DoorDash to acquire Instacart
about.doordash.com441 points by WalterSobchak 15 hours ago
441 points by WalterSobchak 15 hours ago
Seems like it should be “DoorDash (YC S13) to Acquire Instacart (YC S12)”, if only to emphasize that this is by far the largest merger of YC companies.
> DoorDash to Acquire Instacart to Help Local Stores Win
> to Help Local Stores Win
Any local store will tell you DD is a necessary evil they put up with but strongly dislike overall. From the % of sales they take to the incredibly rude delivery drivers, DD is not well liked.
On multiple occasions a family member's employees (or they, themselves) have had a DD delivery driver cut to the front of the line, interrupt the cashier, and shove their phone in their face. No words, no anything, just "here is the code/screen/whatever I need to show you to pick up the order". DD doesn't let stores rate delivery drivers so there isn't any recourse.
I worked at a local grocery store while unemployed, and I actually PREFERRED the Doordash/Instacart customers.
Quite a few of them spoke no English, so yes, they'd just present their phone screen. I didn't take it as rude. It was a very clear and direct communication. A simple scan, and boom, nothing further needed, I could just scan their items. Thr QR code scan handled payment and everything. They almost always helped with doing thier own bagging: Time is money, after all.
> Quite a few of them spoke no English, so yes, they'd just present their phone screen. I didn't take it as rude.
I want to be clear, the ability to speak English is not what I took issue with. That doesn't bother me and I'm fine with just showing the phone screen, no conversation. The issue I had was cutting the line and essentially demanding they be helped immediately. Wait in line like everyone else. This is a small food stall in a food hall with often just 1 person working the front. If they are actively helping another customer and have a line, I find it unacceptable to think you can cut to the front and immediately demand attention. What message does that send to the customers in line? "You're less important than delivery orders", and I can tell you that isn't the case due to the large chunk that DD takes.
My family member has even considered shutting down DD orders temporarily if/when the drivers act this way and publishing on social media about it. According to them, the loss in sales (and overall profit, which is minor on DD orders) wouldn't matter compared to the publicity/engagement (I don't know, that's not my world).
Ah, I see. That does suck. There was no line-cutting, that I saw, where I was. But at a grocery store you get kinda forced between belts and carts, so line-cutting would be quite a challenge.
Yeah mixed blessing at best. Increased volume, but not every 30-table restaurant is set up to do much more; kitchens are sized to expected in-person dining.
And all the stuff you mention.
The one restaurant owner I know who’s happy with DD set up an entirely separate kitchen in an industrial park. But to get to the DD revenue necessary to justify that investment, he had a couple of years of DD hell in his main restaurant.
That sounds like a scary investment to make on behalf of what's effectively a single customer. Without some kind of contractual commitment that locks in volume and price, they would really have you over a barrel.
I hate industrial/ghost kitchens so much. Accidentally ordered from one with friends and it was so off-putting.
Could see the kitchen areas through a window and they weren't necessarily dirty, but looked sketchy for some reason. Few people, robots delivering orders, one set of cooks making the food. Just dystopian.
We might as well just build ready to eat food factories that pipe the slop directly into your house. We got rid of the "inconvenience" of going out to eat and enjoying a restaurant. Why not get rid of the pesky delivery middle-man too?
Look up commissary kitchens. A ton of food is made that way, and I don’t see it as being all that different.
And the DD-specific kitchen I know is basically just a typical restaurant kitchen minus attached dining. You can make slop in an industrial park, you can make slop in a real restaurant (I’ve certainly experienced that).
Why in the world would it be necessary to have dining tables for a kitchen to make good food?
Many resstaurants are just heating up frozen portions delivered from Sysco or similar providers anyway.
A restaurant with a physical presence with dine in service has a reputation to maintain, a ‘cloud kitchen’ food seller does not have the same reputation to worry about.
Every restaurant and ghost kitchen has a reputation to uphold. They all still have customers, and those customers still chat with other people and leave reviews just like it's still 2010.
