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DoorDash couriers will need to scan a customer’s ID before delivering alcohol
Category: Doordash in the News Author: admin Date: 3 weeks ago Comments: 0
DoorDash couriers will need to scan a customer’s ID before delivering alcohol

DoorDash is rolling out a new requirement for alcohol deliveries across the US. The delivery person will need to scan a customer’s ID with the DoorDash app to make sure the buyer is of legal drinking age. They’ll also check for signs of intoxication before handing over the booze (couriers are not allowed to deliver alcohol to someone who is visibly intoxicated).

The identity verification measure builds on DoorDash’s existing alcohol delivery rules. You’ll still need to scan your ID into the app before you can complete an order for hooch. Until now, customers only had to show their ID to the delivery person. DoorDash’s goal with the scanning requirement is to make it harder for users aged under 21 to receive alcohol. DoorDash delivers alcohol in 23 states, as well as Puerto Rico, Canada and Australia.

DoorDash

The company tested the dual ID verification measure in several cities. It said the feature made it easier for couriers to verify the user’s identity and age before giving them the order. When it comes to ensuring ID details remain secure, DoorDash says it has “implemented administrative, organizational, technical and physical security controls that are designed to safeguard personal information.” According to the privacy policy, it will permanently delete biometric information that’s no longer needed.

“At DoorDash, safety is a top priority and our goal is to deliver alcohol in the safest and most responsible way possible,” DoorDash’s general manager of alcohol Erik Ragotte said in a statement. “With today’s announcement of two-step or dual ID verification, we’re setting a new industry standard for responsible alcohol delivery. The new safety measures will help ensure alcohol is delivered to people over the age of 21. We will continue to innovate and find even more ways to promote responsible alcohol delivery.”

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DoorDash and Pizza Arbitrage (2020)
Category: Doordash in the News Author: admin Date: 3 weeks ago Comments: 0
DoorDash and Pizza Arbitrage (2020)

Editor’s Note: As this post has gotten a bit of attention, we wanted to add in the name of my friend’s restaurants. They’re fighting the good fight right now, so if you happen to be in the Kansas area, please support Aj’s NY Pizzeria (it’s NY-style pizza based in Manhattan and Topeka, Kansas, and while I’m biased, it’s good).

If capitalism is driven by a search for profit, the food delivery business confuses the hell out of me. Every platform loses money. Restaurants feel like they’re getting screwed. Delivery drivers are poster children for gig economy problems. Customers get annoyed about delivery fees.

Isn’t business supposed to solve problems?

Last week’s Uber-Grubhub news set off some antitrust alarms for me and got me thinking about the business of food delivery as a whole. But let me start this newsletter with a story about Pizza Arbitrage.

image via RedditIn March 2019 a good friend who owns a few pizza restaurants messaged me (this friend has made appearances in prior Margins’ pieces). For over a decade, he resisted adding delivery as an option for his restaurants. He felt it would detract from focusing on the dine-in experience and result in trying to compete with Domino’s.

But he had suddenly started getting customers calling in with complaints about their deliveries.

Customers called in saying their pizza was delivered cold. Or the wrong pizza was delivered and they wanted a new pizza.

Again, none of his restaurants delivered.

He realized that a delivery option had mysteriously appeared on their company’s Google Listing. The delivery option was created by Doordash.

To confirm, he had never spoken with anyone from Doordash and after years of resisting the siren song of delivery revenue, certainly did not want to be listed. But the words “Order Delivery” were right there, prominently on the Google snippet.

He messaged me asking me if I knew anything about Doordash, and oh boy, did I get Softbank-triggered. I had just read about their $400 million Series F and it was among the WeWorkian class of companies that, for me, represented everything wrong about startup evolution through the 2010s. Raise a ton of money, lose a ton of money, and just obliterate the basic economics of an industry.

Doordash was causing him real problems. The most common was, Doordash delivery drivers didn’t have the proper bags for pizza so it inevitably would arrive cold. It led to his employees wasting time responding to complaints and even some bad Yelp reviews.

But he brought up another problem – the prices were off. He was frustrated that customers were seeing incorrectly low prices. A pizza that he charged $24 for was listed as $16 by Doordash.

My first thought: I wondered if Doordash is artificially lowering prices for customer acquisition purposes.

