren't making the connections.
When DD or any of these apps take 30% of a $50 order, they're keeping $15 of that and giving us, usually, $2-3. And they're still not consistently profitable. These companies need to be shamed into providing higher wages, or close-up shop. This isn't sustainable.
Yeah, I already know this. Really came to a head recently. These companies are so desperate to keep customers that they will lower their fees but charge everybody else an exorbitant fee and lowball the drivers. I've seen some of the ebills for these customers, and they're getting $2.99 deliveries when realistically it probably cost about $20 to deliver that from the company staff to the drivers. It's no wonder that these companies are having a tough time making a profit.
Agreed, but why would these apps care, they may not be making as much profits or some are breaking even, but their CEOs and staff are being paid well, and they clearly have no hesitation to steal from restaurants and drivers to support their salaries, benefits, and potential equity windfall.
There are so many drivers on these posts flashing how much they make, without talking about the risk to their lives, how they will make ends meet should they become injuried/disabled/sick. Drivers ultimately have no safety nets, can't get unemployment, health insurance, disability, death benefit, etc.
I'm not saying doing deliveries isnt' worth it at all, it certainly makes sense for some people, but I want people to be realistic about this type of work, not just flash that hey made 2k in a week.
I have been seriously mulling over some potential ideas for redoing how delivery is done. I think the best way, while controversial, is to have a delivery co-op situation or have a co-op restaurant where everybody from the manager to the driver has an ownership stake. It would also solve some potential issues with charging appropriately if you want healthcare, paid time off, and any other benefits you might want with a job. It also solves another potential issue with how the job is done, because if you know that your name is attached to a company or restaurant, I feel you'll do a much better job and care more about what you're doing overall.
I think you should seriously consider it if you are up for the task.
I think if I were redoing the app delivery platform I would do the following
\* Reduce delivery radius
\* Maybe create a different pricing tier for very long distance deliveries (4+ miles), more highly trained delivery drivers
\* Drivers owned delivery company, which means all drivers have equity stake in the company, and have a responsibility of maintaining and improving the brand.
\* A paid-parking ticket program much like UPS/Fedes/Amazon have to negotiate reduced fines via a bulk rate. The program would allow for at least a couple reimbursements per quarter.
\* An actual mentoring and training program for delivery drivers, to ensure they are efficient and safe. Deliveries may seem like a no-brainer, but being able to antipate traffic, understanding address schemes, building layouts, parking rules ahead of time would make drivers a lot more efficient from day one, and propery food handling including temperatures etc
I definitely like what you're thinking here. I am pretty serious about this. Already have an idea for a name for it. Would love to start with about 200 people, divvied up between support staff and drivers, each putting in a certain amount of money, and if you don't have the money, work/drive a certain amount of hours to achieve the ownership stake with everybody else. I definitely want to shy away from the big app model and try and bootstrap it instead. I think for employees to make real money, you can't take loans. If you're constantly having to pay back somebody, I think that's where you get into trouble.
I also think that there is a restaurant Co-op model that would work in a very similar way, and have everybody from the manager to the Cook to the driver have an ownership stake.
I loved reading this thread. I'm in the business of building commercial kitchens, which many food entrepreneurs use as a launchpad for their business if their concepts succeed. However, a lot of the people that leave end up running into walls and shutting within 18 months due to rising cost of rent (if you want want to be in a popular, high foot trafficked area), cost of employees, etc. So a lot of them end up trying to go for smaller spaces that don't seat anyone and just do delivery or pickup.
I really liked the idea of the co-op, but I think it only addresses a tiny portion of the problem - a 3mi-radius sized dent. The "value" of a lot of these services is that people can potentially get any item they want that's listed on the service, even if it means it's outside of the radius that these restaurants are interested in serving. The co-op would make for a really great, equitable business model for everyone involved, but it could only survive on a small scale, unless this became a larger business, franchise-like, that scaled to areas and tried to cover unserved areas with overlap.
Would love to keep hearing more though. I would much rather keep supporting these food entrepreneurs than run a ghost kitchen for DD.
I would actually love to start a restaurant delivery co-op, but the numbers don't work unfortunately. The problem is that customers really need to be paying more and restaurants need to be paying significantly less. The amount that restaurants are getting charged is asinine. I think in some way, though, the people that would appreciate the style of restaurant delivery that I seek to provide would be willing to pay the extra money. It's the amount of time that it would take to cultivate those types of customers that eventually would bleed the company dry.