It can be easier to rebrand a ghost kitchen than to rejigger a restaurant to do other things, though. For instance: The decor doesn't even exist, much less match a certain theme.
A ghost kitchen can also do many things at once that would not traditionally fit together in a single restaurant.
I think that might be part of what some find off-putting, but there's no conceptual reason why the same location can't make awesome New Haven wood-fired pizzas, Texas smoked beef ribs, and Philly cheesesteak sandwiches on the same day. It can work as long as the volume supports each of them well-enough that they can retain workers who are able to master these things well-enough to keep a good reputation going.
It's just a building with a kitchen, and that kitchen does not have a size limit. It can do many styles of cooking at once.
And when compared to having several different sit-down restaurants to operate, management can be more-centralized while also keeping them closer to the work. This can improve quality and reduce costs.
(That doesn't make me a fan of the idea. I'd rather go to a restaurant and sit down than have anything delivered, aside from things that travel well. Pizza, BBQ, and cold subs can travel extremely well, for instance, while french fries and burgers usually turn into sadness in minutes. But other people want whatever they want and that's fine too.)
For whatever reason, I find the reviews and rating of eateries on delivery apps locally to be extremely undiscerning. (Or fake?) Like restaurants that have bottom-tier 3.8-stars on Google Maps will be 4.8-star top-rated places on Uber Eats. Basically everything is mashed into the same rating scale as Uber drivers themselves, so what reputation difference even exists between different places?
(And at that, one my biggest complaints of Google Maps is that the reviewers are undiscerning and/or fake compared to what Urbanspoon had before it died.)
Sure, me too. When I do leave a review I make it honest and detailed, but I'm not everyone and some people seem to suck at reviewing things. (Or maybe they're getting paid: There's a Chinese buffet that I go to sometimes that offers a discount for a 5-star review on Google Maps. I should take a picture of the sign and put it on Google; the food is OK, but slime is slime.)
But do the reviews of a ghost kitchen differ in these ways compared to a sit-down restaurant? If not, then: They each have the same reputation to build and uphold -- whatever that reputation is worth.
The supermarket where I shop has a specific checkout station for delivery drivers. I have never seen one in a normal checkout line (not that it might be very obvious, especially if they were shopping not just picking up an order).
What I don't understand is why DD gets any cut of the store's profit. They should be paying retail like anyone else, and their customer paying for the delivery costs.
> What I don't understand is why DD gets any cut of the store's profit. They should be paying retail like anyone else, and their customer paying for the delivery costs.
It's a finder's fee, a very old and ordinary concept in business. The more sales you can bring to a company (or could divert to competitors), the more skin in the game you have. That's not to say I think these companies aren't in some ways anticompetitive to the detriment of merchants and DIY shoppers.
> What I don't understand is why DD gets any cut of the store's profit. T
In theory it's because that customer wouldn't be purchasing without DD. In practice it's a shakedown.
The stores often charge higher prices on app for the same items. If there's a sale on items, you won't likely get them on the app. You can say it's a shakedown but you can always refuse DoorDash business and just operate like every other place that doesn't use it. It's not end of the world.
Sure, you could operate without DD. You can also operate without advertising, but it makes it a lot harder to reach customers.
Elsewhere in this post a store owner talks about how DD is a necessary evil. How they have convinced a big chunk of customers to only use DD to order food, and you will lose out if you aren't on the platform.
It's a prisoners dilemma. The total market share remains the same, but if only one grocery store was on DD they'd be at an advantage over those who don't
These grocery stores are all going to continually lose market share to Amazon, Walmart, etc. as online ordering increases. The pricing of in person grocery stores is outrageous and the experience shopping at them is annoying. I hope to see many go out of business sooner than later so we can have better businesses take their place!
The supermarket I worked at had a split system. Our internal delivery people had their own checkout area, but it wasn't open 24/7. Doordash and the like had to go through the regular lines regardless.
because they can get away with it and some VCs say best companies dont have customers, they have hostages.
