Uber’s Restaurant Empire(bloomberg.com)
bloomberg.com
Uber’s Restaurant Empire
https://www.bloomberg.com/news/articles/2018-10-24/uber-s-secret-empire-of-virtual-restaurants
124 comments
In reflection, it’s a good idea. Consumer preferences are hard to gauge; there isn’t much of a feedback loop right now with restaurants beyond you either have business and are sustainable, or you don’t and lose it all. This is comparable to YouTube giving you different advertisements, but that these ads (restaurants) are really expensive to run and experiment with. Virtual restaurants essentially bring A/B testing from the digital realm to the physical one. They provide and shorten the feedback loop, lowering the cost of exploration by centralizing and by economies of scale; and resulting in greater exploitation (not in the economic sense but in the multi armed bandits framework).
Seamless had virtual restaurants at least 5 years ago. I remember in particular my wife liked to order burritos from a certain restaurant, named "Coastal" on the UWS. We tried visiting the restaurant based on the address, and found out that it was actually "Citrus", an upscale latin american place with an entirely different menu (that has since closed).
I used to live on the UWS and remember Citrus. Never encountered Coastal but do recall an eclectic menu. (No burritos though!)
I think this is pretty common across industries where a platform acts as an aggregator/marketplace. Case in point services like Amazon.com, Netflix have their own brands/content as well. Netflix is known for using data of people's content consumption to make new content. I think this makes sense for two reasons:-
- Tighter control over what you produce, so higher margins and potential differentiators(like the burger example in article).
- Acts as a defensible strategy for the aggregator if it can tie these brands with itself.
The only scary thing is when these marketplaces/aggregators just kill small businesses because of controlling the "storefront", discovery and leveraging economies of scale. Example search in Amazon: https://imgur.com/a/zHDueIk
- Tighter control over what you produce, so higher margins and potential differentiators(like the burger example in article).
- Acts as a defensible strategy for the aggregator if it can tie these brands with itself.
The only scary thing is when these marketplaces/aggregators just kill small businesses because of controlling the "storefront", discovery and leveraging economies of scale. Example search in Amazon: https://imgur.com/a/zHDueIk
In the case of "virtual restaurants", centralized, high volume kitchens are much more cost efficient - for example they can get salmon for $6/pound instead of the $9-$11/pound restaurants pay, and can save maybe up to 85% on labor.
So thinking that a small business could play in the "virtual restaurant" industry, is probably not realistic.
So thinking that a small business could play in the "virtual restaurant" industry, is probably not realistic.
But I think that's part of the barrier of entry for a small restaurant. I enjoy supporting local food trucks, and while the food is good, the workflow is terrible. If you look at a quick service restaurant as a logistics company, they are successful at getting completing the transaction and delivery quickly.
For a small restaurant to be successful, while quality is still a necessity, their pseudo "supply chain management" process needs to avoid as many bottlenecks as possible.
For a small restaurant to be successful, while quality is still a necessity, their pseudo "supply chain management" process needs to avoid as many bottlenecks as possible.
And yet, most of the centralised places have shut down. I'm thinking of Maple and others, which I enjoyed using in NYC, and yet they are gone now.
Since this new market is just being created, it makes sense that a lot of companies will be shut down, in that search for the best business model.
One possible guess is: in this very competitive market it's really hard/expensive to get new customers. But here, UBER had a big advantage.
Also, customers aren't loyal. But in the case of UBER, even if those customers change a virtual restaurant brand, they're very likely to stay in the UBER app, and UBER may have some power to guide them.
And if many "virtual restaurants" share the same highly-efficient commercial kitchen, and aggregate their orders from suppliers - they still get most of the efficiencies of a large commercial kitchen.
One possible guess is: in this very competitive market it's really hard/expensive to get new customers. But here, UBER had a big advantage.
Also, customers aren't loyal. But in the case of UBER, even if those customers change a virtual restaurant brand, they're very likely to stay in the UBER app, and UBER may have some power to guide them.
And if many "virtual restaurants" share the same highly-efficient commercial kitchen, and aggregate their orders from suppliers - they still get most of the efficiencies of a large commercial kitchen.
I think the main advantage of small restaurants is the labor advantage. Owner, family, friends are willing to work at ridiculously low (no) wages until there is a decent profit.
> I think this is pretty common across industries where a platform acts as an aggregator/marketplace. Case in point services like Amazon.com, Netflix have their own brands/content as well. Netflix is known for using data of people's content consumption to make new content. I think this makes sense for two reasons:-
In this case it's quite different, I believe, in that Uber will notice an underserved market and reach out to existing players/small business in that area to expand into that market. This sounds very different than Uber using their market knowledge to create a competitive advantage for themselves.
In this case it's quite different, I believe, in that Uber will notice an underserved market and reach out to existing players/small business in that area to expand into that market. This sounds very different than Uber using their market knowledge to create a competitive advantage for themselves.
This is just the cynic in me; but I think this is just for now, because it allows them to test these theories and ramp up faster. In the future Uber might just decide to go the Amazon way or just cut deals where they earn significantly higher margins compared to other restaurants.
I think that would be smart - I emailed a similar idea to a doordash recruiter a while back.
They should use the data from food delivery to find the most commonly requested items and then just have kitchens make “Amazon basic” versions with nice packaging/branding that undercut on price.
I think this could be a new type of fast food take over if done right.
They should use the data from food delivery to find the most commonly requested items and then just have kitchens make “Amazon basic” versions with nice packaging/branding that undercut on price.
I think this could be a new type of fast food take over if done right.
I doubt. Making food had nothing to do with their core business...
I'm still waiting for someone to figure out how to make "Etsy for food" work at scale. My guess if/when it happens it will look somewhat like what Uber has i.e. rent licensed "ghost kitchens" to small cooks by the hour and make all deliveries originating from those kitchens.
Seems that's already happening: https://www.theguardian.com/business/2017/oct/28/deliveroo-d...
Article lead: As appetite grows for upmarket takeaways, delivery service is setting restaurants up with satellite kitchens inside metal boxes.
