As a restaurant owner, I disagree. It’s shitty of them to charge a hidden fee like this
It’s really easy to update prices. Sysco, the bulk supplier of >70% of US restaurants, provides a very easy tool that can update your prices automatically based on increased wholesale price. US Foods has a similar tool
The biggest pain in the ass there is printing new menus. If you’re doing 1 page, the whole thing really isn’t any worse. Dealing with shitty printers is the real nuisance. Maybe if it were a sticky note on the menu or something, I could understand it. If they’re re-printing the menu, it’s bullshit
It’s shitty to those of us that are honest. Customers will see another pizza place selling larges for $15.49, and my prices at $16 and go with the other one because it’s cheaper, despite the fact that after the 5% mine is cheaper. Seriously, I’ve had customers tell me that type of thing
I don’t want to do the hidden fees, because I hate them personally, but I know I’m giving up some sales not tacking on some bullshit charge
Related rant: For DSP delivery, like Doordash, I charge regular menu price, but charge $3.50 for delivery. I know I’d get more marking up the menu 20-30% and offering “free” delivery. I can see the cart abandonment rate. I hate the dishonest business model though
I love that you try to run a honest business, it’s rare to see nowadays. But:
Sysco, the bulk supplier of >70% of US restaurants
Has the US completely given up on this market competition thing? Why is that in every US market, there are 1-3 players with 70-90% market share? I mean based on this, the only thing you need for inflation to spike is for companies like Sysco to raise prices.
It’s not really that we gave up, it’s just that the little guys can’t compete with the big guys, and the big guys all merged together and collude to make everything as expensive as possible. I try to support smaller businesses when I can but they are usually significantly more expensive and I can’t always afford it. There’s not really a solution for regular people when our politicians are all bought and paid for.
I love that you try to run a honest business, it’s rare to see nowadays
Thanks, I genuinely appreciate that. The restaurant is just a side project, and I only almost break even on it, so people appreciating a straight-forward business is the main joy I get out of it
Has the US completely given up on this market competition thing?
Yes. Over 90% of the market is consolidated into 3 major players: Sysco, US Foods, and Performance Foods. Given how monopolistic American markets are, you can probably guess what I’m going to say next: US Foods and Performance Foods are exploring a merger. Given the regulatory landscape and current US politics, I expect a proposed merger to eventually go through
The US restaurant market is going to get even more consolidated under only a few distributors, which will mean restaurant prices are going to keep rising
Silver lining: That consolidation has allowed a much larger R&D budget than before. Some of the new coatings and things coming out are crazy good. I did a tasting with my Sysco rep, and the frozen french fries are insane now. Fresh cannot realistically compete, which means less food waste and a better end product. As long as they don’t start filling the fries with fake shit, it’s great
While there is a lot of genuinely anti competitive behavior in the market (e.g. huge mergers that should never be allowed).
The reality of a lot of “competition” as we tend to describe it in capitalist economics is that someone usually wins. At least for a while. It’s often not related to their core competency or quality either. It’s often about financial leverage, regulatory favors, technical advantages, etc…
For example, Taxis weren’t crushed by Uber because of better drivers, fuel efficiency, or more comfortable rides. It was the challenge of hailing a cab, the regulatory barriers of taxi drivers getting licensed (which Uber just didn’t bother with), commercial insurance, and the ability of Uber to operate at a loss while building their market share. Taxis had a 100 year head start in this competition, and they were pretty much obsolete in a few years. They lost due to competitive disadvantages they didn’t even know they had. And Taxis still exist, they’re just fighting for the scraps left by Uber and Lyft.
I’m experiencing this first-hand with my restaurant. In-house delivery drivers cannot compete with Uber Eats/Doordash/etc. because they don’t need to make money or even break even, don’t have to pay for insurance, and don’t have to deal with liability
One difference, though, is there is going to be a lot of experienced drivers in the workforce when Uber Eats/Doordash/etc. try to jack up prices. I can relatively easily swap to in-house deliveries again, whereas taxis can’t just start back up
I don’t know if this is a common practice but when we order we often fill a cart a few times with a few different combinations and a few different locations just to compare options. I don’t know how much info you get but I wouldn’t scrutinize that metric too harshly.
