Arbitrage. With Pizzas!
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Doordash reportedly lost an insane $450 million off $900 million in revenue in 2019 (which does make me wonder if my dream of a decentralized network of pizza arbitrageurs does exist).
Uber Eats is Uber's "most profitable division” 😂😂. Uber Eats lost $461 million in Q4 2019 off of revenue of $734 million. Sometimes I need to write this out to remind myself. Uber Eats spent $1.2 billion to make $734 million. In one quarter.
(...)
As this conflict comes to a boil, one thing is becoming clear: there are no winners in this fight.
Restaurant owners are losing money. Diners are seeing their costs raised, either by delivery companies that need to pay delivery drivers or by the restaurant owners who raise prices to offset delivery fees. And delivery drivers still make low, unpredictable wages frequently with no benefits.
The real late stage capitalism.
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@Gąska They missed the one winner in all this: the credit card companies.
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@Unperverted-Vixen And PayPal. Don't forget PayPal, the ugly cousin of credit card companies, with business practices nearly as unethical as those of Doordash and Yelp.
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In the comments:
Danny Sullivan May 18
I work on the Google Search team. We understand the concern about unauthorized order links. That's why we remove any order links from Google business profiles if a business reports there's no authorized relationship. They can do that following the instructions in our help page about order links here: https://support.google.com/business/answer/9503613
SM May 18
Hi Danny, I operate the stop sex offenders network. We put any name we can find on our list of sex offenders. I see you're on our list. If you have any complaints you can file a complaint via form A9874B, but make sure to also have form 5465DF8 with you, you can find a more detailed FAQ on our website, we're always happy to help if there's been a mistake!
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@Gąska more like "the real California's idea of making money",everything being based on "valuation", and thus trading the idea of (future) profit, instead of actual profit.
we in europe still mostly try to make actual money.
(edit: i never understood how californians do it, until i watched Silicon Valley, and then it started to make perfect sense.)
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@sh_code the problem is that so many people made so much money they can't find enough worthwhile things to invest in.
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@sh_code said in Arbitrage. With Pizzas!:
more like "the real California's idea of making money",everything being based on "valuation", and thus trading the idea of (future) profit, instead of actual profit
It makes sense in monopolistic markets.
Imagine you have a kind of product (for example, social networks). And you make the assumption that for that kind of product, there can only be one "winner" company, i.e. once any company gets >90% of users, almost no one will switch to a different one, regardless of quality.If that holds true, the best strategy is to invest a huge amount of money to capture the users before your competitors do.
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@Zecc said in Arbitrage. With Pizzas!:
In the comments:
Danny Sullivan May 18
...I didn't know who this was, but after reading some of the comments I looked him up. Danny Sullivan is the (Figure)Head of Google Search PR, after having been a search reporter and SEO/marketing guru type for many years going back to before Google. If you can't make any sense of 'em, join 'em?
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This post is deleted!
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I love Matt Levine's writing on finance. From his daily roundup where he covered this:
If restaurants and drivers complained about DoorDash but DoorDash was raking in juicy profits, you could be like “what do you want, innovate or die, the market has spoken.” But in fact restaurants and drivers complain about DoorDash, and it lost $450 million in 2019 on about $1 billion of revenue. Arguably the market has spoken and said “stop it, come on, this is dumb.”
In the old economy of price signals, you tried to build a product that people would want, and the way you knew it worked is that people would pay you more than it cost. You were adding value to the world, and you could tell because you made money. In the new economy of user growth, you don’t have to worry about making a product that people want because you can just pay them to use it, so you might end up with companies losing money to give people things that they don’t want and driving out the things they do want.
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@pcooper said in Arbitrage. With Pizzas!:
In the new economy of user growth, you don’t have to worry about making a product that people want because you can just pay them to use it, so you might end up with companies losing money to give people things that they don’t want and driving out the things they do want.
The upside is that VCs are losing money and directly paying for our pizzas.