My second thought: I knew Doordash scraped restaurant websites. After we discussed it more, it was clear that the way his menu was set up on his website, Doordash had mistakenly taken the price for a plain cheese pizza and applied it to a ‘specialty’ pizza with a bunch of toppings.

My third thought: Cue the Wall Street trader in me…..ARBITRAGE!!!!

If someone could pay Doordash $16 a pizza, and Doordash would pay his restaurant $24 a pizza, then he should clearly just order pizzas himself via Doordash, all day long. You’d net a clean $8 profit per pizza [insert nerdy economics joke about there is such a thing as a free lunch].

He thought this was a stupid idea. “A business as successful a Doordash and worth billions of dollars would clearly not just give away money like this.” But I pushed back that, given their recent obscene fundraise, they would weirdly enough be happy to lose that money. Some regional director would be able to show top-line revenue growth while some accounting line-item, somewhere, would not match up, but the company was already losing hundreds of millions of dollars. I imagined their systems might even be built to discourage catching these mistakes because it would detract, or at a minimum distract, from top-line revenue.

So we put in the first order for 10 pizzas.

He called in and placed an order for 10 pizzas to a friend’s house and charged $160 to his personal credit card. A Doordash call center then called into his restaurant and put in the order for those 10 pizzas. A Doordash driver showed up with a credit card and paid $240 for the pizzas.

It worked.

Trade 1

We went over the actual costs. Each pizza cost him approximately $7 ($6.50 in ingredients, $0.50 for the box). So if he paid $160 out of pocket plus $70 in expenses to net $240 from Doordash, he just made $10 in pure arbitrage profit. For all that trouble, it wasn’t really worth it, but that first experiment did work.

My mind, as a combination trader and startup person, instantly had the though – just run this arbitrage over and over. You could massively even grow your top-line revenue while netting riskless profit, and maybe even get acquired at an inflated valuation 🙂 He told me to chill out. Maybe this is why he runs an “actual business” while I trade options while doing brand consulting and writing newsletters.

But we did realize, if you removed the food costs this could get more interesting.

Trade 2

The order was put in for another 10 pizzas. But this time, he just put in the dough with no toppings (he indicated at the time dough was essentially costless at that scale, though pandemic baking may have changed things).

Now suddenly each trade would net $75 in riskless profit ⇒ $240 from Doordash minus ($160 in costs + $5 in boxes).

This got a bit more interesting. If you did this a few times a night, you could start to see thousands in top-line growth with hundreds in pure profit, and maybe you could do this for days on end.

So over a few weeks, almost to humor me, we did a few of these “trades”. I was genuinely curious if Doordash would catch on but they didn’t. I had visions of building a network of restauranteurs all executing this strategy in tandem, all drinking from the Softbank teat before the money ran dry, but went back to work doing content strategy stuff.

Was this a bit shady? Maybe, but fuck Doordash. Note: I did confirm with my friend that he was okay with me writing this, and we both agreed, fuck Doordash.

Tricking businesses onto your platform and creating additional headaches for small business owners in the pursuit of Softbankian growth is a bad as it gets. Many restauranteurs were complaining about their Google listings being “hijacked” by Doordash, sometimes even usurping their own preferred delivery.

These underhanded tricks aren’t unique to Doordash though. In recent weeks there has been some great work coming out around a Yelp – Grubhub phone scam. This one is just priceless (seriously, read this Buzzfeed piece). Grubhub for their own sites generates a phone number for each restaurant that goes to a centralized, Grubhub owned call center. If someone calls in and orders via this number, the restaurant gets charged a fee. Apparently, some enterprising BD folks came up with the idea that Yelp could put the Grubhub phone numbers in place of the real restaurant phone number on the Yelp listing. Customers who think they’re “helping” their local restaurants by calling in the order are still creating a fee for Grubhub. 

Which brings us to the question – what is the point of all this? These platforms are all losing money. Just think of all the meetings and lines of code and phone calls to make all of these nefarious things happen which just continue to bleed money. Why go through all this trouble?

Grubhub just lost $33 million on $360 million of revenue in Q1.

Doordash reportedly lost an insane $450 million off $900 million in revenue in 2019 (which does make me wonder if my dream of a decentralized network of pizza arbitrageurs does exist).