If that is common practice it would seem to indicate that “cart abandonment rate” is actually a very important metric, since users often abandon carts and so a restaurant needs something about the menu/presentation that makes people abandon them less and “wins” a larger share of the market of users on the platform.
My metrics depend on the source. On my own website, I could theoretically see precisely what’s happening. I’m too lazy for that, so I just run a DB query to see how many carts have things in them without ordering vs. number of orders today
For Doordash/Uber Eats/Toast/Etc. carts, I generally get basic stats like % of carts abandoned (someone added food items, but never ordered from anywhere), and % of carts ordered elsewhere (they added items from multiple restaurants, then didn’t order from mine)
They give me a baseline to compare against, but I think it’s a national average, which isn’t useful. When I signed up, they gave me a few hundred dollars in credits, so I applied them towards offering free delivery for the first week or so, which is the main metric I compare it to
Broadly though, I agree with you. My business partner always looks as those as all potential lost customers, and I have to remind him plenty of people are just comparing multiple restaurants. I do also wonder how many are just bots as well
Just so you’re aware, doordash/Uber are known for increasing the single item price after you’ve set them. Say you set a pizza for 12$, they’ll charge 15$ just for the item, PLUS all their other fees.
I don’t believe they’re able to under my DSP contract, but that’s a good reminder to keep checking it. Contracts only mean as much as your ability to enforce them, and for a small business is basically zero
I bet I could write a quick web scraper on a cron job to pull the prices each week. Thanks!
for the last several years every time i felt a craving for some food delivered, i’ve noped right out on the checkout screen with the final price with delivery fee and knowing that doesn’t include tip. not fucking worth it, i’ve got other things to eat
edit: the last time i did this, the delivery fee was ~$2.00. is $3.50 standard now? lol…no.
God, if it was just $3.50 Id actually get delivery once in a while. Where I am it ends up being closer to 30% of the meal because of delivery surcharge + delivery fee + tip.
I saw everything you put in your cart. I had toapologize to that pizza dough before I threw it away :'( (jk, Toast only gives me broad metrics)
edit: the last time i did this, the delivery fee was ~$2.00. is $3.50 standard now? lol…no
I can’t speak for every restaurant, but I pay a flat rate to Toast per delivery, and they fulfill for all the services I deliver through. It costs me $7.00, I split the charge with the customer and charge $3.50. I’m not a fan of the fact delivery is “cheaper” (in the sense I have a lower profit margin) than take-out, but the economic realities and my business partner overruled me on this one
One thing to note, most places will bake the delivery charge into other aspects of the price. Commonly in just the “menu” price, to make it feel like you’re only paying the regular price and get free delivery. Charging $2 for delivery means they’re probably adding in $5 somewhere else (or they’re a giant corporation operating at a loss to take market share and put small restaurants out of business, but now I’m going into yet another rant)
Yeah one of my friends and his wife orders shit off there almost every time we hang out and the prices are always crazy to me. I’ll just go get it myself. They’re always having money problems on top of it.