That kind of thinking is why people call them vulture capitalists. It’s only true until it’s not. if your supplier is treating you like a hostage, you’re probably not very loyal.
I went to a restaurant for a nice meal with my family. We ordered and waited for our food forever, as a steady stream of delivery bags went out the door. It was an hour before our first appetizer came out. It took us a while to figure it out, but there's no doubt the restaurant was incentivized to prioritize delivery orders over customers sitting in front of them.
> On multiple occasions a family member's employees (or they, themselves) have had a DD delivery driver cut to the front of the line, interrupt the cashier, and shove their phone in their face. No words, no anything, just "here is the code/screen/whatever I need to show you to pick up the order". DD doesn't let stores rate delivery drivers so there isn't any recourse.
That's exactly what it's like in NYC. They just walk up with their huge backpacks straight to the front skipping everyone, turn around bumping people, show their phone, then stand RIGHT in the front as-if no one else exists. It's awful.
I'd love to contribute to a no-delivery store. Pickup or dine-in only.
Edit: Might have to re-think Pickup because that would just become a loophole for delivery. Maybe orders have to be placed in-store for to go.
They are being dispatched to the restaurant to pick up an order which was already placed, and which their system is telling them is ready (whether this is correct or not). They also make less than minimum wage in most markets, and their wage is tied to their efficiency.
I don't understand why you think they should wait in line in restaurants where people order at the counter, to pick up their order which was placed online. And if you want to see this, you should be supporting legislation makes them proper employees who get a proper wage based on their time working.
Dispatched? Don’t drivers pick their jobs? They choose to go to the restaurant with the line.
Also, why would those who pay to be there have to wait in line, but people who get paid by a third-party service to be there don’t? That doesn’t make sense.
I don’t get why we’re talking legislation; it’s basic courtesy.
If I said “hey, here’s $5 if you go cut the line at that restaurant,” does that make it right?
You are given an order, which you can decline. If you decline more than a handful, you get deprioritized; in practice this means that you tap accept on every order as it comes up. At best you can sometimes shift the balance a bit by where you wait between orders, but during busy times (which is also when restaurants have long lines), your next order is coming up the moment you finish the last one.
It's also worth noting that most restaurants set the instructions for the pickup, which is usually along the lines of “go to the front of the line and provide the staff with the order number”.
If you said "Hey, I work for an algorithm that will fire me if I don't get this done in a minute but the system didn't have the correct info, and if I don't get this done I won't be able to pay my rent" which is more accurate, then it wouldn't be right for other customers, but it would at least give a bit more insight into why doordashers are rude and look rushed and ragged all the time.
> Also, why would those who pay to be there have to wait in line, but people who get paid by a third-party service to be there don’t? That doesn’t make sense.
The dine-in customers have not paid for or ordered their food, to do so they must wait in line.
The delivery driver is being handed a bag of food that is ready to go and paid for.
Many restaurants are already set up to accommodate online to-go orders. Chik-Fil-A has a separate drive-thru line for online orders, Chipotle lets people come up and get to-go orders that have been paid, same with Potbelly, it’s very common. It’s mildly annoying when you’re the one waiting in line but I don’t expect a delivery driver to wait in line to be handed a bag.
Drivers ostensibly pick their jobs, but if they reject too many jobs they are put on a time-out and can't take any jobs.
Regarding line cutting - it doesn't quite make sense that someone just picking up a bag that is already prepared should wait in the same line as people who are putting in orders for food. For an extreme example, a BBQ place near me in Brooklyn commonly has lines that are 45 minutes long, with people waiting to order. Should a person who called in an order wait in that line, or just go to the front and ask for their food?
Someone must use these services because they are everywhere in the UK and I find them so annoying for many reasons, not just the ones you mention above.
Lots of people cycling all in black on ebikes on pavements making it dangerous for people to walk around safely and causing chaos for drivers and other cyclists. Also generally supporting big business over small stores. Everyone moans about having individuals charged with these minor traffic offences but in my view just targeting companies like JustEat directly and having massive fines based on employee behaviour would be far more effective.
