If you can make better food than your competitors, you'll thrive - the delivery services make that more true, not less. Stick to your USP and outsource everything else.
> If you can make better food than your competitors, you'll thrive - the delivery services make that more true, not less. Stick to your USP and outsource everything else.
I'm not convinced this is true. IME, delivery-wise, most restaurants are pretty interchangeable, and people make the decision on price. So "stick to your USP and outsource everything else" means that you should outsource cooking to a ghost kitchen and just focus on maintaining a brand. Which is something we start to see happening.
I fear the end game is still going to be DoorDash & friends just contracting or operating their own ghost kitchens, and creating hundreds of fake "brands" that are all sourced from the same kitchens. Recently the online retail sector has demonstrated it's a very viable business model. See the countless noname brands on Amazon, et al.
I don't think buying stuff from someone who sells to the public is abusive. I don't think scraping is abusive. I do think workers' rights are important, but the restaurant industry (especially the mon-and-pop end of it) hardly has a great reputation on that front, so I don't think ordering directly rather than DoorDash sends a message there.
> IME, delivery-wise, most restaurants are pretty interchangeable, and people make the decision on price.
Well, if that's true then why care which of those interchangeable restaurants succeed and which fail?
> So "stick to your USP and outsource everything else" means that you should outsource cooking to a ghost kitchen and just focus on maintaining a brand. Which is something we start to see happening.
> I fear the end game is still going to be DoorDash & friends just contracting or operating their own ghost kitchens, and creating hundreds of fake "brands" that are all sourced from the same kitchens.
Am I supposed to think there's something bad about "ghost kitchens"? If it means better, cheaper food, then surely it's a good thing.
If everything's being sourced from the same kitchens then that's a monoculture that's easy to compete with by offering something better. If those centrally sourced kitchens end up being so high quality that no-one can compete, well, mission accomplished.
I guess if that story works for you, you better stick with it as long as you can.
Some software developers it seems go to work each day thinking how can I put other, poorer, people out of work, and erode the pay and conditions of those that I can't?
Agreed. But the sentiment within the Industry was that COVID gave an opportunity for the Industry restructure itself and repair the mistakes that were never addressed as things were always like repairing an airplane while inflight. The lifelines given to the Industry with PPP made it seem possible while allowing people to come back to work and the changing of menus to accommodate the seasonal changes as were the changes to make outdoor dining a critical part of the whole experience, but as those lifelines have diminished so have the chances of those reforms occurring gone with it.
And while I'm not in favorur of subsidizing noncompetitive Industries, the fact is the loss in sales for many successful restaurants is not due to a lack of demand but rather the imposition that legislative decree have made for those that are focused on menus that simply cannot accommodate a take out model due to shutdowns, limited indoor dining etc...
> Well, if that's true then why care which of those interchangeable restaurants succeed and which fail?
Because some have more contributions to the Community and Society as a whole, the last place I worked at sourced 60% of its seasonal produce from local and organic farms instead of the typical purveyors. It helped make learning gardens in many public schools thorough out the US making food education a real thing, it also helped make new young farmers to address the food deserts created from the last financial crisis left in its wake. And it had created a model to iterate upon to address how food production during Mars colonization would look like. Now all of that has been threatened as many of the establishments have had to close.
> Am I supposed to think there's something bad about "ghost kitchens"? If it means better, cheaper food, then surely it's a good thing.
Good and bad are subjective terms one should abstain from using in such a discussion, the focus should be more on the impact that this has and how its implications will ultimately re-shape the paradigm, and not just the Industry but the relationship many people have with food in general as diet based illness kill more in the West than anything else, including COVID.
If its quantified merely as a commodity with an impingement in economies of scale tied to the last mile logistics problem, then sure by those metrics these are all desirable things.
If, however, you value the whole process of how food is grown, raised, and prepared throughout the value system in order to nourish you and by extension your community then: No. Its horrible, the value system will be further denigrated more than what it already has and will consolidate itself into the hands of the few Megacorps that brought you factory farming and countless outbreaks and contamination and recalls of tainted and nutrient deficient, chemical laden, pesticide riddled produce and meat.
> If everything's being sourced from the same kitchens then that's a monoculture that's easy to compete with by offering something better. If those centrally sourced kitchens end up being so high quality that no-one can compete, well, mission accomplished.
That is a rosy, and over-simplification (to say unrealistic) way of how economies of scale and consolidation of capital take place. One that will ultimately leaves you with the a very narrow set of choices that include large fastfood franchises on one side, and boutique exclusionary high end dining with large external investment on the other side with little to nothing in between as restaurants are no longer deemed commercially viable parts of the economy and capital and loans dry and foreclosure is the end result for those already within it and denial of access for anyone who dares to try their hand in making it. Its not beyond doubt that we are seeing the same model the telecoms used to carve out fiefdoms and provide worse and worse services all while charging more for the privilege simply because they know their is no other game in town.