Uber Eats is Uber’s “most profitable division” 😂😂. Uber Eats lost $461 million in Q4 2019 off of revenue of $734 million. Sometimes I need to write this out to remind myself. Uber Eats spent $1.2 billion to make $734 million. In one quarter.

Amazon just bailed on restaurant delivery in the U.S.

What is it about the food delivery platform business? Restaurants are hurt. The primary labor is treated poorly. And the businesses themselves are terrible.

 This Business Insider piece did a good job covering the problematic dynamics of the industry:

As this conflict comes to a boil, one thing is becoming clear: there are no winners in this fight.

Restaurant owners are losing money. Diners are seeing their costs raised, either by delivery companies that need to pay delivery drivers or by the restaurant owners who raise prices to offset delivery fees. And delivery drivers still make low, unpredictable wages frequently with no benefits. 

How did we get to a place where billions of dollars are exchanged in millions of business transactions but there are no winners? My co-host Can and my restaurant friend both defaulted to the notion “delivery is a shitty margin business” when discussing this post. But I don’t think that’s sufficient here. Delivery can work. Just look at a Domino’s stock chart. But, delivery has been carefully built as part of a holistic business model and infrastructure. Maybe that’s the viable model. 

After the start of this pandemic, my friend actually launched in-house delivery at one of his restaurants. He said he’s starting to get a sense of the economics and explained he’s starting to get a sense of the volume required per location to make the economics reasonably work. That’s what is so odd to me about third-party delivery platforms. The business of food delivery clearly is not intrinsically a loser. Domino’s figured it out. Every Chinese restaurant in New York City seemed to have it figured out long before any platform came along. My friend is figuring it out.

That’s the thing about how industries have evolved over the past decade. I know I ascribe ZIRP as the cause of all ills in the world, but this sometimes feels like the greatest ZIRP story ever told.

You have insanely large pools of capital creating an incredibly inefficient money-losing business model. It’s used to subsidize an untenable customer expectation. You leverage a broken workforce to minimize your genuine labor expenses. The companies unload their capital cannons on customer acquisition, while this week’s Uber-Grubhub news reminds us, the only viable endgame is a promise of monopoly concentration and increased prices. But is that even viable?

Third-party delivery platforms, as they’ve been built, just seem like the wrong model, but instead of testing, failing, and evolving, they’ve been subsidized into market dominance. Maybe the right model is a wholly-owned supply chain like Domino’s. Maybe it’s some ghost kitchen / delivery platform hybrid. Maybe it’s just small networks of restaurants with out-of-the-box software. Whatever it is, we’ve been delayed in finding out thanks to this bizarrely bankrolled competition that sometimes feels like financial engineering worthy of my own pizza trading efforts. 

The more I learn about food delivery platforms, as they exist today, I wonder if we’ve managed to watch an entire industry evolve artificially and incorrectly. Arbitrage is about taking advantage of market inefficiencies and for all the newly minted day-traders out there, perhaps it’s time to start looking into frontier markets like pizza. 

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). 

Note 2: A few months ago, in the pre-pandemic times, I was at an East Village pizza place and watched as the owner was arguing with a Doordash driver. The owner insisted the driver take the pizza in a heated bag so the customer didn’t get cold pizza, but leave an ID so the driver would be compelled to return the bag. The driver argued the amount of time it would take to come back to return the bag would mean he couldn’t make enough deliveries to “pay my rent”. #Innovation.

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‘Y’all Going to Jail’: Customers Received Free Food and Alcohol Due to DoorDash Glitch
Category: Doordash in the News Author: admin Date: 3 weeks ago Comments: 0
‘Y’all Going to Jail’: Customers Received Free Food and Alcohol Due to DoorDash Glitch

There’s nothing quite like free food, and a spate of DoorDash customers received free grub on Thursday thanks to a technological glitch.

SOPA Images | Getty Images

“On the evening of July 7th DoorDash experienced a payment processing issue, and as a result, some users were able to check out without an authorized form of payment for a short period of time,” a DoorDash spokesperson told Entrepreneur. “We were subsequently notified that some users were placing fraudulent orders, and we immediately corrected the issue. We’re actively canceling fraudulent orders, and are in touch with merchants impacted to ensure they are compensated for any unauthorized orders they may have received. We work to ensure that we are always offering the highest quality of service to the communities we serve, and we sincerely apologize for any inconvenience caused by this.”