Article lead: As appetite grows for upmarket takeaways, delivery service is setting restaurants up with satellite kitchens inside metal boxes.
This was tried most recently by Josephine (josephine.com) in the bay area. They ran up against laws that forbid selling food cooked at home.
I don't think it is a matter of figuring out but rather legislation.
I don't think it is a matter of figuring out but rather legislation.
I hope someone can figure out a model like Josephine had, I had some really tasty homecooked meals
Meals on wheels and similar meal services for elderly and disabled people have been around for years. The menus are usually home cooked style food. Some smaller ready to cook kitchens have been in my area for 10-15 years at least.
I understand you might have used homecooked to describe literally home cooked food but smaller mom and pop food prep places are really good. Personally I usually cook but a lot of friends use ready to cook places.
I understand you might have used homecooked to describe literally home cooked food but smaller mom and pop food prep places are really good. Personally I usually cook but a lot of friends use ready to cook places.
Interesting how when Uber and Airbnb did it they could bypass laws even with opposition.
I wonder what the difference was.
I wonder what the difference was.
Sounds like Cloud Kitchens is trying this model - https://www.cloudkitchens.com
That’s Gobble https://www.gobble.com
They’ve been around a long time
They’ve been around a long time
That sounds more like the ikea.com of food.
As I understand Etsy, you're ordering complete products
As I understand Etsy, you're ordering complete products
The IKEA of food would be:
"Hmmm... just finished following this freaking recipe to a TEE!... why do I have a slice of raw chicken and an egg left over?"
---
Joking aside, I have also looked into renting a commercial kitchen to TEST out the market to see if people would buy my wares.
The problem is that the commercial kitchens that I called at the time wanted too much financial commitment to use their space than seemed reasonable for me.
I wanted a commercial kitchen which I could rent for a few hours to do a large batch of Deviled Eggs so that I could sell fresh deviled eggs of my various recipes that people seem to really really love, but the pricing was too high.
They wanted in total, about $500 to use the kitchen, deposit, etc... I still have this idea to attempt it - maybe its time is now more affordable to test out.
"Hmmm... just finished following this freaking recipe to a TEE!... why do I have a slice of raw chicken and an egg left over?"
---
Joking aside, I have also looked into renting a commercial kitchen to TEST out the market to see if people would buy my wares.
The problem is that the commercial kitchens that I called at the time wanted too much financial commitment to use their space than seemed reasonable for me.
I wanted a commercial kitchen which I could rent for a few hours to do a large batch of Deviled Eggs so that I could sell fresh deviled eggs of my various recipes that people seem to really really love, but the pricing was too high.
They wanted in total, about $500 to use the kitchen, deposit, etc... I still have this idea to attempt it - maybe its time is now more affordable to test out.
Visit your local chamber of commerce. If local colleges have food programs, ask someone there. We have an organic farming coop here in the Seattle suburbs that lets you schedule time in their commercial kitchen.
Gobble went through various iterations/pivots in their seven years of existence. One of the iteration was an Etsy for food - which didn't work.
As you said, they are currently operating on the Ikea for food model.
As you said, they are currently operating on the Ikea for food model.
oh wow didn’t even see it’s different now. you have to cook! i don’t understand
this market. you pay for yourself to work. even 15 mins is enough that you’ll think, how often are you going to pay money again to make yourself work, again?
Op-ed from a former power user: Uber eats caters in part to the socially anxious and introverted demographic with moderate to high levels of disposable income. It pushes high margin, low-quality, foods at 2x or more pricing - particularly pizza, wings, chinese, and burgers. With some exceptions a large portion of these restaurants delivered already for lower prices, but with less convenience such as order tracking or ordering through an app. Over-time many "power users" of Uber eats and similar apps will regress to only a couple favored restaurants or stop using the app entirely. Uber eats will optimize for these power users to the detriment of non-chosen parties for the worst of the ecosystem as a whole.
> the socially anxious and introverted demographic with moderate to high levels of disposable income
I've began wondering if Silicon Valley is intentionally growing this demographic. If your customers need you because they are mentally unable to order food without you . . . well that's even better than a lifetime prescription of your medication or selling cigarettes.
It's twice as good if I can slowly train my customers to develop social anxiety by removing transactional interactions with minimum wage earners. That sort of interaction would traditionally service as a stepping stone in developing and maintaining social skills.
Add in social media which constantly has self-condemning memes about social anxiety, embarrassing moments, and so on; and you've got an extremely fertile ground for social anxiety.
I've began wondering if Silicon Valley is intentionally growing this demographic. If your customers need you because they are mentally unable to order food without you . . . well that's even better than a lifetime prescription of your medication or selling cigarettes.
It's twice as good if I can slowly train my customers to develop social anxiety by removing transactional interactions with minimum wage earners. That sort of interaction would traditionally service as a stepping stone in developing and maintaining social skills.
Add in social media which constantly has self-condemning memes about social anxiety, embarrassing moments, and so on; and you've got an extremely fertile ground for social anxiety.
I don’t know where this whole idea of minimum wage interactions being a stepping stone in developing social skills came from, because I don’t think these sort of rote, algorithmic interactions help anyone develop anything.
Football players train by dodging around predictable, stationary obstacles, even though on the field they'll need to dodge around unpredictable, moving obstacles.
Just because you need to use 6 skills at the same time in a real game, doesn't mean there's no value in an exercise that only develops 3 of the skills.
Just because you need to use 6 skills at the same time in a real game, doesn't mean there's no value in an exercise that only develops 3 of the skills.
I don't think it's intentional. I think it's due to aggressive hill-climbing optimization engine driving to the local minima of "increased engagement" of the hyper-engaged subset of populace - combined with the intensely myopic view of investors (as viewed from the incubated startup within a startup which it is).
I thought Black Mirror was supposed to be a cautionary tale, not a business plan.
Many of these stores have a counter or wall full of tablets - 1 for each delivery service. They have an Uber Eats tablet, a GrubHub tablet, DoorDash tablet, Bite Squad tablet, etc.
Maybe in SF. In the rest of USA is just Uber
GrubHub owned online delivery in Chicagoland five years before Uber was even founded, and still does a better job than UberEats.
