- Hey guy, welcome back to another video
where I say a bunch of numbers
and like three jokes.
Sorry in advance.
This isn't gonna be one of my wacky silly videos
where I put on a clown suit and get bonked in the head.
I want to talk about something
that's been on my mind a lot lately.
So one of the many byproducts of everything
that's gone on this year is it food delivery apps
are killing it.
It turns out when you don't want to leave your home,
it's pretty convenient to have a different person
deliver meals straight to your door and into your mouth.
I've certainly fallen into that trap a number of times,
even before this year.
Picture this relatable scenario.
It's almost 3:00 PM.
You should have eaten lunch already,
but you haven't because you got caught up in work.
So you're starving.
I think a burrito sounds good.
I'll just do Chipotle.
I know if I run in and pick it up,
it'll only be like eight bucks
but I really don't have time for that today.
So let's do delivery.
All right, I got the bowl.
"Add 3.95 to avoid small cart fee."
Fair enough. I don't want to have to pay another fee.
So let's do Chips and Guac.
I'm pretty hungry.
All right, everything looks good.
And it is $21.
That's not even including the tip.
So it's actually gonna be closer to $30
for one person ordering fast food.
You know what? I'm being greedy here.
I don't need the chips.
I'll go ahead and take those off.
And that'll bring our total off all the way down to $19,
because the small cart fee
is just a little bit less than the Chips and Guac were.
And that's not even mentioning the fact
that all of the base item prices
are marked up from what they would be in the store.
Here's the same exact order from the same location,
but through Chipotle's website.
Everything on here is more expensive,
but sometimes in a way where you don't even notice.
Now, in general, I would say I'm definitely on board
with spending a little bit more for the sake of convenience.
It's one of the simple joys you get as an adult,
the whole treat yourself mentality,
spending more than you have to on something
and pretending it doesn't bother you.
Hell, that's what life is all about.
But if I can, I do want to try to make sure
that extra money is going to the right place.
Giving a big tip is always nice,
because I know that's going straight to the person
who needs it and who's working hard to earn it.
Paying a delivery fee,
a small cart fee,
and a nebulous service fee,
which can add up to almost double the cost of the meal,
and all go to a company
that's acting only as the middleman is not nice.
And that's all working under the assumption
that the service itself is actually good.
How many times have you tried to Postmates something
and they mess up your order,
or it arrives cold,
or they send it to the wrong address,
mark it as delivered,
and then your neighbor won't answer the door
when you go and ask for it back?
I wish that number was zero,
but wishes don't always come true.
Food delivery apps are an unbelievably expensive service
that also happened to be very bad most of the time,
but at least your order
is helping support a local restaurant
during a tumultuous time, right?
Well, yes, sort of,
because for all the service fees
and extra charges that get thrown onto the customer,
almost none of that goes back to the restaurant itself.
In fact, the number varies from city to city,
and depending on which app you're using,
but some restaurant owners have reported
that DoorDash has charged as much as 40% commission
on orders placed through their app.
As it is, restaurant margins are extremely thin.
You have food costs, employees to pay, a building to rent.
It's just a really difficult industry to succeed in.
And when these middleman delivery apps come in
and take a huge cut, it can be devastating.
Now at this point, I think the reasonable response
that a lot of people have as well,
okay, if these delivery apps are so bad to work with,
if they take such a big cut,
why do the restaurants keep using them?
And it's because they have to.
Unfortunately, right now
there's not really a valid alternative.
You either give all of your profits to Uber Eats
or you risk going out of business.
The owner of a barbecue place
in California says he simply can't afford
to hire his own drivers,
but 80% of his orders are now delivery.
So he's kind of in a bind.
I think it is worth noting
that these delivery apps do add a lot
of visibility and marketing to local restaurants.
I've discovered several great food spots
around me just by browsing DoorDash.
That in itself can be very valuable.
Another benefit is that any mishaps
that happen with the order
can be handled through the third-party app.
So the restaurants who are already busy
fulfilling other orders,
you don't have to worry about processing refunds.
When you get the wrong food delivered to your house,
you usually just contact Postmates
and they resolve it directly.
However, and this is a good point I read in this article,
in that situation,
you're probably more likely to blame the restaurant
than you are the delivery app,
even if it wasn't the restaurant's fault.
And even though they made a mistake,
you'll probably keep using Grubhub.
You'll just never order from that restaurant again,
especially if it was your first time trying them out.
Also due to the lack of communication between the apps
and the restaurants,
DoorDash doesn't know when a store
has run out of a certain product.