The U.S.-based food delivery service was trending on Twitter through Friday after thousands of posts cluttered feeds with customers claiming to accidentally get free deals on everything from McDonald’s to $1,000 tequila bottles.

Aww nah, y’all going to jail. DoorDash not having this pic.twitter.com/kFsfKHmluG

— j (@ItsJB23_) July 8, 2022

Y’all think doordash free till y’all wake up tomorrow & they strip y’all accounts down

— (@__JectBabyTy) July 8, 2022

I’m blew I missed the Doordash glitch. I always miss the free shit

— Tea (@teathescorpio) July 8, 2022

y’all getting free food on DoorDash and ordering McDonald’s ?! y’all trippin

Whoever let this glitch happen at DoorDash, you’re getting fired

— Shawna (@lovee_smg) July 8, 2022

The food delivery service recently made several updates to its app, including a new feature that allows customers to leave written reviews for restaurants after ordering and a “most-liked” tab that will allow customers to see top-rated restaurants in their area.

“We’re always thinking about how we can make the shopping experience even more frictionless and relevant for our customers,” Helena Seo, head of design at DoorDash said in a statement at the time. “With the launch of the Most Liked Items feature, we’re saving consumers over 400,000 hours annually, reducing decision fatigue when deciding what to order. We’re excited for consumers to find the delight in discovering new restaurants and dishes, trusted and loved by locals.”

DoorDash’s valuation suffered in pre-market trading earlier this week after Amazon announced a new deal with rival Grubhub that will grant Amazon Prime users a free year of delivery for orders over $12. Shares were down around 7%.

As of Friday afternoon, DoorDash was down nearly 59% in a one-year period following the post-pandemic burst of in-home ordering.

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BitPay Confirms SHIB, DOGE Acceptance In Uber Eats But Here’s The Catch
Category: Doordash in the News Author: admin Date: 3 weeks ago Comments: 0
BitPay Confirms SHIB, DOGE Acceptance In Uber Eats But Here’s The Catch

July 3, 2022 by Lipika Deka

Good news for Shiba Inu SHIB and Dogecoin DOGE holders. Users can now pay for their food deliveries from Uber Eats and DoorDash using their cryptocurrencies enabled by payment service provider BitPay

Besides that BitPay also extended the service to include other cryptocurrencies such as Bitcoin [BTC], Ethereum [ETH], Bitcoin Cash [BCH], Litecoin [LTC], XRP, Dai [DAI], Wrapped Bitcoin [WBTC], and stablecoins.

However, one has to purchase BitPay gift cards and BitPay cards as Uber Eats and DoorDash do not accept direct crypto payments yet.

Additionally, crypto holders can purchase gift cards through BitPay from a wide range of well-known takeout restaurants including quick service and sit-down favorites like Bonefish Grill, Chili’s, Carrabba’s Italian Grill, Steak ‘n Shake, and many more. 

According to the blog post, a second payment option for users is via BitPay partner Menufy which allows one to pay for takeout or delivery from local restaurants or national chains directly from a crypto wallet.

For Europeans, one can take advantage of the same service using Takeaway.com, the blog added.

BitPay Confirms SHIB, DOGE Acceptance In Uber Eats But Here’s The Catch 3
A month ago, another giant fast-food player- Chipotle, a Mexican restaurant chain, enabled Shiba Inu, Bitcoin, and other cryptocurrencies through the digital payments platform Flexa.

This means of payment was made available in more than 2,975 Chipotle restaurants across the United States.

Shiba Inu Payments Now Enabled in 179 Countries
BitPay began supporting the Shiba Inu coin in December 2021. In early June the payment firm collaborated with a noncustodial wallet Edge where customers can buy, sell, trade, and spend over 130 digital assets.

Through this integration, Shiba Inu payments were made accessible in 179 nations, which has further boosted the asset’s adoption.

And the good news is that the current market drawdown has hardly put a dent in the token’s growing popularity. In fact, SHIB was among the seven new coins that Coinbase Commerce added to its payment options, TronWeekly reported.

From numerous exchanges and supermarket chains to high-end retailers, all have jumped on the bandwagon to add the popular meme coin as a form of payment.

Luxury watchmakers like Tag Heuer, Hublot, and Breitling are some examples that have recently incorporated cryptocurrencies via payments processor BitPay.

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