I believe it also owns Seamless, and a couple of other services like Eat24.
I believe it also owns Seamless, and a couple of other services like Eat24.
Seamless / Grubhub was a relatively equal merger - they just use the Grubhub brand most places outside of NYC.
Uber isn’t even #1 in the space, let alone the only one.
In Boston, I've used Eat24, GrubHub, Doordash, but never Uber for food. I actually didn't realize how popular it was until this article.
Seattle, actually.
I’ve seen some restaurants with more than one tablet from the same delivery company. Couldn’t understand that, surely one tablet can handle multiple orders?
I stopped using it because the Uber drivers never get out of their car and come to your door (even if you mark this in the app).
I also had a driver drive close to my place and then steal the food - there was no ability for me to rate them and support was some call center that didn’t understand the issue.
DoorDash is a lot better.
I also had a driver drive close to my place and then steal the food - there was no ability for me to rate them and support was some call center that didn’t understand the issue.
DoorDash is a lot better.
I also had a driver drive close to my place and then steal the food - there was no ability for me to rate them and support was some call center that didn’t understand the issue.
Same here, although there's never been any problem getting a refund from Uber Eats in my experience.
My house is several miles out in the middle of nowhere. Someone went to the trouble of bringing my food within one block after a 15+ minute drive, and then they abruptly cancelled the order and disappeared from the map without a trace. I'll never figure out what the point of that was, but I hope they enjoyed my sushi.
Same here, although there's never been any problem getting a refund from Uber Eats in my experience.
My house is several miles out in the middle of nowhere. Someone went to the trouble of bringing my food within one block after a 15+ minute drive, and then they abruptly cancelled the order and disappeared from the map without a trace. I'll never figure out what the point of that was, but I hope they enjoyed my sushi.
Could it be they damaged your order en-route and preferred literally eating the cost of your delivery instead of taking the ratings hit?
At least I've never had a DoorDash driver cancel an order... I'd be pretty pissed if I had planned dinner for the family via delivery and gotten denied at the last minute.
At least I've never had a DoorDash driver cancel an order... I'd be pretty pissed if I had planned dinner for the family via delivery and gotten denied at the last minute.
Hard to say. They were driving very slowly through the neighborhood, not like they were likely to have hit anything or otherwise gotten into an accident.
It pushes for higher quality. It allows me to get food from real restaurants that didn't offer delivery otherwise. Same as sitting in.
That being said, I agreed that the margin is huge.
That being said, I agreed that the margin is huge.
That's deliveroo. Uber is rather your local mcdonald's. My experience is that the service of Uber eats is disastrous. They hire drivers that do not speak a word of english and more often than not don't want to step out of their vehicle. Deliveroo has an OK service.
In London, pretty much all restaurants are on both.
It was actually crazy when Uber Eats appeared last year or so. In a few months they captured all the restaurants from Deliveroo and another truckload of restaurants/chains that never did delivery before.
That should be taught in business class. The power of a brand, destroy your competitors and double the market in a few months.
It was actually crazy when Uber Eats appeared last year or so. In a few months they captured all the restaurants from Deliveroo and another truckload of restaurants/chains that never did delivery before.
That should be taught in business class. The power of a brand, destroy your competitors and double the market in a few months.
I don't think it was the brand, but rather the VC funding likely allowed them to offer restaurants better terms.
Realistically if a restaurant uses one delivery service then it's pretty easy to start being on another. So as I've seen most restaurants have one or more such services plastered on their walls.
It's the opposite for my region (DC area). Lots of high-quality restaurants that otherwise don't deliver are on Uber Eats, while GrubHub and Deliveroo is mostly bad fast food and pizza.
I disagree with your theory but you shouldn’t be downvoted for it.
I think that over time, the cost of delivered food will lower as restaurants that do it well (perhaps these virtual restaurants) become faster, optimize their production and optimize the handoff to the driver. Jimmy John’s subs is an example of a company that has done this with their own delivery drivers.
I think that over time, the cost of delivered food will lower as restaurants that do it well (perhaps these virtual restaurants) become faster, optimize their production and optimize the handoff to the driver. Jimmy John’s subs is an example of a company that has done this with their own delivery drivers.
is that an american perspective? There many places where ordering delivery food is a very ordinary thing.
Is just a clever HN user thing. Delivery is common in USA too.
They're so specific that it's obvious that they're describing their self. The HN trope where someone mistakes their own specific tastes for self-evident commentary on how the world works.
e.g. As if you need social anxiety to appreciate the vast convenience of ordering food to your doorstep.
e.g. As if you need social anxiety to appreciate the vast convenience of ordering food to your doorstep.
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There are two fundamental issues in food delivery business:
1. Per hour cost of a delivery person is usually $20 after taking in to account vehicle, gas, down times etc. If you assume each delivery takes minimum of 20 mins (accounting for restaurant-customer-return hops), we are talking average of $6+ per delivery. Considering a cost of a meal is usually $10-20, this is significant barrier. My question is: Does these startups taking on losses to build customer base?
2. Cooked food is notoriously perishable. Think about eating burger lying around for 30-60 mins before you eat. This not only limits items you can deliver but also puts on pressure that you are always running against clock. One mistake and you are bound to lose a customer for factors not in your control.
So, food delivery idea is not new. It had been tried and failed to takeoff probably couple of dozen times mainly due to above two issues. What really has changed now to mitigate these two issues?
1. Per hour cost of a delivery person is usually $20 after taking in to account vehicle, gas, down times etc. If you assume each delivery takes minimum of 20 mins (accounting for restaurant-customer-return hops), we are talking average of $6+ per delivery. Considering a cost of a meal is usually $10-20, this is significant barrier. My question is: Does these startups taking on losses to build customer base?
2. Cooked food is notoriously perishable. Think about eating burger lying around for 30-60 mins before you eat. This not only limits items you can deliver but also puts on pressure that you are always running against clock. One mistake and you are bound to lose a customer for factors not in your control.
So, food delivery idea is not new. It had been tried and failed to takeoff probably couple of dozen times mainly due to above two issues. What really has changed now to mitigate these two issues?