So you'll have customers that try to order a brisket,
and think they've done so successfully,
until 15 minutes later, they get a call
from the restaurant telling them they're sold out.
Again, in that situation,
they're more likely to be frustrated
with the restaurant, even if it was DoorDash's fault.
So there are both benefits
and downsides to doing business through these apps.
But like I said,
the restaurants just really don't have a choice right now.
And the apps are very well aware of this,
because back in March and April, many of them took advantage
of that desperation by hiking commission fees,
which led to lawsuits and eventually lawmakers
stepping in to impose caps in certain States.
And if you can believe it,
that wasn't even the first time DoorDash
has done something exploitive.
Last year they got a lot of backlash
for using customer tips to subsidize a driver's pay.
In other words, if a Dasher was going to make $6
off an order and then you tip them $5,
they'd still make $6,
but your tip just came out of what DoorDash
was going to pay them.
So in a way you're almost tipping DoorDash itself there,
even though they're tipping policy
is that 100% of a tip goes directly to the driver.
Just another example of how sometimes words
can be both true and totally false at the same time.
I think they have since changed this policy.
I saw articles saying they did,
but I still seen recent comments
from drivers mentioning this.
So I'm not actually 100% percent sure.
Regardless, it's always better to try and tip in person
with cash if you can,
because it'll maximize how much the drivers
are getting paid.
And we're trying to support them here,
not the giant corporation.
Here's something crazy though, in spite of the fact
that they charge these exorbitant fees
and come up with very creative ways
to dish out as little money as possible,
DoorDash has still lost $150 million this year.
I'm almost in disbelief as to how that's possible,
but I guess they're taking a page
out of Hard Rock Nick's playbook.
You gotta spend money to lose money (laughs).
Now back on the topic of delivery drivers,
it seems like each app has its own pros and cons
that can make it frustrating
or even less profitable to work with.
And even with all the resources available online,
it's pretty hard to figure out which one is the best.
- Postmates' just not cutting it.
- Okay, so Postmates is the worst one?
- With all things said, Postmates is the official winner.
- I mean, Postmates is the best one.
- Number one is DoorDash.
- Sorry, no, door dash is the best one.
- This is my first experience with DoorDash.
Eh, it was all right.
- The best one at sucking, I meant.
It's actually a very bad.
- I like DoorDash a lot better.
- DoorDash is very good.
- I'm actually getting pretty frustrated with DoorDash.
- Oh, no. - DoorDash for the win.
- That's true.
It seems like the most consistent issues
that drivers have is the lack of transparency
coming from the app.
Whether it's not knowing how much
you're gonna make from each order,
or how the commission structure is even split up.
It can also be even more annoying than that.
Like for a long time,
Uber Eats wouldn't tell the driver
where they had to deliver the food
until they had already accepted the order
and gotten to the restaurant.
So then you might end up driving for like 40 minutes
just to make enough money to pay
for the gas you spent on that trip.
And then with DoorDash,
another issue seems to be that
unless it's busy in your area,
you can't just hop in your car and start driving,
you have to schedule your hours in advance,
which can be not ideal.
And it removes one of the main appeals
of working for these companies, which is the flexibility.
And on top of everything else,
since these are such massive companies,
it can be extremely difficult for drivers
to get in contact with the company they work for.
Postmates seems to be the most notorious for this.
Sometimes the driver will go to pick up an order
from a restaurant only to find out it's closed.
And instead of paying them
at least something for their time,
like the other apps do,
Postmates is just like "Sorry.
Well, where are you waiting for?
Go pick something else up."
In a perfect world,
restaurants wouldn't have to turn to these third party apps
to handle this side of their business.
And they could just afford to pay drivers directly
and give them more benefits and better pay
than what they get from like Grubhub.
But that's just not realistic.
Even the apps that do deliver
don't usually have a slick app that you can order on
in a couple of minutes.
You gotta call them,
and talk to a person on the phone,
and they can barely hear you
'cause there's kitchen noise behind them.
So you hope they get everything right,
but you won't be 100% sure until it shows up at your door.
I get why people prefer the apps.
Convenience is very convenient.
But one recommendation I do have
if you're trying to find a new place to eat,
and you want to find something local,
open up Postmates,
go on the DoorDash app,
see if you find something you like,
and then Google that restaurant,
and see if they have a website.
Who knows, maybe they're just down the street
and you can go pick it up,
or maybe they do delivery themselves.
There's a sushi place near us
that started doing delivery back in April.