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@Gąska said in Arbitrage. With Pizzas!:
Doordash reportedly lost an insane $450 million off $900 million in revenue in 2019 (which does make me wonder if my dream of a decentralized network of pizza arbitrageurs does exist).
Uber Eats is Uber's "most profitable division” 😂😂. Uber Eats lost $461 million in Q4 2019 off of revenue of $734 million. Sometimes I need to write this out to remind myself. Uber Eats spent $1.2 billion to make $734 million. In one quarter.
(...)
As this conflict comes to a boil, one thing is becoming clear: there are no winners in this fight.
Restaurant owners are losing money. Diners are seeing their costs raised, either by delivery companies that need to pay delivery drivers or by the restaurant owners who raise prices to offset delivery fees. And delivery drivers still make low, unpredictable wages frequently with no benefits.
The real late stage capitalism.
You're getting close.
So how much of this shit is actually out there? The central bank rates provide a clue: medium term they approximate the average rate of profit.
What are the common central bank rates these days?
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@anonymous234 said in Arbitrage. With Pizzas!:
VCsVarious veteran pension funds are losing money and directly paying for our pizzas.
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I clicked on this thread hoping for free pizzas. How do I get free pizza?
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The government is denying you free pizza.
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It's used to subsidize an untenable customer expectation. You leverage a broken workforce to minimize your genuine labor expenses. The companies unload their capital cannons on customer acquisition, while this week’s Uber-Grubhub news reminds us, the only viable endgame is a promise of monopoly concentration and increased prices.
Ah yeah, the good old free market that creates competition, but really all of these shit companies‘ premise is
disruptioncreating a monopoly.
This one is comparatively mild on the evil scale, though, the google hijacking is somewhere between shady to maybe fraudulent. In contrast, UBER is actively breaking the law by operating illegally in a host of jurisdictions (since not breaking the law doesn’t give you a competitive edge) with all kinds of excuses that they’re “ride sharing” instead of a taxi company or that their employees aren’t employed.I can only hope these bastards die and sink their VC capital with them instead of succeeding with their power grab plans, but I’m not optimistic.
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@topspin The thing with Uber is that yeah they're shits (although what big company isn't) but if you're somewhere that they operate it's hella convenient to get a taxi.
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@topspin said in Arbitrage. With Pizzas!:
by operating illegally in a host of jurisdictions (since not breaking the law doesn’t give you a competitive edge)
So, here's the thing.
In those places, taxi companies have been given a government monopoly, realizing that public access to point-to-point transportation without owning your own car is a public good. To support this, each taxi is backed by a medallion issued by the local authority. This was intended to support two different goals:
- With a limited number of medallions, the number of taxis would be limited as well, reducing congestion and allowing higher fares by promoting scarcity.
- The government retains the ability to revoke the medallion if the taxi driver screws up too badly, ensuring that the driver has some "skin in the game" and is incentivized to drive well and provide a good customer experience.
How that plays out in practice is:
- Medallions, as a scarce resource, have become investments. Some are worth hundreds of thousands or even millions of dollars, per cab on the road. Investors "rent" them to companies and/or drivers for a daily fee (generating additional income for the investor), meaning each day a taxi driver starts out way in the hole and has to dig themself out.
- Because taxi drivers start way in the hole, they have to look toward juicing revenue. So, taxis are incentivized to go where there are large congregations of potential riders, and ignore (or at least defer) other pickups. Thus, large ridership areas are actually more congested, and small ridership areas don't get the benefit of the bargain. There's also no incentive to actually make a good in-car experience, since either tips are already screwed or tips are already part of the receipt, so they can do things like speed, drive aggressively, and have massive ear-piercingly loud video ads mounted to the passenger headrest. (Though that last one is starting to creep into Uber rides too...)