Despite the tired narrative Monopolies are not formed through unfettered Free Market laissez-faire systems, they're made when power is consolidated through the use of arcane legal loopholes and large lobbying purchasing power in elections and the orchestrated consolidation of Capital. The use of all of these things are present in this situation.
Personally, I'm still optimistic about this existential threat to the Industry as it is being FORCED to have to re-invent itself. Something thought to be previously impossible from within. My most optimistic outcomes are based on if the Industry has the ability to make many necessary changes and still be competitive or will home cooking (and by extension private chefs to those who can afford it) make a massive surge as a result?
It was a pleasant surprise as someone who cooked professionally to see how many people who never cooked anything took to baking during the shutdown and shared it on social media in larger numbers than I ever expected. CSA and meat shares from local farms sold out in record numbers this year, I really do wish this momentum continues.
I have a couple of friends who have opened and run their own restaurants - there is an awful lot more to it than that and most restaurants fail for reasons that are nothing to do with the capabilities of the chef.
But, that's the thing. Would you? OP's article is a follow up to an original that focusses on and explains price forks and how that affects these delivery services. [1]
[1] https://themargins.substack.com/p/doordash-and-pizza-arbitra...
Why would you - the customer - pay a restaurant 24$ for a pizza while you could get that same pizza for 16$ via DoorDash in a far more convenient fashion? How much do you care about the restaurant's business if the exact same thing is offered to you at 2/3rd's the original price just 2 taps on your smartphone removed from your door?
Companies like DoorDash are currently losing money and they are happy about it. Why is that?
It's a cost/benefit trade off. DoorDash perceives covering the remaining 8$ of that pizza as an expense. What they bank on is being able to buy an established position of dominance as a middle man on the delivery market.
Two things are happening right now. The first is a race to the bottom and drive other delivery services out of the market. That happens by accruing as many restaurants and their customers on their platform. The second is that restaurants get pressured over time to lower their own prices since they compete less with the menu's displayed in their windows on main street, but with the cheap offerings on DoorDash or GrubHub.
If and when the price gap closes over time, incumbent delivery services who remain get to flip their losses into a profit.
The societal cost? Keeping a regular restaurant open becomes prohibitively expensive (which is why ghost kitchens are becoming a thing), low wages for gig and restaurant workers, impact on the quality and diversity of the food on order.
Maybe some of it's unsustainable, sure. But why should the restaurant care? They're still getting their $24; they should make hay while the sun shines.
> If and when the price gap closes over time, incumbent delivery services who remain get to flip their losses into a profit.
Maybe. This has supposedly been the business model, but has anyone actually managed to execute on it? As soon as they started jacking up the prices it would be very easy for a competitor to enter.
> Keeping a regular restaurant open becomes prohibitively expensive (which is why ghost kitchens are becoming a thing)
As they should - it sounds like they're a more efficient way to do things all round. I'm not worried about regular restaurants disappearing though, because I still like them and am still willing to pay a premium for them.
> low wages for gig and restaurant workers
It's always had a reputation as a minimum-wage (or even below-minimum-wage) job, no?
> impact on the quality and diversity of the food on order.
Sounds like a self-correcting problem - as and when quality and diversity drop, an opportunity rises for anyone who can offer them.
Many restaurants are small independent businesses having business owners taking a lot of financial risk and investing a ton of time to grow that business. They aren't interested in becoming de facto subsidiaries to delivery services. They want to serve their patrons directly while making a living in a sustainable way.
> Maybe. This has supposedly been the business model, but has anyone actually managed to execute on it?
Isn't this how Amazon entered and acquired the book market, by positioning themselves as a book broker at first and then gradually outbidding book stores?
> because I still like them and am still willing to pay a premium for them.
One swallow doesn't make a summer.
> It's always had a reputation as a minimum-wage (or even below-minimum-wage) job, no?
Agreed. Is it to the benefit of society at large if an existing socio-economic circumstances turn more precarious for an increasing group of people?
> Sounds like a self-correcting problem - as and when quality and diversity drop, an opportunity rises for anyone who can offer them.
Isn't that contradictory if the opportunity doesn't exist... because the expenses associated with investing in quality outstrip your competitive advantage with other low-cost competitors?
Sure, you could aim at a high-end niche of customers - e.g. four star restaurants - but those are small and the competition is murderous. That's why there's, comparatively, only a handful of Michelin star restaurants with chefs with a reputation.
Granted, everyone needs to eat. It's a vast market after all. I just do not see how this particular business model applied in the delivery business is a net positive for everyone involved in the long run... except for DoorDash and their ilk.
Restaurants sign up but they have their own drivers. A common interface / middleman for all restaurants. At least it was so in the Netherlands.
Is there a Gresham's law for business models, something like bad business models drive out good?