And it's perfect,
because they get all of the money that we give them
and we save money
because we're not paying random service fees.
I will say though to be careful when you're Googling,
because some of these apps have actually paid a lot of money
to make it seem like going through them
is the only way you can get delivery
from certain restaurants.
But sometimes after just a few more seconds of searching,
you'll find a better alternative
that the restaurant actually prefers you use,
because it won't eat into their profits.
These delivery apps rely on us doing
as little thinking as possible.
They know that we just want to click like three times,
so we can spend the next 20 minutes
watching a little car drive on a map towards our house.
But sometimes that fourth click
will cut them out of the equation altogether,
and that's better for everyone.
I know that none of what I said here
was groundbreaking information.
Everybody knows that delivery apps charge too much
and aren't always the best to work for.
I guess the point I'm really trying to make with this video
is that it's such a weird industry,
because it's absolutely necessary,
and yet no one's really benefiting from it.
The consumers need it,
which is why we're willing to pay extra service fees.
The restaurants need it,
which is why they're willing to pay extra service fees
and the delivery apps profit off both of those things,
while somehow still losing millions of dollars every month.
Maybe a lot of this will level off eventually.
I don't know.
I'm sure a lot of that money goes to marketing.
If you've ever seen a commercial
that seems to be just for food in general,
it's probably DoorDash.
But another big chunk of their profits
went towards something highly controversial,
which was convincing Californians
to support a legislature
that lets them avoid treating their drivers like employees.
I have seen drivers on both sides of this argument.
A lot of them say they should deserve benefits
like employer health insurance and paid sick leave
While some of them don't mind
being treated like a gig worker,
because it comes with so much flexibility.
Regardless, when a bunch of companies
spent $300 million on propaganda
so they don't have to treat their drivers better,
it's kind of a red flag.
And between that and the opportunistic price gouging,
it makes it really tough to feel good
about supporting these apps,
especially when, like we talked about,
you have to pay more money,
the restaurants have to pay more money,
and these delivery apps might all go bankrupt anyway.
I guess I shouldn't be totally surprised.
There's this whole side of Silicon Valley
that I will never understand,
where you have a company that's valued at $12 billion,
but they're constantly just losing money,
like Netflix, for example.
They spend billions more dollars every year than they made.
I may be dumb,
but don't you have to like stop doing that at some point?
Eventually you're gonna run out.
And if food delivery apps and an at-home streaming service
can't be profitable during a time
where there are circumstances
that necessitate the use of both of those things,
when will they ever be?
So I just wonder what the future
of this industry looks like,
if there's a bubble that will eventually pop
if all of the people funding these companies
eventually stopped doing that,
and they cease to exist.
That wouldn't be good for anyone,
not for the consumers who rely on it,
not for the drivers who would now be unemployed.
But the trajectory I see here
is that only one of these companies will reign supreme,
and then they'll use their new found monopoly
to hike up all their prices
until it gets to the point
where no one wants to use them anymore
because it costs $50 to deliver a taco.
Sorry, I know this was a really unorganized video.
I just had to get this rant off my chest.
While we're on the topic of delivery services though,
I wanna ask you guys a question.
So I've noticed that even though I always used the Lyft,
I would still tell people like,
"Oh, I'll Uber there."
Right? Uber was always the verb in that sentence.
So I'm curious for you guys,
when you get delivery to your house,
which company is the verb that you use?
Do you say, "Oh, I'm gonna Postmates Chili's?"
Or like, "Grubhub'd Red Lobster."
Probably not that one, but I figured I'd still ask.
So comment your answer down below if you want.
I'll also probably do a Twitter poll about this,
because this is the kind of meaningless shit
that gets me out of bed in the morning.
Anyway, I got to go DoorDash Dick's Sporting Goods,
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Now, back to my stunt double,
who has not been doing very many stunts lately.
If you want me to do a stunt, then write one into the video.
Sorry, guys.
Ooh, sounds like my Dick's just got here.
So I'm gonna go play with that.
Thank you all so much for watching today's video.
I hope you all had a wonderful holiday weekend.
Maybe you didn't get to spend it
with your family this year,
but sometimes that's okay.
It's officially Christmas season now,
which means I will be back soon
with a fun idea that I came up with for a video.
In the meantime,
if you're watching this video the day it came out,
I currently have a Cyber Monday sale going up
on my merchant store.
Lots of deals on there
that you can choose to either take advantage of
or fully ignore.
But that's it. See you next time.
And Merry Christmas.