Fundamentals still the same from the Spoonrocket days. $15/hr to pay the drivers. 3 to 5 trips an hour. Avg ticket is $16, and the platforms (P, U, D) take a third.
What's changed?
Consumers changed. People are paying $6 for delivery. They've grown accustomed to room service.
No one's taking 60+ min for food delivery.
What's next is taking India's lead and integrating ordering, prep, delivery all in one.
What's changed?
Consumers changed. People are paying $6 for delivery. They've grown accustomed to room service.
No one's taking 60+ min for food delivery.
What's next is taking India's lead and integrating ordering, prep, delivery all in one.
The one thing that hasn't changed is that not all food is as good delivered as in the restaurant. For example anything fried or that should be crispy.
In my experience that food tends to absorb the moisture from the heat/steam it emits which gets trapped by the packaging and therefore makes it soggy.
In my experience that food tends to absorb the moisture from the heat/steam it emits which gets trapped by the packaging and therefore makes it soggy.
I believe this will be solved by science in the packaging.
For basics, there could be hot/cold pads at certain places in the packaging to condense the steam away from the food.
For advanced stuff, you could imagine certain parts of the meal actually being cooked on-route. For example, imagine a raw steak being shipped with two hot metal plates which spring onto the steak 3 minutes from delivery. As you open the package, the steak is still sizzling!
For basics, there could be hot/cold pads at certain places in the packaging to condense the steam away from the food.
For advanced stuff, you could imagine certain parts of the meal actually being cooked on-route. For example, imagine a raw steak being shipped with two hot metal plates which spring onto the steak 3 minutes from delivery. As you open the package, the steak is still sizzling!
I get food from UberEats and DoorDash that are still hot to the touch. I’ve had some food that I had to cool down. This is in stark difference from delivery in the 90s (the last time I got delivered food). I’m very willing to pay extra for this and not have to pay tip to the restaurant.
You don't pay tip for delivery? Good to know, I guess I will only order deliveries when I got to the US becaude I refuse to tip and I understand it won't be a valid option at a restaurant.
you most definitely should tip the delivery drivers. The delivery fees dont usually go towards them. Uber typically takes 35% of the bill from restaurants. The "delivery fee" is usually to help cover that. Not tipping the driver is just screwing the driver. Unfortunately, tipping is expected so not doing it wont change anything and you just hurt the little guy
> we are talking average of $6+ per delivery. Considering a cost of a meal is usually $10-20, this is significant barrier
I don't understand. Why does the value of the thing being delivered make a difference to the value of the fact that it's delivered?
Should we expect it to cost more to deliver a more expensive item? I don't see why. Why should it cost less to deliver a less expensive item.
I don't understand. Why does the value of the thing being delivered make a difference to the value of the fact that it's delivered?
Should we expect it to cost more to deliver a more expensive item? I don't see why. Why should it cost less to deliver a less expensive item.
That's how human psychology works, and it's not always logical: we're willing to pay up to a certain percentage for delivery, when it becomes 50% or 100% of the price of the product the consumer would rather give up.
In a similar ways there was a study a few years ago that showed that people would be fine driving a longer distance to save $10 on something that's usually worth $30, but they won't bother to save the same $10 on something that's worth several hundreds.
In a similar ways there was a study a few years ago that showed that people would be fine driving a longer distance to save $10 on something that's usually worth $30, but they won't bother to save the same $10 on something that's worth several hundreds.
You are correct that the value of the delivery does not change with the cost of the item. As a cost impact, it makes sense to instead compare to the time and cost of traveling myself to get the item.
But the OPs point is valid if you think about the impact to your budget. Saying a meal delivered represents a 50% markup in your food entertainment budget is a legit consideration. Were we talking about a 5% or 10% impact to the budget it would less dramatic.
But the OPs point is valid if you think about the impact to your budget. Saying a meal delivered represents a 50% markup in your food entertainment budget is a legit consideration. Were we talking about a 5% or 10% impact to the budget it would less dramatic.
In an urban area, there's two related costs; money and time. Depending on where you're trying to go and how to get there it can be a lot. Not everybody can afford the time to go out, and throw in parking a car in there and you can easily waste way too much time trying to get food. And that's assuming you can even find free parking.
Average order is closer to $20.
Uber then takes up to 30% cut on the food cost.
Uber then takes up to 30% cut on the food cost.
See Mac’d from the last yc batch as well. There’s some cool stuff happening in food. Ghost kitchens have existed for a while, and I’ve had a restaurateur friend mention them to me quite a few years ago, but it seems like they’re hitting scale and getting very interesting.
I will not order take out from Uber. I’ve seen drivers with the food on the floor with passengers sitting over it. Deliveries also aren’t quick.
Weird; in the two cities I've seen them, all UberEats drivers use mopeds, they don't drive people as well. How does that even work? I don't think the apps let you coordinate the delivery and ride.
The most interesting part of this is their use of user data. Traditionally, it seems like there isn't a great way to judge demand for a restaurant until you open it, so it makes sense that user tracking (to gauge interest) and the ability to operate out of an already profitable space (reduced upfront cost) gives establishments a significant advantage (although the article doesn't exactly comment on number of failed online restaurants, so selection bias cannot be ruled out.) I wonder how competitors like GrubHub use data to gauge interest...
What's annoying is when you try to order from an existing restaurant and notice they marked up their menu across the board for Uber Eats, then there's delivery on top of that.
That's because Ubereats (and most food delivery platforms) take a huge cut (up to ~30%).
Many low-margin restaurants wouldn't be able to survive without making that up somehow. I sometimes wonder why restaurants bother to list on food-platforms at all. Maybe they figure it's loss-leader marketing?
Or perhaps being that food markups are usually in the ~50%, and drinks are several hundred percent, they can afford to make less?
Many low-margin restaurants wouldn't be able to survive without making that up somehow. I sometimes wonder why restaurants bother to list on food-platforms at all. Maybe they figure it's loss-leader marketing?
Or perhaps being that food markups are usually in the ~50%, and drinks are several hundred percent, they can afford to make less?
