DoorDash and Societal Arbitrage
To me, this is the key claim of the article:<p><i>This is not a genuine partnership, it’s extractive.</i><p>Is DoorDash extracting money from its users, the restaurants and the delivery drivers? Or is it actually providing something of value?<p>To me, the delivery apps like DoorDash and Uber Eats just work a lot better than calling up restaurants for delivery did in the pre-app era. Maybe the drivers are underpaid, maybe the restaurants are underpaid, maybe the food costs too much, but even if they end up charging more money, are they really going to go away like Groupon did? I don&#x27;t think so, the underlying product is just too valuable. So, I don&#x27;t agree with this claim. There&#x27;s a real partnership here. It just hasn&#x27;t settled down.<p>As long as the business space is real, DoorDash and Uber Eats and the others are just going to fight tooth and claw to win it. That means discounting the real price, that means raising money at whatever valuation they can get, that means turning the screws on all partners to squeeze out more money. All of this seems like craziness, and it is, but it&#x27;s craziness in pursuit of winning a prize that really does exist.<p>Some industries, like the music industry, once they settle down it turns out that one of the players has very little pricing power. I think that might happen here for drivers and for the sort of restaurant that isn&#x27;t differentiated. But like music, it won&#x27;t just go away, it&#x27;ll be a new business structure that perhaps dominates the industry.