On: Just Eat Takeaway to acquire Grubhub for $7.3B

[hedora]

When you order through a delivery service, the restaurant is generally paid less than their normal menu price, and none of the tips go to the kitchen staff.

In addition to charging the restaurant, the delivery service charges the customer a higher price than the restaurant would. They add delivery fees and service fees. On top of that, the online menus in the delivery service apps often have higher prices than the restaurant’s “real” menu.

Restaurants often negotiate special deals with the delivery services, so all these details can vary. However, delivery app margins are much lower than carry out or dine in margins.

[aesyondu → hedora]

Yes, but a restaurant wouldn't be entering into these special deals if it wasn't beneficial to them as well. Even if the margins are much lower, it could be offset by the increase in number of customers/orders.

[lz400 → aesyondu]

I've talked to people who run restaurants and in their words uber eats is not worth it economically. They just do it, barely breaking even, as a marketing thing, hoping people will like the food and go to the real place.

[AgloeDreams → lz400]

Bingo, plus if they don't do it, their competitors will and then nobody comes to them.

[sokoloff → AgloeDreams]

If all that's true, then it does seem like it's worth it economically. Economics in business goes well beyond the simple transaction-level view.

[JAlexoid → hedora]

So... By spending more into the economy you're being selfish? Since when is giving people money for their services considered selfish?

[raziel2p → JAlexoid]

Where did they say "selfish"?

This wouldn't be a problem if it was a case of choosing between A) paying $15 to the restaurant or B) $15 to the restaurant plus $5 in delivery.

However, in reality you're choosing between paying A) $15 directly to the restaurant or B) $12 to the restaurant and $8 for delivery.

Hopefully the added volume of orders makes up for the $3 (made up numbers by the way), but I'm not so sure.

[sokoloff → hedora]

When I go pickup food on my own, there’s still no tip money flowing to the kitchen (or anyone else).

[slfnflctd → sokoloff]

Restaurants handle this issue in many different ways. I have been to several who explicitly state that all tips are divided & shared among all employees, and I think this is a good model. I've also seen one with a separate tip jar for kitchen staff, which may be a better option in some places. Really, why should the server make more than the cook or the dishwasher? Are they actually working harder? [I know, their wages are often structured differently, but I question whether they should be.]

[joncrane → sokoloff]

At least it still avoids all the other problems, not to mention the domain squatting, misrepresentation of search results, and of course the upcharge on your end and the downcharge on the restaurant's end.