I wish I were in your market then. Where my restaurant is, most of the places on Doordash and other DSPs are cheaper or the same as in-restaurant prices (usually thanks to coupons or other “temporary” discounts). These platforms have huge amounts of venture capital and generally operate at a loss
As a pizza place, it makes it incredibly difficult to compete. Doordash and Uber Eats heavily subsidize the actual operating cost of their platforms, making it a generally cheaper option
Doesn’t help that they don’t have to follow the same regulations we would for traditional delivery drivers. I have to have insurance for drivers. Delivery platforms do not, in my state. If my driver gets injured in an accident, I’m liable. If a Doordash driver gets in an accident, Doordash just wipes their hands of the situation
For those reasons, I had to go with a DSP (Toast delivery) instead
I’m lucky the restaurant is just a side project and I still have my day job. Only reason we haven’t gotten squeezed out yet
As a restaurant owner, I disagree. It’s shitty of them to charge a hidden fee like this
It’s really easy to update prices. Sysco, the bulk supplier of >70% of US restaurants, provides a very easy tool that can update your prices automatically based on increased wholesale price. US Foods has a similar tool
The biggest pain in the ass there is printing new menus. If you’re doing 1 page, the whole thing really isn’t any worse. Dealing with shitty printers is the real nuisance. Maybe if it were a sticky note on the menu or something, I could understand it. If they’re re-printing the menu, it’s bullshit
It’s shitty to those of us that are honest. Customers will see another pizza place selling larges for $15.49, and my prices at $16 and go with the other one because it’s cheaper, despite the fact that after the 5% mine is cheaper. Seriously, I’ve had customers tell me that type of thing
I don’t want to do the hidden fees, because I hate them personally, but I know I’m giving up some sales not tacking on some bullshit charge
Related rant: For DSP delivery, like Doordash, I charge regular menu price, but charge $3.50 for delivery. I know I’d get more marking up the menu 20-30% and offering “free” delivery. I can see the cart abandonment rate. I hate the dishonest business model though
I love that you try to run a honest business, it’s rare to see nowadays. But:
Has the US completely given up on this market competition thing? Why is that in every US market, there are 1-3 players with 70-90% market share? I mean based on this, the only thing you need for inflation to spike is for companies like Sysco to raise prices.
It’s not really that we gave up, it’s just that the little guys can’t compete with the big guys, and the big guys all merged together and collude to make everything as expensive as possible. I try to support smaller businesses when I can but they are usually significantly more expensive and I can’t always afford it. There’s not really a solution for regular people when our politicians are all bought and paid for.
Thanks, I genuinely appreciate that. The restaurant is just a side project, and I only almost break even on it, so people appreciating a straight-forward business is the main joy I get out of it
Yes. Over 90% of the market is consolidated into 3 major players: Sysco, US Foods, and Performance Foods. Given how monopolistic American markets are, you can probably guess what I’m going to say next: US Foods and Performance Foods are exploring a merger. Given the regulatory landscape and current US politics, I expect a proposed merger to eventually go through
The US restaurant market is going to get even more consolidated under only a few distributors, which will mean restaurant prices are going to keep rising
Silver lining: That consolidation has allowed a much larger R&D budget than before. Some of the new coatings and things coming out are crazy good. I did a tasting with my Sysco rep, and the frozen french fries are insane now. Fresh cannot realistically compete, which means less food waste and a better end product. As long as they don’t start filling the fries with fake shit, it’s great
While there is a lot of genuinely anti competitive behavior in the market (e.g. huge mergers that should never be allowed).
The reality of a lot of “competition” as we tend to describe it in capitalist economics is that someone usually wins. At least for a while. It’s often not related to their core competency or quality either. It’s often about financial leverage, regulatory favors, technical advantages, etc…
For example, Taxis weren’t crushed by Uber because of better drivers, fuel efficiency, or more comfortable rides. It was the challenge of hailing a cab, the regulatory barriers of taxi drivers getting licensed (which Uber just didn’t bother with), commercial insurance, and the ability of Uber to operate at a loss while building their market share. Taxis had a 100 year head start in this competition, and they were pretty much obsolete in a few years. They lost due to competitive disadvantages they didn’t even know they had. And Taxis still exist, they’re just fighting for the scraps left by Uber and Lyft.
I’m experiencing this first-hand with my restaurant. In-house delivery drivers cannot compete with Uber Eats/Doordash/etc. because they don’t need to make money or even break even, don’t have to pay for insurance, and don’t have to deal with liability
One difference, though, is there is going to be a lot of experienced drivers in the workforce when Uber Eats/Doordash/etc. try to jack up prices. I can relatively easily swap to in-house deliveries again, whereas taxis can’t just start back up
We’ve been badly in need of some widespread trust busting for a few decades now
I don’t know if this is a common practice but when we order we often fill a cart a few times with a few different combinations and a few different locations just to compare options. I don’t know how much info you get but I wouldn’t scrutinize that metric too harshly.