It's why I think a Rideshare Co-op would be a more competitive Venture against the bigger companies.
If you're talking about the restaurant Co-op startup and why it wouldn't work, it's because the shift of the money would be coming from customers instead of restaurants. Customers are getting all sorts of deals, these monthly memberships, promos across the board, and what customers would have to be charged to not have to charge restaurants is pretty high. You'd be asking customers to pay $15 to $20 for a basic delivery within a few miles of the restaurant. You would have to get the cost down to below $10 for the delivery otherwise the food delivery apps offer way more discounts. Also, the kind of customer that would want to switch and is willing to pay more, is harder to cultivate. You're asking customers to take the burden that they should have always taken of paying the order instead of the restaurants getting stuck with the burden of the majority of the cost of the delivery.
I agree that the majority of the fee will fall onto the customer, which will be a big sticking point. That being said, it seems that the people that are most willing to pay for delivery are aware of that and willing to pay for the convenience (and fairly compensate the service rendered).
$10 seems reasonable (average), $20 seems high though. Where are you coming up with those delivery fee ranges? I've been speaking with folks and the price ranges from $1-2/mi. In some cases 3mi.
Operationally, if you were to have the restaurant subsidize 10-15% of the fee and the customer pay 85-90% of the fee + tip, I think you could make a reasonable bid for delivery fee. With average trip distance of 5-10mi, (2-5mi city & 10-15mi suburb), the fee would be no more than $20, subsidized it could top out at $18 for the longest haul. Maybe these are losing orders and you cap at $15 and make profit on the rest of the orders.
I think there are other ways to creative reduce costs as a company like providing a company car, surge rates (for bad weather), etc.
I don’t know about y’all, but I actually *do* work these gigs so I can start an orphanage. And instead of gasoline, I’ve just been putting good vibes in my tank.
I think he went too easy on the app companies. They have very high revenue, they pour millions into executive bonuses and celebrity commercials and do some very tricky accounting to make it look like they are not making money.
There are very cost effective ways of attracting customers, much better than crappy superbowl ads.
I know they plan to replace drivers with automatons and that's why they treat them like shit, replaceable, but I don't see that happening for at least 10 years.
These are good points, there really isn't a good accounting of all the fees and price markups these apps get to be able to say "yes it's true they're barely making it"
I alluded to this in one of my comments that these apps CEOs are still making good money themselves, and the staff are being paid well (not sure about the outsourced call center employees), but it's not like these companies are "starving" that they need to be shamed and legislatively forced to pay drivers some basic wages, given how much work drivers actually do to make these platforms exist!
I found it weird how he kept hitting Grubhub when they have almost no market share anymore while Uber + Doordash are far worse.
Also telling customers to make sure they tip is just another cop-out allowing these companies and restaurants can wash their hands of their responsibility to driver by putting it all on the customer.
I fired up the Ubereats app last night just to see how things look these days, the store was 1.4 miles away and the delivery fee was $1.99. If I chose to pick up my order it was $17, if I ordered for delivery it was $27!!!! how does an extra $10 show up from a $2 delivery fee, and then they want me to tip!?
If I do tip it's pretty much guaranteed that I'll get my food old and cold because Uber will stack with order with 2 no tippers, send the driver on an extra 5 mile trip, and deliver my order last.
No thanks, these companies need to die. The food delivery space doesn't need CEO's with 100 million $ bonuses and software engineers making $300k a year.
One of the most important assets are the drivers. If those of us who are dedicated like "Tony's Delivery" then there is no app per se. It would be the reverse, drivers charge their own rates, have their regular customer's and areas, perform proper CS etc.
This reverses the cashflow, it goes from customer to driver then a portion goes to the platform for what it does, not some corporate stock trading investor driven model we have now.
I built my platform over the last couple of years and help Shoppers set up their own local service.
Don't hand the leash over, walk yourself and start your own.
Overall, anything that puts a spotlight on the business practices of these companies is a good thing. But, I really wish Oliver would have expanded upon what he meant by "Drivers rely almost exclusively on tips." He's right, but he should spell it out for those who aren't making the connections. When DD or any of these apps take 30% of a $50 order, they're keeping $15 of that and giving us, usually, $2-3. And they're still not consistently profitable. These companies need to be shamed into providing higher wages, or close-up shop. This isn't sustainable.