UBer eats $500/sign up + 35% of orders
Grubhub 27.5% if order comes from grubhub, it from restaurants website its 10%
Eat24 - 25%
Grubhub 27.5% if order comes from grubhub, it from restaurants website its 10%
Eat24 - 25%
Restaurants are low margin because of fixed costs and a limited number of customers for their fixed space. Delivery doesn't add to their fixed costs, and their gross margin is high.
FTA:
>For restaurateurs, it can be a chance to spread their fixed costs over a higher volume of orders.
FTA:
>For restaurateurs, it can be a chance to spread their fixed costs over a higher volume of orders.
Makes sense. Thanks.
35% in Australia.
https://mobile.abc.net.au/news/2018-04-22/uber-eats-criticis...
https://mobile.abc.net.au/news/2018-04-22/uber-eats-criticis...
Everything’s way more expensive in Aus, and not always with a good explanation why.
It’s gotten better the past few years but Aus as always gotten reamed with a surcharge on anything tech related. Adobe was most famous, charging about 2x for the full Creative Suite. Apple too. At one point I emailed the CEO of the company I worked for at the time asking why Australia was charged 60% more for the same OS dvd, not even specialized for the market in any way (since all locales are built-in), and got a reply from an assistant about “taxes, supply chain, local markets” blah blah and wasn’t super convinced by the response. 10% for GST is fair but there’s no way shipping a container load of DVDs there, divided by the number of DVDs in the container, could possibly account for that difference.
If not on price, then availability was also inconsistent. Netflix and the local broadcasters had to learn this themselves when people setup US based proxy accounts, or just plain said ‘fuck it’ and went to the Pirate Bay.
It’s gotten better the past few years but Aus as always gotten reamed with a surcharge on anything tech related. Adobe was most famous, charging about 2x for the full Creative Suite. Apple too. At one point I emailed the CEO of the company I worked for at the time asking why Australia was charged 60% more for the same OS dvd, not even specialized for the market in any way (since all locales are built-in), and got a reply from an assistant about “taxes, supply chain, local markets” blah blah and wasn’t super convinced by the response. 10% for GST is fair but there’s no way shipping a container load of DVDs there, divided by the number of DVDs in the container, could possibly account for that difference.
If not on price, then availability was also inconsistent. Netflix and the local broadcasters had to learn this themselves when people setup US based proxy accounts, or just plain said ‘fuck it’ and went to the Pirate Bay.
The thing that really impresses/surprises me about the growth of services like these is that people have so much disposable income to pay for stuff like this. In the news one reads constantly about how people are stressed financially. Maybe people are diverting money they once would have spent on other luxuries (cable tv maybe?) toward this kind of expense.
The inequality slope is increasing. There's a fairly large upper middle class of people who work+commute long hours and are prepared to pay for extreme convenience. While at the same time there's also a precariat of people for whom earning a small and variable amount outside normal working hours sounds like a good idea, providing cheap labour to these services.
https://delong.typepad.com/sdj/2009/02/changing-relative-pri... : "In Agatha Christie's autobiography, she mentioned how she never thought she would ever be wealthy enough to own a car - nor so poor that she wouldn't have servants..."
Perhaps that is now reversing. Or the gap is wide enough to have a servant with a car.
https://delong.typepad.com/sdj/2009/02/changing-relative-pri... : "In Agatha Christie's autobiography, she mentioned how she never thought she would ever be wealthy enough to own a car - nor so poor that she wouldn't have servants..."
Perhaps that is now reversing. Or the gap is wide enough to have a servant with a car.
1) It’s not that huge of a markup
2) For a larger group, consider the added cost of dining in - expectation of 18-20% tip, the wine (or other alcohol) is typically overpriced or there’s a $15-20 corkage fee per bottle. Transportation or parking is another potential expense.
3) Some foods lend themselves well to leftovers, so with marginal increase in price one might be buying a meal for the next day, too.
4) For family dining, this puts less pressure on kids and less stress on parents. Keeping the little rascals busy for 2+ hours that a typical dinner might last could get a tad hard.
2) For a larger group, consider the added cost of dining in - expectation of 18-20% tip, the wine (or other alcohol) is typically overpriced or there’s a $15-20 corkage fee per bottle. Transportation or parking is another potential expense.
3) Some foods lend themselves well to leftovers, so with marginal increase in price one might be buying a meal for the next day, too.
4) For family dining, this puts less pressure on kids and less stress on parents. Keeping the little rascals busy for 2+ hours that a typical dinner might last could get a tad hard.
couple factors
- growing inequality: more people at each end of the spectrum; rich get richer (and have more income for food delivery), poor get poorer and lack full-time job opportunities (and are more incentivized to take low income, insecure delivery jobs) - it's expensive to be poor: working more hours means fewer opportunities to buy groceries or take time to cook.
- growing inequality: more people at each end of the spectrum; rich get richer (and have more income for food delivery), poor get poorer and lack full-time job opportunities (and are more incentivized to take low income, insecure delivery jobs) - it's expensive to be poor: working more hours means fewer opportunities to buy groceries or take time to cook.
Cable TV? I am quite sure in the future we are going to pay almost the same amount what people were paying for cable TV. Not all content is available on each service so in the end people will end up subscribing for Netflix, Amazon Prime, HBO, Disney whatever etc. Plus more for sports. Also, good luck to people who don't have true unlimited plans, as streaming all those high definition bits over the internet just means paying your ISP more.
One word: kids. For a family of 4 or 5 or if you have baby, going to a restaurant is much more challenging than eating in.
We order in usually once a week - sometimes from DoorDash sometimes from the restaurant directly.
We order in usually once a week - sometimes from DoorDash sometimes from the restaurant directly.
hmmmm.... I wonder if Uber eats can do what AirBnb did to the hotel business by allowing home chefs-after-6pm to take low risk experiments and launch micro Uber only restaurants from their home kitchen or a common kitchen (managed by Uber eats to deal with sanitation challenges).
It would have to be from a commercial kitchen to pass health regulations in most places. There are a few restaurants than share kitchens with the one next door, and I would not be surprised if they had a virtual restaurant or two for delivery only.
