Food

The Price of On-Demand
Brittany Ladin

From merchandise to taxis to clothing and food, there is almost nothing that cannot be ordered through the iPhone. Companies such as Uber, Lyft, PostMates and DoorDash are among the leading on-demand service apps available today. In our ever-increasingly busy lives, the instantaneous ordering of different services can seem affordable and time-saving, especially for urban college students at a school like USF. However, what many people fail to recognize are the negative consequences that come along with these services, and how on-demand apps are affecting the community, economy, and how we view service.

CB insights described the food delivery market as “overcrowded” in a recent November 2015 article, and stated that today one-third of all US-based food delivery companies received their first round of funding in just the past year. Furthermore 25 US-based companies are using the same two business models -- delivering “cooking boxes” or prepared meals. CB Insights created a graphic using their research to display the chronological similarity between the most popular food-delivery services.

Bloomberg Business has described food delivery companies as “attractive acquisition targets”, naming Sequoia Capital as one of the leading investors in these companies. As food-delivery apps are passing billion dollar values, some, such as DoorDash, are continuing forth in their expansion unfavorably. DoorDash, currently valued at over $600 million, is facing a lawsuit issued by In-N-Out for delivering their food and using their trademark without any form of agreement with the company.

Many people do not realize the price difference between using an instant-delivery app and shopping for themselves. A recent New York Times article pointed out some of the complex fees added to instant-delivery services, such as fluctuating delivery fees, required memberships, or automatic tips.  According to Forbes, it is because the company is only making profit through the delivery fees. As a low-budget college student, I believe I can fairly say that luxury comes with a price, and often times the price for on-demand service outweighs the benefits of convenience.

It is important for the demographics that these delivery services are targeting to recognize the positive and negative aspects of their purchases. These San Francisco delivery apps are often used by young adults and college students due to their connections with technology and on-demand services. However, these demographics are the ones that should be investigating what they are paying for and watching their money. It is important for consumers to question quality, price, and need vs. desire as the on-demand delivery industry continues to expand and thrive.

http://www.bloomberg.com/news/articles/2015-11-23/in-overcrowded-food-delivery-market-venture-capitalists-are-still-hungry-for-more


https://www.cbinsights.com/blog/food-delivery-startups-crowded-market/
 

Aggregated News Topic: Food

Specific: Food Delivery Services in SF

"In 'Overcrowded' Food Delivery Market, Venture Capitalists Are Still Hungry for More" - Bloomberg Business

http://www.bloomberg.com/news/articles/2015-11-23/in-overcrowded-food-delivery-market-venture-capitalists-are-still-hungry-for-more

Key Points: 

• "1/3 of all US food delivery services raised first round of funding in past year"
• "Food delivery companies have been attractive acquisition targets"
• DoorDash will accept orders from restaurants that it does not have an agreement with -- i.e.        In N Out
• Companies valued at hundreds of millions of dollars 

"DoorDash Is Gearing Up To Dash Past The Billion Dollar Milestone"

https://www.hungryforever.com/doordash-is-gearing-up-to-dash-past-the-billion-dollar-milestone/

Key Points:

• 8 months ago DoorDash collected $40million from venture capitalists
• Company valued at $600 million
• Sequoia Capital said to lead new investment for company
• In N Out  lawsuit

"Your Pizza's Cold? Blame Your Food App -- Not Your Courier" - Backchannel

https://medium.com/backchannel/your-pizza-s-cold-blame-your-food-app-not-your-courier-9d1d123ad2e8#.jc43jvt6a

Key Points:

• Postmates and DoorDash algorithms do not take couriers into account 
• Some impossible deliveries with distance and SF hills
• Hourly pay is unpredictable
• "Given that these companies can't deliver food without us couriers, it's remarkable how unfinished their support services are"
• **In Comments section, two people asked the author to look into being a courier for their companies: SimpliRoute and Caviar

"The High Price of Delivery App Convenience" - The New York Times

http://www.nytimes.com/2015/11/05/technology/personaltech/the-high-price-of-delivery-app-convenience.html?_r=0

Key Points:

• Smartphone is almost "magic remote control"
• Fees are complex and often unnoticed by consumers 
• Instacart "worst offender in hiding extra costs in certain transactions"
• Many costs inflated by at least 20%
• UberEats -- food selection small, drivers may possibly just have large sums of the food ready while driving for anyone who orders
• Couriers and people running apps are humans prone to error -- pricing, delivery, ordering, etc.

Its a risk you're willing to take.

Rebekah Boon

Ever wanted meals from your favourite fancy restaurant down the street that does not provide delivery services? Ever had meals delivered to your doorstep that were cold? Or maybe you had food poisoning from one of your recent take out meal?

These are some of the ups and downs of using that food delivery app you have on your smartphone. Postmates and Doordash are just two of the many food delivery app services that are growing rapidly. Both apps have a net worth of almost half a billion dollars. There doesn’t seem to be a reason why one shouldn’t have such a convenient app on their phones, or is there?

Sure, now you can have your meals in your pajamas on your cozy sofa, tucked in while watching netflix--you can decide where you’d like to order from and not be confined to certain restaurants within a mile or two. However, when you order from Postmates or Doordash, you’re ordering products at your own risk.

 "What if someone gets food poisoning?" Meinert asks. "Who's responsible? Postmates takes away our quality control, and potentially endangers our customers." (David Meinert, the general manager at Lost Lake cafe tested out the system by ordering through Postmates one day. He alleges the food arrived in the back seat with a dog.) Based on the interview by Sarah Jones on “The Postmates Problem: Why Some Restaurants Are Forced to Fight the Delivery App”, there are reasons why some restaurants aren’t found on Eat24 or Grubhub. Store owners want to have quality control over their products, causing some to even refuse turning over their food to delivery services.

Whether you’re at a restaurant or ordering in, they prioritize the experience of their customers."A restaurant's reputation is critical to their success," WRA CEO Anthony Anton told Geekwire.

Anand Dass, Postmates’ director of business development, said that their main priority, however, isn’t the restaurant but the experience of their customers who are ordering food through them.

Meinert sent letters to politicians to draft legislation that forbids a third party from reselling a restaurant’s food without acknowledging them and receiving consent.

With Postmates, customers type in which restaurants they would like to order from and then the app service picks up orders from those restaurants. Often times, those restaurants will automatically be in the system without the consent of the restaurant. When Meinert realised this, he personally called postmates and asked them to take their restaurant off. Unfortunately, once someone searches for a restaurant, they are automatically recorded in the system and cannot be taken off.

Gabriella Mahady, 20, Media Studies major, said the first time she ordered from postmates was the last time she will order from them. “It’s not really a big deal but when I received my meal it was kinda cold. Like I said it wasn’t a big deal but it was a little upsetting,” she said.

It is a risk you’re willing to take, some food are just not made to be packed and eaten after an hour.