Doordash and Pizza Arbitrage (themargins.substack.com)

Article summary

The article discusses the business of food delivery, specifically the practice of DoorDash and other platforms scraping restaurant websites and offering delivery without the restaurant's consent. This can lead to problems such as cold food and incorrect prices. The author and a friend discovered that they could exploit this system by ordering pizzas through DoorDash at a lower price than the restaurant's listed price, with DoorDash paying the difference. This arbitrage opportunity highlights the inefficiencies and flaws in the food delivery platform business model.

Main themes

• Food delivery platforms
• Arbitrage and exploitation
• Unsustainable business models
• Treatment of drivers
• Restaurant fees and commissions
• Deceptive practices
• Vertical integration and sustainable models

What commenters say

• Some argue that DoorDash's tactics of falsely representing themselves as restaurants are unethical and potentially illegal.
• Others believe that exploiting the arbitrage opportunity is a form of fraud and should not be done.
• The high fees charged by food delivery platforms, such as 30-40% of the order total, are seen as a major problem for restaurants.
• Some commenters think that the business model of food delivery platforms is unsustainable and only exists due to large amounts of venture capital funding.
• There are concerns about the treatment of delivery drivers, who are often classified as independent contractors and may not earn a living wage.
• Some argue that the focus on growth and customer acquisition has led to a lack of attention to the actual needs and experiences of restaurants and drivers.
• The use of fake phone numbers and other deceptive practices by food delivery platforms is seen as a major issue.
• Some believe that the only viable business model for food delivery is one that is vertically integrated, such as Domino's, which controls the entire delivery process from start to finish.