No reason that the kitchens that food trucks use can’t support this as I suspect they dont have much demand for space around 5pm.
No reason that the kitchens that food trucks use can’t support this as I suspect they dont have much demand for space around 5pm.
I agree with your point on kitchen sharing, but I'm wondering if we sharing an incorre assumption:
should we expect that the laws will be followed? Policing unlicensed taxis _should_ have prevented Uber from succeeding. I recall early Uber being a considered "ride-sharing" in attempt to avoid this problem.
How will unlicensed restaurants be enforced? Will people simply call the practice food-sharing or splitting-meals? Start from the same model: two friends living across the city but one didn't cook, the other makes large meals. Uber meals is just a delivery service. Combine with money transfer app: it's not a restaurant, is a group of friends pitching in for a good meal.
Uber successfully managed to get driver's to assume the risk when running unlicensed taxis. It wouldn't surprise me if they could reimagine that success here. The biggest hurdle I foresee: keeping the branding, and scale small enough to fly under the radar until it's well established
should we expect that the laws will be followed? Policing unlicensed taxis _should_ have prevented Uber from succeeding. I recall early Uber being a considered "ride-sharing" in attempt to avoid this problem.
How will unlicensed restaurants be enforced? Will people simply call the practice food-sharing or splitting-meals? Start from the same model: two friends living across the city but one didn't cook, the other makes large meals. Uber meals is just a delivery service. Combine with money transfer app: it's not a restaurant, is a group of friends pitching in for a good meal.
Uber successfully managed to get driver's to assume the risk when running unlicensed taxis. It wouldn't surprise me if they could reimagine that success here. The biggest hurdle I foresee: keeping the branding, and scale small enough to fly under the radar until it's well established
There are a few places that stay under the radar, but generally they don’t heavily promote the food side of the “experience”, and aim their businesses at non-locals who would be less likely to report them if they are not perfectly happy.
Another problem is that health laws are generally stronger and better enforced than taxi law. See [0] for the definition of a Food Establishment for Washington State. Also there are generally tip lines for reporting restaurants and it only takes 1 person to have a bad experience to shut down a location.
[0]: http://apps.leg.wa.gov/wac/default.aspx?cite=246-215-01115
Another problem is that health laws are generally stronger and better enforced than taxi law. See [0] for the definition of a Food Establishment for Washington State. Also there are generally tip lines for reporting restaurants and it only takes 1 person to have a bad experience to shut down a location.
[0]: http://apps.leg.wa.gov/wac/default.aspx?cite=246-215-01115
> How will unlicensed restaurants be enforced?
One story about a dead cockroach or rat feces making into a meal will let market forces take care of it. The story doesn’t even have to be true.
One story about a dead cockroach or rat feces making into a meal will let market forces take care of it. The story doesn’t even have to be true.
One story about a dead cockroach or rat feces making into a meal will let market forces take care of it. The story doesn’t even have to be true.
On the other hand, it's a virtual restaurant. So all you have to do is pay some kid on Fivrr five bucks for a new logo with a different name, and you're back in business!
On the other hand, it's a virtual restaurant. So all you have to do is pay some kid on Fivrr five bucks for a new logo with a different name, and you're back in business!
If you sell food without a license, in some states you could go in jail.
So it's pretty different from getting a fine which UBER pays.
So it's pretty different from getting a fine which UBER pays.
In Portland damn near every food cart is on some delivery platform. It’s actually made ordering from some of my favorite spots almost impossible in person since their order volume is just too high.
It would have to be a common kitchen, and they would need everyone to pass a food handler's class.
Given Uber's reputation for bucking regulation, I would be doubly-hesitant to trust meals from their kitchen.
Given Uber's reputation for bucking regulation, I would be doubly-hesitant to trust meals from their kitchen.
Individuals are not allowed to opt out of commercial food safety in most advanced economies.
It could be done using a decentralized platform, but any registered company attempting that sort of business model wouldn't last very long.
It could be done using a decentralized platform, but any registered company attempting that sort of business model wouldn't last very long.
Individuals weren't allowed to run unlicensed hotels or operate unlicensed taxis.
I've never gotten sick from home cooking but have from restaurants. I always hear horror stories about the conditions of restaurants.
Does anyone know why the risk rate of food production in a home kitchen thought to be higher? Can that be mitigated somehow?
I've never gotten sick from home cooking but have from restaurants. I always hear horror stories about the conditions of restaurants.
Does anyone know why the risk rate of food production in a home kitchen thought to be higher? Can that be mitigated somehow?
> I've never gotten sick from home cooking
Well then you and your family and friends happen to follow good hygiene standards... but plenty of people don't, and are even more incentivized not to if there's a buck or two in it. ("I think I can still use this meat..." "I'll just wash off this mold...")
I don't know why you'd trust random strangers cooking out of their homes with zero food safety training whom you haven't personally vetted at all. It's not to say commercial kitchens are perfect, but there are verifiable processes in place to try to hold them to certain standards and ultimately shut them down if they don't, which simply aren't scalable to apply to home kitchens.
Well then you and your family and friends happen to follow good hygiene standards... but plenty of people don't, and are even more incentivized not to if there's a buck or two in it. ("I think I can still use this meat..." "I'll just wash off this mold...")
I don't know why you'd trust random strangers cooking out of their homes with zero food safety training whom you haven't personally vetted at all. It's not to say commercial kitchens are perfect, but there are verifiable processes in place to try to hold them to certain standards and ultimately shut them down if they don't, which simply aren't scalable to apply to home kitchens.
You clearly have never worked in the food industry.
I have, and I trust most of my neighbors to prepare a chicken cutlet with more care than any revolving-door restaurant I ever worked in.
Consider just restaurants of a rank <= Outback Steakhouse (where I was a line cook for three years). Pure minimum-wage apathy will be cooking your food. Almost anyone can do better than that, especially someone inviting people into their home.
I'm seriously having a hoot over someone on the internet using restaurant food/hygiene quality as a standard for any argument.
I have, and I trust most of my neighbors to prepare a chicken cutlet with more care than any revolving-door restaurant I ever worked in.