- Because medallions are investment vehicles, there's a strong incentive not to revoke them because -- despite the fact that the authority can revoke any medallion at any time for any legitimate reason -- it'll trigger lawsuits by rich people with rich lawyers who'll bog the authority's attorneys in paperwork. That's assuming riders actually make a complaint and can identify the license the badness occurred under. This further removes any incentive to drive safely or provide good service. And even then, the actual driver is usually just out the day's pay, and can easily glom onto some other medallion through some other chain of custody.
Uber is breaking the law because they're not spending tens of millions of dollars on medallions and branding and so on that doesn't actually do what the law intended. Instead, they have reasonably effective radio dispatch, broad coverage, a much more effective and transparent dispute resolution system (not that it is objectively effective or transparent, just more so than the taxi shitshow), lower barriers to entry for drivers, and (usually) a better in-vehicle experience.
You're right, the end goal is to create a monopoly so they can start charging riders crazy amounts and paying drivers a pittance. But at least right now they're doing a far better job than the government-protected-and-sanctioned monopoly or oligopoly of the taxi system.
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@topspin I'm with you, especially if you throw in those idiotic "throw rent-a-scooters on city sidewalks" companies.
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@TwelveBaud Limited medallions/licensing/etc. can definitely be a problem, I just wonder how many cities/metro areas have it. They don't seem to be scarce around here, FWIW. (You can apply online for one for about $150.)
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@Parody Look for the places where Uber (and Lyft and...) has been wildly successful. They were the ones where prices were held artificially high, generally by some sort of regulatory capture. Other parts of the world had less of a problem, and Uber has made much slower progress (if at all) there.
The equivalent of medallions here mentions (required by primary legislation) both the identity of the vehicle and the driver. It isn't transferable at all, and so isn't a good general investment. It's also not expensive to get a new one if safety check paperwork is there (required for both, alas; this is the bit Uber hates).
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@dkf said in Arbitrage. With Pizzas!:
@Parody Look for the places where Uber (and Lyft and...) has been wildly successful. ...
I assumed a few of the largest metro areas (I mean, I've read about how these companies have fared in New York, London, and cities in and the state of California) but after that I'd expect judging their successes to be muddier. It doesn't help that they lose billions of dollars a year and are making it up in volume.
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@TwelveBaud as I've mentioned, UBER has been declared to operate illegally in several jurisdictions, so it's not just the US I'm talking about.
I'm not even sure how the "medallion" part translates, but I doubt the rest of the world has the exact same rules. Some similarities perhaps, but the one general thing in common that UBER has problems with is that the taxi business is regulated and they make it their business practice to not obey the regulations. There are certainly regulations here for driving a taxi, you need a passenger transport license, passenger insurance, all that stuff. If you want to operate a taxi service, you need to operate a taxi service. "Ride sharing" apps are certainly a thing, but it's not what UBER is doing. Or whatever else they're currently trying to not be classified a taxi service.I've never personally ran into any of the problems you describe, maybe it's just your taxis that are terrible.
You can certainly argue whether specific regulations are good or what parts of them can be improved. Nothing is perfect. But that is entirely beside the point. You can't just say "well, I don't like these regulations, business would be cheaper without them". That's what UBER is doing / trying to do. This isn't some civil disobedience or revolt or something, just because from their point of view the law sucks doesn't mean they can just break it.
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@topspin said in Arbitrage. With Pizzas!:
I'm not even sure how the "medallion" part translates, but I doubt the rest of the world has the exact same rules
I've never even heard of the system outside of New York.
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@topspin said in Arbitrage. With Pizzas!:
In contrast, UBER is actively breaking the law by operating illegally in a host of jurisdictions (since not breaking the law doesn’t give you a competitive edge) with all kinds of excuses that they’re “ride sharing” instead of a taxi company or that their employees aren’t employed.
I like to compare Uber to a Polish telecom Play. Both Uber and Play are in markets that used to have very high prices compared to quality of service, and were known for many abusive business practices (routinely taking longer road to destination so you pay more, hiding zillion hidden fees in very long contracts printed in tiny font). Both Uber and Play did something that wasn't possible for other companies - Uber openly broke the law in a way that registered business would be instantly caught with, and Play has made a deal with the government that every other telecom has to lend them their infrastructure free of charge.