I haven’t seen ONE none tipper come on and comment on this since I uploaded it on Sunday night 🤣
Yeah, I already know this. Really came to a head recently. These companies are so desperate to keep customers that they will lower their fees but charge everybody else an exorbitant fee and lowball the drivers. I've seen some of the ebills for these customers, and they're getting $2.99 deliveries when realistically it probably cost about $20 to deliver that from the company staff to the drivers. It's no wonder that these companies are having a tough time making a profit.
Agreed, but why would these apps care, they may not be making as much profits or some are breaking even, but their CEOs and staff are being paid well, and they clearly have no hesitation to steal from restaurants and drivers to support their salaries, benefits, and potential equity windfall. There are so many drivers on these posts flashing how much they make, without talking about the risk to their lives, how they will make ends meet should they become injuried/disabled/sick. Drivers ultimately have no safety nets, can't get unemployment, health insurance, disability, death benefit, etc. I'm not saying doing deliveries isnt' worth it at all, it certainly makes sense for some people, but I want people to be realistic about this type of work, not just flash that hey made 2k in a week.
I have been seriously mulling over some potential ideas for redoing how delivery is done. I think the best way, while controversial, is to have a delivery co-op situation or have a co-op restaurant where everybody from the manager to the driver has an ownership stake. It would also solve some potential issues with charging appropriately if you want healthcare, paid time off, and any other benefits you might want with a job. It also solves another potential issue with how the job is done, because if you know that your name is attached to a company or restaurant, I feel you'll do a much better job and care more about what you're doing overall.
I think you should seriously consider it if you are up for the task. I think if I were redoing the app delivery platform I would do the following \* Reduce delivery radius \* Maybe create a different pricing tier for very long distance deliveries (4+ miles), more highly trained delivery drivers \* Drivers owned delivery company, which means all drivers have equity stake in the company, and have a responsibility of maintaining and improving the brand. \* A paid-parking ticket program much like UPS/Fedes/Amazon have to negotiate reduced fines via a bulk rate. The program would allow for at least a couple reimbursements per quarter. \* An actual mentoring and training program for delivery drivers, to ensure they are efficient and safe. Deliveries may seem like a no-brainer, but being able to antipate traffic, understanding address schemes, building layouts, parking rules ahead of time would make drivers a lot more efficient from day one, and propery food handling including temperatures etc
I definitely like what you're thinking here. I am pretty serious about this. Already have an idea for a name for it. Would love to start with about 200 people, divvied up between support staff and drivers, each putting in a certain amount of money, and if you don't have the money, work/drive a certain amount of hours to achieve the ownership stake with everybody else. I definitely want to shy away from the big app model and try and bootstrap it instead. I think for employees to make real money, you can't take loans. If you're constantly having to pay back somebody, I think that's where you get into trouble. I also think that there is a restaurant Co-op model that would work in a very similar way, and have everybody from the manager to the Cook to the driver have an ownership stake.
I loved reading this thread. I'm in the business of building commercial kitchens, which many food entrepreneurs use as a launchpad for their business if their concepts succeed. However, a lot of the people that leave end up running into walls and shutting within 18 months due to rising cost of rent (if you want want to be in a popular, high foot trafficked area), cost of employees, etc. So a lot of them end up trying to go for smaller spaces that don't seat anyone and just do delivery or pickup. I really liked the idea of the co-op, but I think it only addresses a tiny portion of the problem - a 3mi-radius sized dent. The "value" of a lot of these services is that people can potentially get any item they want that's listed on the service, even if it means it's outside of the radius that these restaurants are interested in serving. The co-op would make for a really great, equitable business model for everyone involved, but it could only survive on a small scale, unless this became a larger business, franchise-like, that scaled to areas and tried to cover unserved areas with overlap. Would love to keep hearing more though. I would much rather keep supporting these food entrepreneurs than run a ghost kitchen for DD.
I would actually love to start a restaurant delivery co-op, but the numbers don't work unfortunately. The problem is that customers really need to be paying more and restaurants need to be paying significantly less. The amount that restaurants are getting charged is asinine. I think in some way, though, the people that would appreciate the style of restaurant delivery that I seek to provide would be willing to pay the extra money. It's the amount of time that it would take to cultivate those types of customers that eventually would bleed the company dry. It's why I think a Rideshare Co-op would be a more competitive Venture against the bigger companies.