Consider just restaurants of a rank <= Outback Steakhouse (where I was a line cook for three years). Pure minimum-wage apathy will be cooking your food. Almost anyone can do better than that, especially someone inviting people into their home.
I'm seriously having a hoot over someone on the internet using restaurant food/hygiene quality as a standard for any argument.
Most restaurant food is expensive and terrible for you. It all depends on the risk rate but I suspect for people with a good reputation the risk rate of home cooked food is low.
I wouldn't have a trust issue assuming there is a rating system. If people are getting sick from someone's kitchen, they're going to leave a bad review.
Think about taxi drivers compared to Uber drivers. Uber drivers know a few bad ratings can be detrimental to their income, so they typically try to put their best foot forward. They push hard for perfect reviews, offer bottles of water, try to be extra considerate with the choice of music, air temperature, etc. Taxi drivers don't have the same incentives. They're not going to be fired if a few passengers feel it's too cold in their car.
I imagine the same would apply to home chefs. They know one batch of food that gets customers sick could leave them out of work, and cost them their entire reputation. A few bad ratings and they're dropping down the recommendation list and watching 80% of their business disappear. I could see home chefs trying to go above and beyond like Uber drivers to secure better reviews. Did you order 6 cookies? Well, they're going to give you 7, and a little note that says thanks, here's a free cookie just for you.
It could actually be a great business for more elderly people. We all love our grandmother's specialties, right? Imagine a grandparent that could prepare big lasagnas, soups, and chilis at home, and a driver could come pick up portions to deliver to people around the neighborhood. Feel like takeout tonight? Instead of Dominos, you can see Ruth down the street prepared homemade cabbage rolls that you can get delivered. I wouldn't mind supporting that type of business.
Think about taxi drivers compared to Uber drivers. Uber drivers know a few bad ratings can be detrimental to their income, so they typically try to put their best foot forward. They push hard for perfect reviews, offer bottles of water, try to be extra considerate with the choice of music, air temperature, etc. Taxi drivers don't have the same incentives. They're not going to be fired if a few passengers feel it's too cold in their car.
I imagine the same would apply to home chefs. They know one batch of food that gets customers sick could leave them out of work, and cost them their entire reputation. A few bad ratings and they're dropping down the recommendation list and watching 80% of their business disappear. I could see home chefs trying to go above and beyond like Uber drivers to secure better reviews. Did you order 6 cookies? Well, they're going to give you 7, and a little note that says thanks, here's a free cookie just for you.
It could actually be a great business for more elderly people. We all love our grandmother's specialties, right? Imagine a grandparent that could prepare big lasagnas, soups, and chilis at home, and a driver could come pick up portions to deliver to people around the neighborhood. Feel like takeout tonight? Instead of Dominos, you can see Ruth down the street prepared homemade cabbage rolls that you can get delivered. I wouldn't mind supporting that type of business.
> I wouldn't have a trust issue assuming there is a rating system.
That was the original free-market rationale for not having food or medical regulation at all: reputation will take care of it!
Unfortunately, unsafely prepared food can literally kill you. So the country wised up and requires food safety certification.
Ratings are great for pushing up average quality. They're a non-starter when it comes to guaranteeing minimum quality, i.e. the product won't make you sick or kill you.
Honestly, I don't trust someone's grandmother who thinks it's fine to cut the cooked chicken with the knife she used when it was raw, because she was never certified in a food safety course, even if it only happens 1% of the time. It's not fair to make people get sick so enough of them leave 1-star reviews.
Because again, there's a world of difference between an Uber driver who doesn't know the route (minor inconvenience), and food that makes me ill for days.
That was the original free-market rationale for not having food or medical regulation at all: reputation will take care of it!
Unfortunately, unsafely prepared food can literally kill you. So the country wised up and requires food safety certification.
Ratings are great for pushing up average quality. They're a non-starter when it comes to guaranteeing minimum quality, i.e. the product won't make you sick or kill you.
Honestly, I don't trust someone's grandmother who thinks it's fine to cut the cooked chicken with the knife she used when it was raw, because she was never certified in a food safety course, even if it only happens 1% of the time. It's not fair to make people get sick so enough of them leave 1-star reviews.
Because again, there's a world of difference between an Uber driver who doesn't know the route (minor inconvenience), and food that makes me ill for days.
We allow strangers that haven't had their driving or eyes tested in 50 years drive us down the highway (Uber). We allow strangers to operate hotels out of their homes (Airbnb). However, we can't allow a stranger to cook us a chicken breast or prepare a soup?
There isn't a world of a difference here. They all present minor dangers, and I'm willing to take the risk of buying a piece of lasagna from my neighbor.
There isn't a world of a difference here. They all present minor dangers, and I'm willing to take the risk of buying a piece of lasagna from my neighbor.
What about if you found out later that your neighbour doesn't wash their hands after leaving a bathroom stall?
That's not the fundamental issue unfortunately.
I do trust random taxi drivers and I do trust arbitrary individuals to cook for me (trust is a bad word to use here; rather, I think the positives outweigh the negatives, I'd rather pay less and take some small risks).
But regulation in these areas doesn't apply because I might get into trouble. With food it's about preventing illness outbreak, with taxis it's about preventing massive congestion. At least, that's the goal (in practice the regulation gets corrupted).
I do trust random taxi drivers and I do trust arbitrary individuals to cook for me (trust is a bad word to use here; rather, I think the positives outweigh the negatives, I'd rather pay less and take some small risks).
But regulation in these areas doesn't apply because I might get into trouble. With food it's about preventing illness outbreak, with taxis it's about preventing massive congestion. At least, that's the goal (in practice the regulation gets corrupted).
> I do trust random taxi drivers and I do trust arbitrary individuals to cook for me
Do you though?
All the taxis you take are with licensed drivers. The government has already set up certification standards.
Likewise, how often do you eat a meal by an arbitrary individual? Generally it's either someone you know and trust, or else a professional cook under food safety certification working in an inspected kitchen.
Are you saying you'd get into a taxi driven by someone without a driver's license because you'd rather pay less and take risks? Or eat a hamburger made from ground beef sitting in a refrigerator for 4 weeks because the cook "thinks it's fine", and again you'd rather pay less and take risks?
