Yep before door dash we never had the information that Americans were fat lazy bastards. Having that knowledge is easily worth 50 billion.
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Yeah. Theres a couple of unclear steps.
Have data
???
Profit!
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I agree that data folks tend to see potential value in every vast data set, and it’s not always there. But a lot of people make a lot of money selling junk to Americans by capitalizing on the fact that they are fat lazy bastards. Because Americans waste a lot of money, and insight that sellers have that gets them to waste even 1% more is going to have some (highly uncertain) value. That’s the theory, or at least that’s the snake oil salesman pitch.
I think this is a common pitfall with the modern tech companies. They reinvent a thing that doesn’t have to be reinvented (like food delivery) for some vague promise of a future “data driven insight” that makes it all worthwhile. I think that a lot of those false promises have been bought hook line and sinker by investors. And when companies like Door Dash incinerate all that up front investor cash, they can create impressive looking results. Door Dash and Uber Eats have flashy ad campaigns, and when you are just spending capital you can “grow your business” a lot by doing a lot of stuff at a loss.
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That’s exactly it, a lot of the “tech companies” actual value proposition tends to collapse when challenged. Much of the start up industry now is a huge pools of capital chasing increasingly less compelling value propositions.
It’s not at all clear to me why having an edge in an inherently unprofitable business is good. Like, look at this recent analyst blurb.
That third bullet point is complete nonsense.
It’s kozmo.com all over again.
Doesn’t my bank / credit card already know what restaurants I order from and when? Is it that much more valuable if DASH has the itemized order in their records somewhere?
We used lieferando a lot when we lived in Berlin, but in USA I use DASH or UberEats a few times and decided it sucks. The markup is way higher, the expected tip is wayy higher, the service is slower. I either order directly from local restaurants that offer delivery or pick up myself.
This totally seems like the type of service consumers will realize they can live without as disposable income shrinks.
I think the difference with DASH is that they also are able to test offering you additional products from other vendors and see what add ons you buy and stuff like that. It’s not a big difference but it’s a subtle difference. They can get to you before you click the button to submit your final order, and the bank only sees what happens after the fact. It’s a more passive role.
Anyway, I don’t really think they’re likely to succeed at any of this. I am not surprised that food delivery in the US sucks compared to Europe. American cities aren’t designed for food delivery, they’re zoned so that in many cases restaurants are far from homes because they’re not allowed to be close together. It’s really hard to do food delivery in that environment.
Potentially, that granular info is valuable for the business of consulting with restaurants on menu construction. I’m not sure the typical mom and pop would be too interested in having that data, but for large restaurant groups and ghost kitchens knowing how successful certain items are for other restaurants could help you decide if you should start offering it as well. Or knowing what things are commonly ordered together could help you fine tune your “meal deals” or other upsell campaigns.
Ah yes, the MoviePass business model.
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They would also have a lot of data on when people search for “sushi” and then click to a menu, look at it, but then don’t buy from it. Again, not obvious this all commercializes into Big Data Insights that are useful, but the idea of being the central hub between people ordering food and watching everything they do up to the point of ordering, and being able to interject yourself into the decision (they will ask you if you want the Dasher guy to stop at the corner store for ice cream after they pick up your pizza, basically the online delivery version of “do you want fries with that”) those are valid ideas. But hemorrhaging capital running an inefficient food home delivery model in cities that are downright hostile to integration of commercial and residential zones is probably not the best way to do it. Amazon barely makes relentless home delivery work and their products don’t generally deteriorate in quality during transit. If someone could lift out of the DASH model all the data aggregation and opportunity to make money by nudging peoples’ food order behavior then that would possibly be a winning business model.
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Online retailers have been quietly doing this for years. Ever had to return a spoiled food item that you purchased through curbside pickup from target? I’ve never had them ask for it back, they just process the return. Amazon also frequently does this but if you return too much then they make you send it back.
Most of the crap we return is just thrown away or auctioned. A mockery of capitalism almost.
We got a decently expensive end table (around $700) delivered and it had a bit of minor damage. Could have been fixed pretty easily if you know what you’re doing. We requested a replacement, and they didn’t bother to pick up the broken one - all we had to do was send a picture showing the damage, but could have faked it pretty easily. Ended up selling the damaged one for $100 on NextDoor (sold pretty fast so might have underpriced it). Could probably do stuff like this with regularity if you have no morals.
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I hear this Tesla company is doing interesting things.
“No Morals” should be a new college major if we actually want new grads to land living wage jobs now
I think that’s just law school.
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I work for a furniture e-commerce company
You’ll get flagged to the fraud team through data science scam models pretty quickly (obviously if you do it once or twice per company you might be ok, especially if you have other non-returns history)
Depending on how much it costs us to process the return we will just let you keep it. There are many cases where it would be actively stupid not even taking into account customer good will to take an item back. e.g. my bread box had a cracked front window. Not worth it to our supplier to repair and sell refurbished, so we just ship a new one and eat the cost instead of eating up worker time and warehouse space processing your return for something that’s going to get pitched in the trash anyways.
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Doordash brings in money because restaurants and merchants are willing to pay them directly as they find that method a more profitable option.
Buying dash is basically betting that those costs that those merchants are willing to pay as opposed the costs associated with B@M operations will continue to separate given specifically dash a head start. I mean, walmart doesn’t want to operate every store and have their underwear locked up, they’d prefer to close up if they could.
I’m not advocating buying the stock, but I’d keep them on my radar if the thit hits the fan and they are still around. Things are slightly different when they are valued at 22B as opposed to 100B.