Both of these were blatantly anti-competitive behaviors, but instead of monopoly, the result was drastic improvements in quality of service and lower prices offered by their competitors. Their cheating has healed the market. YMMV, though - in other countries it might've looked different.
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@topspin said in Arbitrage. With Pizzas!:
I've never personally ran into any of the problems you describe, maybe it's just your taxis that are terrible.
You can certainly argue whether specific regulations are good or what parts of them can be improved. Nothing is perfect. But that is entirely beside the point. You can't just say "well, I don't like these regulations, business would be cheaper without them". That's what UBER is doing / trying to do. This isn't some civil disobedience or revolt or something, just because from their point of view the law sucks doesn't mean they can just break it.I've never understood all of the hate for Uber (aside from crazy driverless stuff). Every time someone shits on them like this I like them a little bit more.
I used to live in DC and the cabs are fucking awful there. These days the only cab rides I take are to and from the airport, which is a short (and only a handful of times per year) trip for me so it's not a big deal.
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@boomzilla Part of why I'm loathing them is that they offload quite a bit of the costs onto their drivers. How many of those will (be able to) set aside the amount of money to offset, say, depreciation, maintenance and proper insurance?
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@boomzilla I actually like a suggestion about stuff like that: If you employ people you can get rid off at any time then you should be required to pay them more than a comparable permanent employee. Companies like Uber reduce their fares simply due to the fact that they can shift everything onto the driver without being required to compensate them properly for taking on more risk.
Also: You do know that we're not in the Garage, right? You always act so high and mighty at me but here you are, trolling. Bravo.
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@boomzilla said in Arbitrage. With Pizzas!:
I've never understood all of the hate for Uber (aside from crazy driverless stuff).
What part of "they're willfully breaking the law" is hard to understand?
Just looked up the "situation in Germany" on Wikipedia: they stopped "UberPop" after courts decided in 2015 that their drivers were operating illegally without a license. In late 2019 courts decided that "UberX" is anti-competitive and ordered an injunction, which they are currently defending against by arguing it needs to be sent to their Amsterdam HQ and since it's written in German they can't read it. The fucking jokers.
They seem to have well cleaned up the Wikipedia site though (note the "A major contributor to this article appears to have a close connection with its subject" tag). It used to show something like a list / map where UBER operates and where it does so illegally or with court cases still ongoing, now it only has a list of "criticism" anymore.
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@topspin I've found an article that they're now successfully banned from operating in Germany.
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@boomzilla said in Arbitrage. With Pizzas!:
@topspin said in Arbitrage. With Pizzas!:
I've never personally ran into any of the problems you describe, maybe it's just your taxis that are terrible.
You can certainly argue whether specific regulations are good or what parts of them can be improved. Nothing is perfect. But that is entirely beside the point. You can't just say "well, I don't like these regulations, business would be cheaper without them". That's what UBER is doing / trying to do. This isn't some civil disobedience or revolt or something, just because from their point of view the law sucks doesn't mean they can just break it.I've never understood all of the hate for Uber (aside from crazy driverless stuff).
Some people really don't like foreign companies blatantly ignoring local laws and getting away with it. Some are just racist (most Uber drivers in Poland are Ukrainian).
@Rhywden said in Arbitrage. With Pizzas!:
Companies like Uber reduce their fares simply due to the fact that they can shift everything onto the driver without being required to compensate them properly for taking on more risk.
That, but also by not bumping prices by 250% when the customer speaks English, and not taking the longest route to destination (Uber charges based on initial distance calculated on map, while regular taxis charge per actual distance driven).
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@Gąska said in Arbitrage. With Pizzas!:
That, but also by not bumping prices by 250% when the customer speaks English, and not taking the longest route to destination (Uber charges based on initial distance calculated on map, while regular taxis charge per actual distance driven).