Going by other comments in this thread it seems like if you kicked out the driver they'd probably get fired from Doordash.
My initial take to this news was “what about anti trust?!” But I was surprised to learn that DD is essentially non existent in grocery delivery and instacart’s non grocery deliveries are powered by Uber Eats. For two massive brands they really don’t offer the same product.(edit: not effectively, at least) If anything maybe this helps Instacart/DD compete in grocery with the real giants in Walmart and Amazon. I wouldn’t be mad to see DOJ block this but I was just surprised to learn about the landscape of grocery delivery.
I think your first instinct about antitrust is correct.
Out of the group of people who have food delivered, that food mostly comes from restaurants or grocery stores. Instacart/DD will be a behemoth of food delivery.
Whenever this comes up, I really don't care if there is antitrust or not. Delivery is a luxury service.
Whenever I bring this up, someone always goes "so disabled people should starve"? What did they do before delivery apps? Many restaurants still offer delivery that they do themselves (seriously, look it up). But more importantly, meals on wheels and other services are still a very large, established network.
Anyways, I guess I could be convinced that this is bad for restaurants. But so many restaurants, especially in cities, are offering delivery services where 10 and 20 years ago there were none. And the infrastructure is not set up to handle that.
As a result, city streets are frequently blocked by delivery drivers. I genuinely would love if my city passed a resolution that prevented restaurants within the city center from offering DoorDash/Ubereats unless they had a dedicated parking lot.
Delivery is a luxury service until:
- you have school kids and a full time
- a medical condition
- work 2 jobs because economy is fucked.
- can’t drive of old age.
And a million other reasons. In old times with a working community, delivery was a luxury, in “modern” days, it is often a necessity for lack of alternatives.
When was the last time you offered the old people down the road if they need help?
On demand delivery where you pay a premium of 30-40% over the actual cost (sometimes even more) is definitely a luxury to me. I can probably afford to do this but I still do pick ups along with my other errands. Only is rare circumstances I get one off deliveries and it hurts me to see the cost each time I look at it!
Doing it regularly is probably wasting money especially in this economy.
Kids + full time - pick up the food on your way home? Medical condition - arrange for a routine cost effective delivery (like those meal delivery services who tend to deliver on their routes for free even?) work 2 jobs - pick up along the way somewhere can't drive? - use that routine delivery or find a way to cook or use a weekly meal delivery service etc.
But buying one off every other day paying the premium seems definitely a luxury. YMMV.
There are more social services for people that need this than there were in the 70s and volunteering appears roughly flat since then.
Meanwhile, people have been getting old, having kids, two jobs, medical conditions and so on for a little while now. A tremendous amount of America isn't even in a food delivery area unless you count McDonald's.
Eating out is a luxury. Getting that food delivered even more so. This isn't about basic needs.
>volunteering appears roughly flat since then.
>people have been getting old, having kids, two jobs, medical conditions and so on for a little while now.
well you explained the phenomenon pretty concisely.
Indeed, in the good ol days people were worse off. But I suppose you forgot to quote that part.
Having nicer products or the overall state of technology being greater now than before doesn't mean people are automatically overall better off. Yes we can cure more cancers now. Yes we have less lynchings now, by the public or police. But people are, objectively, less financially secure. Cost of home ownership being 5x median income now vs 3.2x in the 90s, trending higher decade on decade, is a decent enough single number to point to. The long and short of it is that these benefits are being concentrated, as anything regarding wealth inevitably is, in the hands of a few.
https://www.jchs.harvard.edu/sites/default/files/reports/fil...
You forgot to mention it so I could quote it.
Nonetheless, I don't see the productivity in arguing over generational lifestyle here. I just wanted to highlight that making people work more than ever means less people volunteer. Whether that is a good thing or not is up to the reader.
> There are more social services for people that need this than there were in the 70s
Less people aren't volunteering. Flat means stationary. On working hours, it's not significantly different either.