I guess that’s slightly old news.
So much for the big giants making so much $ and gobbling up the little guys. It doesn’t say why they lose so much $ or did I miss it?
Same as Uber and Lyft. They’re spending massive amounts of capital trying to get a dominant position in the market.
Is this common in the beginning? Does it payoff?
You can see why they’re a necessary evil to restaurants - the fees are gouging but they get way more action than having one overworked delivery person. It’s a dilemma.
Common in shell games and pyramid schemes. It only pays off for the executives who abscond with millions in pay and stock that they cash out on before the company tanks.
There’s also some thought along the school of dominating the market completely by causing your competitors to go bankrupt because you’re selling at under market prices that are funded by investor money. Then once you own the market and have no competitors, you jack up the rates to where you can actually be obscenely profitable since there is now no competition. There’s been regulation against those tactics for specific products, harder for an entire industry. I’ll leave it up to you to judge the ethics of that tactic.
Historically companies do not survive by running huge deficits every quarter with no history of making a profit. But the culture of the last two decades is coming up with a novel concept that is appealing to investors, hype it like crazy then cash out.
Too many people are chasing the next Amazon.
Ahhh… I figured the CEOs and top people were paying themselves obscene salaries which is part of the operating budget and the loss. But I was wondering how they get ahead and please the stockholders. Thanks for responding with your astute knowledge.
Update: they’re going to be losing even more money. The gouging has trickled down to the customer. We order delivery less and less lately - but sometimes you wanna’ sit on the couch watch the Lakers and have food delivered. Of course, it’s becoming harder to find a restaurant that delivers directly, so Postmates it is. They keep offering discount codes which we don’t use because I’m sure it comes out of the restaurants’ pocket not Postmates. But a lot of peeps are using them and the restaurants or Postmates or their new masters are responding by drastically reducing portion sizes. Twice we’ve used them in the last few weeks and both times the entrees were smaller & the sides were in smaller cups. And! one restaurant had a line to add an appreciation tip (which we did) that goes directly to the staff. We were still hungry and ended up making late night grilled cheese sandwiches. I don’t see this increasing biz.
If the discount code is not for a specific restaurant, I don’t think it affects what Postmates pays them.
I think it’s a general code. It may not affect the restaurants but something has changed. We felt ripped off the last couple of times.
Call the restaurant and complain.
Portion sizes are unchanged at the Chinese restaurant we’ve been getting delivery from occasionally, but they use Caviar (which is now DoorDash).
I don’t think to do it but really should.
Dudette, no delivery service has any influence on the portion sizes that a restaurant serves…
Also, if you aren’t happy with the service, Postmates is not the only game in town. To get the best value out of these services, it is best to shop around. Uber Eats, DoorDash, Grubhub.
Also, as @robert mentioned, those general discount codes are most likely funded by Postmates.
“Under Grubhub’s Supper for Support program terms and conditions, the fine print says that while restaurants must opt into the program, they also have to agree to fund the $10 discounts — or roughly 30 percent off the cost of one order if the customer just meets the $30 minimum. On top of that, they must allow Grubhub to charge them commission for the total cost of the order before the discount.”
Grubhub was doing just that. Maybe things have changed since they got called out?
Yeah, I’m learning this stuff from ya’ll and from what I’ve picked-up it seemed unlikely that Postmates (which I prefer to the others) or any of them are footing the promo bill. Also, I think it might be true that it’s the restaurants reducing portion size, but it’s probably a response to the fees they’re paying. But what irritated me was the two restaurants I mentioned are busy local chains, not struggling mom & pops.
On another note: I did see that the governor has restricted the delivery services from charging restaurants more than 15% during the shutdown. Better than a kick in the butt?
I just read the article. The Twitter post in the article clearly shows that the promo was opt-in. I don’t know why the author says the restaurant “must participate” in the first paragraph. That would be strange and would require a clause in the original agreement that any good counsel would advise removing.
Edit: After further digging, deeper in that agreement is this baffling sentence. Haha, Grubhub is the worst. “To opt out, first opt in, then we will send you the form to opt out.” WTF? How about I just don’t opt in?
Edit 2: OK. It is late. That clause I snipped is to back out if a restaurant has already opted in. So, again, the promo was opt in. No big deal.
Might? No, it’s definitely the restaurant. How would it be possible for the delivery service to dictate portion size to the restaurant? Do you think they are repackaging orders when the driver picks them up?
I think @TheCookie means the restaurant is reducing portions because of the delivery service fees. Like recosting their portions and serving less rather than raising prices
I think the big deal is having to choose whether to be part of the “promotion” and featured as a $10 off restaurant or not. That’s not a choice for some people but a necessity. So imo its predatory, forcing people to pay for exposure.
Ultimately, the $10 off $30 promo that Grubhub was running was mostly to benefit the platform; to boost platform-wide sales and help Grubhub gain market share and users. Thinking about it in that light, yes, I agree, it was shitty of Grubhub. Grubhub hub should have at least said “We will match your promo spend $1:$1.”