That's not a problem we have in Germany. Drivers would lose their license very fast if they tried to do that - the rates cannot be changed and as far as I know, there are "secret shoppers" around.
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@Rhywden said in Arbitrage. With Pizzas!:
more risk.
Also: You do know that we're not in the Garage, right? You always act so high and mighty at me but here you are, trolling. Bravo.I have no idea what you're talking about here.
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@topspin said in Arbitrage. With Pizzas!:
@boomzilla said in Arbitrage. With Pizzas!:
I've never understood all of the hate for Uber (aside from crazy driverless stuff).
What part of "they're willfully breaking the law" is hard to understand?
The law is a ass. There are lots of retarded licensing laws designed to stifle competition.
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@boomzilla said in Arbitrage. With Pizzas!:
@Rhywden said in Arbitrage. With Pizzas!:
more risk.
Also: You do know that we're not in the Garage, right? You always act so high and mighty at me but here you are, trolling. Bravo.I have no idea what you're talking about here.
Riiiight. Then don't respond with "
"Either discuss the points given or simply don't respond at all.
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@boomzilla Yes, because monopolies are sooo much better.
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@boomzilla said in Arbitrage. With Pizzas!:
@topspin said in Arbitrage. With Pizzas!:
@boomzilla said in Arbitrage. With Pizzas!:
I've never understood all of the hate for Uber (aside from crazy driverless stuff).
What part of "they're willfully breaking the law" is hard to understand?
The law is a ass. There are lots of retarded licensing laws designed to stifle competition.
Then maybe change your laws if you don't like them.
As mentioned twice, they're breaking the law in many places, with presumably different laws.I can't decide I don't like paying taxes and stop doing it, either.
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@topspin said in Arbitrage. With Pizzas!:
@boomzilla said in Arbitrage. With Pizzas!:
@topspin said in Arbitrage. With Pizzas!:
@boomzilla said in Arbitrage. With Pizzas!:
I've never understood all of the hate for Uber (aside from crazy driverless stuff).
What part of "they're willfully breaking the law" is hard to understand?
The law is a ass. There are lots of retarded licensing laws designed to stifle competition.
Then maybe change your laws if you don't like them.
When was the last time you've seen people successfully removing a law they don't like?
@topspin said in Arbitrage. With Pizzas!:
I can't decide I don't like paying taxes and stop doing it, either.
You're on the wrong side of Oder
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@Rhywden said in Arbitrage. With Pizzas!:
@boomzilla said in Arbitrage. With Pizzas!:
@Rhywden said in Arbitrage. With Pizzas!:
more risk.
Also: You do know that we're not in the Garage, right? You always act so high and mighty at me but here you are, trolling. Bravo.I have no idea what you're talking about here.
Riiiight. Then don't respond with "
"Either discuss the points given or simply don't respond at all.
Stop whining.
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@Rhywden said in Arbitrage. With Pizzas!:
@boomzilla Yes, because monopolies are sooo much better.
TDEMSYR. Seriously. I'm not the one arguing in favor of reduced competition here.
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@Gąska laws get changed all the time. So I could probably just look into the official registry and point at that, but
.@Gąska said in Arbitrage. With Pizzas!:
I can't decide I don't like paying taxes and stop doing it, either.
You're on the wrong side of Oder
Luckily, so is my car.
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@topspin said in Arbitrage. With Pizzas!:
@boomzilla said in Arbitrage. With Pizzas!:
@topspin said in Arbitrage. With Pizzas!:
@boomzilla said in Arbitrage. With Pizzas!:
I've never understood all of the hate for Uber (aside from crazy driverless stuff).
What part of "they're willfully breaking the law" is hard to understand?
The law is a ass. There are lots of retarded licensing laws designed to stifle competition.
Then maybe change your laws if you don't like them.