Do you though?
All the taxis you take are with licensed drivers. The government has already set up certification standards.
Likewise, how often do you eat a meal by an arbitrary individual? Generally it's either someone you know and trust, or else a professional cook under food safety certification working in an inspected kitchen.
Are you saying you'd get into a taxi driven by someone without a driver's license because you'd rather pay less and take risks? Or eat a hamburger made from ground beef sitting in a refrigerator for 4 weeks because the cook "thinks it's fine", and again you'd rather pay less and take risks?
You're assuming a lot about my life here.
Without going in to huge detail I'll just say that most of this is false. A few years back I went hitch-hiking around Europe, no licensing was involved, as far as I'm concerned my drivers _were_ randomly selected (if anything, _they_ chose _me_).
Your last sentence is essentially an enormous strawman.
That all said, this isn't about me. The point of regulation is to prevent tragedy of the commons style situations. One instance of someone buying a meal from a neighbour or paying a friend for a lift doesn't matter, the commercialisation causes problems.
Without going in to huge detail I'll just say that most of this is false. A few years back I went hitch-hiking around Europe, no licensing was involved, as far as I'm concerned my drivers _were_ randomly selected (if anything, _they_ chose _me_).
Your last sentence is essentially an enormous strawman.
That all said, this isn't about me. The point of regulation is to prevent tragedy of the commons style situations. One instance of someone buying a meal from a neighbour or paying a friend for a lift doesn't matter, the commercialisation causes problems.
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Your "home cooking" wasn't required to make profit. This perverts the incentive from "good food" to "profit". Also your home cooking has a reputation issue.
Uber Eats will not have a reputation issue. Any given "restaurant" can be a facade easily recycled into a new brand name. Any problems Uber can pawn off as a problem with that restaurant and not a fundamental problem of Uber operating above the law and not having safety regulations on its "independent contractors".
As Uber has repeatedly shown a disregard for laws, we can expect it will continue to show a similar disdain for safety, including food safety.
Uber Eats will not have a reputation issue. Any given "restaurant" can be a facade easily recycled into a new brand name. Any problems Uber can pawn off as a problem with that restaurant and not a fundamental problem of Uber operating above the law and not having safety regulations on its "independent contractors".
As Uber has repeatedly shown a disregard for laws, we can expect it will continue to show a similar disdain for safety, including food safety.
That's not a good comparison. The rental market always had a big part of black market through local listings, mouth to mouth or sites like craiglist/gumtree.
The regulator/IRS could go through some residential blocks in popular cities and find undeclared tenants in almost every house. AirBnB makes it worse and shorter term but it didn't invent any of that. It just makes it more visible.
In comparison, restaurants are rarely undeclared or illegal operations.
The regulator/IRS could go through some residential blocks in popular cities and find undeclared tenants in almost every house. AirBnB makes it worse and shorter term but it didn't invent any of that. It just makes it more visible.
In comparison, restaurants are rarely undeclared or illegal operations.
Also, unlike AirBnB, even a conscientiously-run underground restaurant would have trouble not attracting attention from my neighbors. If the house down the street has a different car in front of it every week I would never notice. If there's a constant stream of people visiting (parking on the street, etc.) I'd notice and probably be inclined to figure out what's going on. That pattern of behavior is also likely to get the cops called on suspicion of drug dealing.
I think a very, very cautious person who carefully screened their clientele could get away with having one, maybe two small groups dine at their house a night. Probably not even every day a week. Suffice it to say that we're talking about a market so small it might as well be said not to exist, and by that point you might as well just call it catering or a private chef, not a restaurant.
I think a very, very cautious person who carefully screened their clientele could get away with having one, maybe two small groups dine at their house a night. Probably not even every day a week. Suffice it to say that we're talking about a market so small it might as well be said not to exist, and by that point you might as well just call it catering or a private chef, not a restaurant.
I guess there too many variables. But most important is. Depends on the cleanliness of the home and willingness of the chef to properly handle food
> Individuals are not allowed to opt out of commercial food safety in most advanced economies.
Since 2011, Finland (and now also some other countries) has twice a year a special "restaurant day" food festival, when anyone is allowed to run a pop-up restaurant for one day, and serve food cooked at home.
Since 2011, Finland (and now also some other countries) has twice a year a special "restaurant day" food festival, when anyone is allowed to run a pop-up restaurant for one day, and serve food cooked at home.
I think Deliveroo Editions use commercial kitchens from temporary shipping containers, dropped in 'dead space', out of hours car/ industrial parks. Ah, from 2017:
https://www.theguardian.com/business/2017/oct/28/deliveroo-d...
https://www.theguardian.com/business/2017/oct/28/deliveroo-d...
Sounds risky. Not that uber drivers are riskless - but food can be spoiled in less obvious ways than driving.
Had never thought about this, but it's pretty smart idea. Wondering if this will become more and more the norm, especially catering singles. Is there a way to search for these online only restaurants exclusively?
Seems similar to this: https://www.theguardian.com/business/2017/oct/28/deliveroo-d...
Which talks about "dark kitchens" i.e. existing, well-known chain, having a branch that purely serves delivery services.
Which talks about "dark kitchens" i.e. existing, well-known chain, having a branch that purely serves delivery services.
I have always thought this space will turn into the Netflix of food. First you differentiate by having a good array of content (food) but will eventually need to create original content with exclusivity (Uber creating or funding their own restaurants just for delivery) to differentiate.
It would be interesting to have access to an anonymized uber eats order dataset.
The biggest thing I've noticed with uber eats is the outrageous delivery fees. I'm not really interested in paying an extra $6.99 for a meal and I'm surprised other people are fine with it.
In my area, a lot of them are either free or $1.99, $2.99. (It will vary by demand though).
I think my threshold is $2.99 - in some scenarios when I'm extremely sick.
I think my threshold is $2.99 - in some scenarios when I'm extremely sick.
in mine, fees used to be around there. I was comfortable with the 2.49 or lower fees. Around 1 month ago they raised delivery fees by ~$2-$3 across the board.