Delivery Drivers Got Higher Wages. Now They're Getting Fewer Orders

The on-demand deliver-anything business model just isn't sustainable. You can only have it when it's propped up by some combination of temporary subsidy (i.e., VC funding), price obfuscation (e.g., markups, fees, and tips), and shifting the costs and risks to drivers.

DoorDash et al. aren't innovators in anything other than creative contracting and marketing. There's no magic practical efficiency that makes their business work.

Pizza has also traditionally been either independent shops or large chains, often with their own drivers, meaning there's either 1 party (the company with employees), or rarely 2 parties (the company, and a "contractor" driver). Now with the Uber/DoorDash/Deliveroo model there are 3 parties, the shop, the driver, and the network, all looking to take a cut. For a business that is relatively low margin already, adding a middleman trying to take their own cut is just not possible without either raising prices, or subsidising with investor cash.

I dont think its a scale thing, its an opportunity cost thing where there is very much a narrow price band where delivery can do high volume and with the price increase to drivers you cause more people interested on driving while also kneecapping demand. The pizza thibg is also more that the verticle integration lets you cut out atleast one middleman's worth of markup keeping your business profitable ehile also keeping your end user price in that high demand price band.

Reminds me we had a steak delivery place growing up. Googling, I see Steak Out still exists? Never remember ordering it.

Grocery delivery is the worst for me. The store gives you the worst produce possible, and if something’s not in store, the substitution is often nonsensical.

> I doubt the drivers were stealing food, but the restaurants obviously thought they could get away with theft and not be penalized.

I wouldn't doubt the drivers were stealing food. We've had occasions where the "wrong driver" picked up the food, but then "got a flat tire" and couldn't bring it back. This was a multi-hundred dollar order. I don't buy that crap for one minute. Some driver stole the food, and the restaurant may also have been at fault for not checking to make sure the proper driver got the order.

> ...a 30 minute back and forth for partial credit for missing food when they used to just issue you a full refund in 30 seconds.

Back when I regularly had to go to an office, my coworkers and I tried out a bunch of the delivery services. The one we settled on was Bite Squad because they apparently paid their drivers as actual employees[0], so an hourly wage and benefits, and had actual performance standards. If an item was left off, Bite Squad would dispatch a driver to go get it and bring it to us.

All of the contractor-based services would just refund for food and be done with it. The problem is, that isn't what we wanted. If we'd wanted money instead of food, we wouldn't have ordered. The service expects us to do the management of additional attempts instead of it being part of their service.

Ever since Bite Squad left Seattle, and especially now that I don't have to go to an office more than once or twice a month, I've not bothered with the food delivery apps.

0 - This was pre-pandemic, before Bite Squad "overhauled" their business model.

We didn't get delivery for as much stuff. In the US, I felt like delivery restaurants were mostly just pizza before (and in areas places you might have another type of cuisine known for doing delivery, like Chinese takeout places). Was born in 85 and I don't really remember getting delivered food from places other than pizza. Well, office catering would be a different story, but for regular folks yeah.

> One question: What did this people do before all of these apps came into play?

We went to a restaurant and ate there. Or we got takeout.

Only pizza was ever "delivered" because you could batch up multiple pizzas and deliver them simultaneously.

I don't even remember any delis doing delivery and at least their products travel well.

Before, it was mostly only pizza places that regularly offered delivery if people didn't want to leave the house or cook something.

Sometimes, the options in an area extended to sandwiches or Chinese food or a little bit beyond.

So that's what we did if we were either lazy or busy: We ate pizzas, or sandwiches, or Chinese food. These things can all transport fairly well.

We simply did not get soggy Whoppers, cold fries, or tacos delivered. (Some of us still don't, as we feel that it is the path of madness.)

The problem is that "we" (the government) is making it illegal for people to work for the best offer that they had. So now some portion of them aren't making a wage at all.

>So on one hand we want to ensure everybody gets paid a decent wage. ... But then that gets countered by not wanting to pay too much for a luxury service,

Yup. It's a tale as old as time.

Simply raising raising wages just means fewer people will be employed/contracted, thereby maintaining ultimate cost.

Another side effect is with higher wages, people have more money, which means more money in circulation, which means merchants will charge more for goods/services rendered. Aka inflation.

"Just raise wages." is an easy and seemingly simple thing to say and do, but economics aren't easy nor simple.

I don’t use them.

I always pick up my own food, but I’m aware that makes me an anachronism.

> What did this people do before all of these apps came into play?

The same thing we do now: get takeout, sit down at the location, or cook at home.

Hell, even before these apps were invented I always just went and got my pizza or grabbed it on the way home.

Growing up (upstate new york) the only places that delivered were pizza places. When I was a bit older, Jimmy Johns would deliver if you were in the office parks near their location. Right by colleges a few more places would deliver, things like calzones, cookies, beer, etc. But they were propped up by the density of the university.

Getting a meal delivered from a restaurant for a single person or a couple was always a luxury item. You got food delivery when you had a lot of people together.

Pizza was different, as mentioned in a sibling comment, because the pizzas themselves were cheap and shitty, there were only 3 pizza shops that delivered in your area: Domino's, later Papa Johns, and usually some popular local chain (not Little Caesars, not Pizza Hut, neither delivered.) They frequently took way longer than they said they would, each driver was delivering pizzas to 5 locations average on a run, and if it showed up cold you would eat it anyway, or throw it in the oven for a few minutes.

This individual attention did not exist, because it was obviously too expensive to provide. Only upper-middle class professionals got non-pizza restaurant deliveries, it was more expensive than it is now.

Chinese might be an exception, too. A lot of people would get Chinese delivered. But it would always be a ton of stuff in those neat, stackable white boxes, and the person delivering rarely spoke English (recent immigrant.)

I was in Shanghai years ago and we had a pile of menus from local restaurants and the number of someone who would go collect food from any of them for around a dollar. No app needed.

>What did this people do before all of these apps came into play?

Simple, the same thing many of us still do today:

1. We make our own food at home, using stuff we bought at the grocery store.

2. If we want restaurant food, we get up and leave home and go to the restaurant and eat there, and enjoy freshly-made food instead of cold food that was made 45+ minutes ago.

3. If we really wanted to eat professionally-made food at home, we ordered pizza. The pizza industry figured out how to do delivery cost-effectively decades ago (and keep the food hot too, something the new app-delivery industry apparently still hasn't quite figured out). Also, take-out has been around for ages.

>There have been many days where I would have been happy to eat food from one of 10 different places, and we picked one more or less at random.

That seems like a nightmare. I sure don't want to go through the trouble of making 10 different orders just to save 10%. If I wanted to jump through that many hoops I'd pick it up myself.

The steelman argument for minimum wage is that it acts as collective bargaining for groups that are otherwise too big and too sparse to cooperate with each other.

But yeah there's obviously a some point at which the returns are diminishing, e.g. if it was $100/hour nothing would get done. Legally at least.

You'd be amazed how many people forget about supply and demand. Then those people are surprised by the perfectly predictable outcomes that they didn't intend.

Maybe poverty wages, but a slave wage?

The model works if you decrease the platform's cut.

IMO, it would be neat to see a government provided "gig brokerage" of sorts that handles the dispatch of things like this (even including long haul delivery, maybe even a mechanical turk equivalent).

When the service is ultimately provided by a contractor, what's the point of having middlemen compete?

Perhaps Jaget lives in a three-bedroom 6th story walkup with five other delivery drivers.