As mentioned twice, they're breaking the law in many places, with presumably different laws.Yes, I'd like to see that. Also a lot of this stuff is very subjective, like determining who is or isn't an independent contractor vs an employee.
I can't decide I don't like paying taxes and stop doing it, either.
But if it's an unjust tax (or any other law) I shouldn't hate people for just following orders and going along with them, either. I'm not trying to be just a cheerleader for lawbreaking. I'm just not a cheerleader for mindless legalism.
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@boomzilla said in Arbitrage. With Pizzas!:
I've never understood all of the hate for Uber
For me, there are three things.
One, there was the sleaziness of the corporate leadership. I forget the details, but either sexual discrimination or sexual assault, or something like that. That presumably was fixed through the resignation and replacement of said leadership.
Second is their flagrant violation of the law. It's not just trying to skirt them or squeeze through loopholes. They know they're breaking the law. It's a fundamental part of their business strategy. Their app includes algorithms to identify riders they think are government inspectors and deny them rides. Lyft may be violating the same laws, but AFAIK are not as blatant about it.
Third, the way they treat their drivers. The way companies treat their employees/contractors has gotten more important to me. For example, I also won't do business with companies that make their employees pee in bottles because they don't have time to go to the restroom.
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@boomzilla said in Arbitrage. With Pizzas!:
The law is a ass. There are lots of retarded licensing laws
Sure. So get the laws changed. Or engage in civil disobedience, knowing and prepared to face the consequences. But you can't just say, "I don't like that law, so I'm going to ignore it." That makes you a criminal, which Uber is.
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@boomzilla said in Arbitrage. With Pizzas!:
But if it's an unjust tax (or any other law) I shouldn't hate people for just following orders and going along with them, either. I'm not trying to be just a cheerleader for lawbreaking. I'm just not a cheerleader for mindless legalism.
The fact that they operate like this systematically in the face of different jurisdictions doesn't exactly color them as a heroic vigilante but simply as a criminal.
And I especially don't like one thing @Gąska mentioned (if it's happening): the getting away with it. If, at some point, they've established enough dominance and crushed enough competition with their unfair advantages and then turn to operating legally afterwards (because they no longer need the competitive edge of, e.g., drivers operating without a license or insurance), I still won't like them because they've gotten there through ill means.
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@HardwareGeek said in Arbitrage. With Pizzas!:
Third, the way they treat their drivers. The way companies treat their employees/contractors has gotten more important to me. For example, I also won't do business with companies that make their employees pee in bottles because they don't have time to go to the restroom.
My wife drove for Uber for a while. She eventually quit because in order to make money she had to go into DC and dealing with Georgetown assholes was just too much for her.
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@topspin said in Arbitrage. With Pizzas!:
@boomzilla said in Arbitrage. With Pizzas!:
But if it's an unjust tax (or any other law) I shouldn't hate people for just following orders and going along with them, either. I'm not trying to be just a cheerleader for lawbreaking. I'm just not a cheerleader for mindless legalism.
The fact that they operate like this systematically in the face of different jurisdictions doesn't exactly color them as a heroic vigilante but simply as a criminal.
And I especially don't like one thing @Gąska mentioned (if it's happening): the getting away with it. If, at some point, they've established enough dominance and crushed enough competition with their unfair advantages and then turn to operating legally afterwards (because they no longer need the competitive edge of, e.g., drivers operating without a license or insurance), I still won't like them because they've gotten there through ill means.
I can't speak for Poland, but in the US my wife had to provide proof of insurance and license, plus go through a background check. It's illegal to drive on the road like that, period, and that's the driver breaking the law.
Bah. They provide a valuable service for which people willingly pay. I'll grant that there are jurisdictions that have laws that make it illegal and they probably shouldn't operate there, especially with such crazy attitudes like yours about people making voluntary trades over egregious laws (which I'm sure you think my attitude is just as crazy as you think mine is, but eh?).
Doordash and Pizza Arbitrage
. Oh, and 