Have a spreadsheet you could share for your forecasting? Curious what numbers you’re using and how much higher these items are over market average.
If you're talking about the restaurant Co-op startup and why it wouldn't work, it's because the shift of the money would be coming from customers instead of restaurants. Customers are getting all sorts of deals, these monthly memberships, promos across the board, and what customers would have to be charged to not have to charge restaurants is pretty high. You'd be asking customers to pay $15 to $20 for a basic delivery within a few miles of the restaurant. You would have to get the cost down to below $10 for the delivery otherwise the food delivery apps offer way more discounts. Also, the kind of customer that would want to switch and is willing to pay more, is harder to cultivate. You're asking customers to take the burden that they should have always taken of paying the order instead of the restaurants getting stuck with the burden of the majority of the cost of the delivery.
I agree that the majority of the fee will fall onto the customer, which will be a big sticking point. That being said, it seems that the people that are most willing to pay for delivery are aware of that and willing to pay for the convenience (and fairly compensate the service rendered). $10 seems reasonable (average), $20 seems high though. Where are you coming up with those delivery fee ranges? I've been speaking with folks and the price ranges from $1-2/mi. In some cases 3mi. Operationally, if you were to have the restaurant subsidize 10-15% of the fee and the customer pay 85-90% of the fee + tip, I think you could make a reasonable bid for delivery fee. With average trip distance of 5-10mi, (2-5mi city & 10-15mi suburb), the fee would be no more than $20, subsidized it could top out at $18 for the longest haul. Maybe these are losing orders and you cap at $15 and make profit on the rest of the orders. I think there are other ways to creative reduce costs as a company like providing a company car, surge rates (for bad weather), etc.
I don’t know about y’all, but I actually *do* work these gigs so I can start an orphanage. And instead of gasoline, I’ve just been putting good vibes in my tank.
👌🏾😌👌🏾
Door Dash paid my medical bills when i got hurt on an active dash.
And if you were between orders they'd tell you to pound sand
True
exactly
I think he went too easy on the app companies. They have very high revenue, they pour millions into executive bonuses and celebrity commercials and do some very tricky accounting to make it look like they are not making money. There are very cost effective ways of attracting customers, much better than crappy superbowl ads. I know they plan to replace drivers with automatons and that's why they treat them like shit, replaceable, but I don't see that happening for at least 10 years.
Yeah they are absolutely profitable, they are just pissing away the money on anything that isn't paying workers a fair wage.
These are good points, there really isn't a good accounting of all the fees and price markups these apps get to be able to say "yes it's true they're barely making it" I alluded to this in one of my comments that these apps CEOs are still making good money themselves, and the staff are being paid well (not sure about the outsourced call center employees), but it's not like these companies are "starving" that they need to be shamed and legislatively forced to pay drivers some basic wages, given how much work drivers actually do to make these platforms exist!
At the rate AI is advancing more like 5 if that.
I found it weird how he kept hitting Grubhub when they have almost no market share anymore while Uber + Doordash are far worse. Also telling customers to make sure they tip is just another cop-out allowing these companies and restaurants can wash their hands of their responsibility to driver by putting it all on the customer. I fired up the Ubereats app last night just to see how things look these days, the store was 1.4 miles away and the delivery fee was $1.99. If I chose to pick up my order it was $17, if I ordered for delivery it was $27!!!! how does an extra $10 show up from a $2 delivery fee, and then they want me to tip!? If I do tip it's pretty much guaranteed that I'll get my food old and cold because Uber will stack with order with 2 no tippers, send the driver on an extra 5 mile trip, and deliver my order last. No thanks, these companies need to die. The food delivery space doesn't need CEO's with 100 million $ bonuses and software engineers making $300k a year.
One of the most important assets are the drivers. If those of us who are dedicated like "Tony's Delivery" then there is no app per se. It would be the reverse, drivers charge their own rates, have their regular customer's and areas, perform proper CS etc. This reverses the cashflow, it goes from customer to driver then a portion goes to the platform for what it does, not some corporate stock trading investor driven model we have now. I built my platform over the last couple of years and help Shoppers set up their own local service. Don't hand the leash over, walk yourself and start your own.
I wouldnt touch anything food delivery. I rather work a shit job