Pizza packs well, is ordered in large quantities, is easy to store on the seat, is fairly high margin, stacks, and the stores doing this delivery have dedicated drivers with good estimates for how much volume they'll be doing in a night and a fixed supply of drivers with guaranteed wages. They also didn't deliver as far.
App drivers are constantly playing this game of guessing where the next order will come from and where they'll end up.
Also Pizza companies doing their own delivery may be happy with the delivery fee being less than their cost of delivery if it gets them more orders than they would otherwise as long as the order is profitable. e.g. $10 pizza with $2 delivery and $8 cost of production and $3 cost of delivery in range. Each hand picked up pizza makes $2 profit, each pizza delivered makes $1, but if the amount of net new orders from doing delivery is >2x the amount of people that switch from pickup to delivery then the business profits.
In the app case, the business may still benefit (except now the apps have pressure to try extract discounts from the business), but that -$1 for delivery is either being subsidised by VC funding which won't last, or by paying the delivery staff less than their real costs.
a) traditionally, the delivery driver keeps the entire tip in cash. there's no bullshit "delivery fees" added to an order which actually don't go to the driver.
b) it used to be a lot less costly to operate a basic car in the US/Canada on a dollar per mile or km basis
To point A, delivery fees have been around for a while and have never gone to the driver. Is there some app or scenario in which the driver doesn't keep the entire tip? Because I'm not aware of any.
To point B, how is this tech-specific? The question was about why someone driving their car to deliver for Domino's is OK but driving their car to deliver for DoorDash is exploitation.
point A, app based food delivery services with "delivery fee" charged to the customer and not passed on to the driver is a new thing.
15 or 20 years ago if you order a pizza from your local pizza place, the price you pay for the pizza is fixed and known, and you tip the driver in cash. there's no extra 3rd charge line item for "delivery" anywhere.
point B, the advent of app based food delivery in the past 8 years happens to coincide with greatly increased cost of operating the car. I was explaining why traditional method of delivery used to be much more economically viable. Two things happening simultaneously, increase in cost of fuel and operating cars and the increased popularity of app based food delivery does not mean correlation equals causation.
tips weren't that good back in the older days. most people only tipped a $1 if anything and thought the delivery fee went to the driver which in a way it did because they usually got paid hourly plus a small fee.
I'm guessing at least part of the reason is that old school delivery driving doesn't have to be profitable, only the whole business does. If you have a healthy margin per pizza, that margin can subsidise the loss made per delivery. You just have to make sure that the profit from the increased number of pizzas sold makes up for the cost of delivery and you're good.
Food delivery services, on the other hand, have to make the delivery itself not only profitable, but profitable enough to produce a somewhat livable wage for the driver once expenses like gas and car wear are accounted for, and the whole company has to live off of whatever it can siphon off from what the drivers get.
$300,000,000 in investor money to earn back, software people earning $300,000/year, managers for them, etc. Divided amongst a lot of premises, yes, but still expensive. Instead of just a couple guys answering a phone.
There weren't any significant problems with the legacy model. Pizza delivery staff didn't try to talk you into accepting a cheese pizza instead of pepperoni. They didn't lie about their credit card machine not working. They showed up just like the new services, and specifying the order in English usually also worked well. Which were all problems with taxis pre-Uber.
Pickup customers subsidized the cost of delivery. drivers earned money folding boxes, delivering flyers other prep work. and drivers would take upto 4 orders at a time.
> Why is it now "bad" when a tech company does it? The scale?
I think it's because of how badly they're doing it. They're operating at a significant loss, with unhappy customers, unhappy drivers, unhappy restaurants, and poor service.