If that is common practice it would seem to indicate that “cart abandonment rate” is actually a very important metric, since users often abandon carts and so a restaurant needs something about the menu/presentation that makes people abandon them less and “wins” a larger share of the market of users on the platform.
My metrics depend on the source. On my own website, I could theoretically see precisely what’s happening. I’m too lazy for that, so I just run a DB query to see how many carts have things in them without ordering vs. number of orders today
For Doordash/Uber Eats/Toast/Etc. carts, I generally get basic stats like % of carts abandoned (someone added food items, but never ordered from anywhere), and % of carts ordered elsewhere (they added items from multiple restaurants, then didn’t order from mine)
They give me a baseline to compare against, but I think it’s a national average, which isn’t useful. When I signed up, they gave me a few hundred dollars in credits, so I applied them towards offering free delivery for the first week or so, which is the main metric I compare it to
Broadly though, I agree with you. My business partner always looks as those as all potential lost customers, and I have to remind him plenty of people are just comparing multiple restaurants. I do also wonder how many are just bots as well
Good, I would wonder the same.
Just so you’re aware, doordash/Uber are known for increasing the single item price after you’ve set them. Say you set a pizza for 12$, they’ll charge 15$ just for the item, PLUS all their other fees.
They also calculate tips by including taxes and all their fees. Actual cost ends up about 200% the original menu price. Gah.
I didnt have an actual point, just complaining.
Yeah, I feel ya. I absolutely loathe having to use them, an miss when pizza places had their own delivery crew
I don’t believe they’re able to under my DSP contract, but that’s a good reminder to keep checking it. Contracts only mean as much as your ability to enforce them, and for a small business is basically zero
I bet I could write a quick web scraper on a cron job to pull the prices each week. Thanks!
for the last several years every time i felt a craving for some food delivered, i’ve noped right out on the checkout screen with the final price with delivery fee and knowing that doesn’t include tip. not fucking worth it, i’ve got other things to eat
edit: the last time i did this, the delivery fee was ~$2.00. is $3.50 standard now? lol…no.
God, if it was just $3.50 Id actually get delivery once in a while. Where I am it ends up being closer to 30% of the meal because of delivery surcharge + delivery fee + tip.
Why would it not cost 3.50 for a taxi for your burrito
that’s a great question. but the answer doesn’t matter, because i’m not paying it.
I saw everything you put in your cart. I had toapologize to that pizza dough before I threw it away :'( (jk, Toast only gives me broad metrics)
I can’t speak for every restaurant, but I pay a flat rate to Toast per delivery, and they fulfill for all the services I deliver through. It costs me $7.00, I split the charge with the customer and charge $3.50. I’m not a fan of the fact delivery is “cheaper” (in the sense I have a lower profit margin) than take-out, but the economic realities and my business partner overruled me on this one
One thing to note, most places will bake the delivery charge into other aspects of the price. Commonly in just the “menu” price, to make it feel like you’re only paying the regular price and get free delivery. Charging $2 for delivery means they’re probably adding in $5 somewhere else (or they’re a giant corporation operating at a loss to take market share and put small restaurants out of business, but now I’m going into yet another rant)
Yeah one of my friends and his wife orders shit off there almost every time we hang out and the prices are always crazy to me. I’ll just go get it myself. They’re always having money problems on top of it.
I wish I were in your market then. Where my restaurant is, most of the places on Doordash and other DSPs are cheaper or the same as in-restaurant prices (usually thanks to coupons or other “temporary” discounts). These platforms have huge amounts of venture capital and generally operate at a loss
As a pizza place, it makes it incredibly difficult to compete. Doordash and Uber Eats heavily subsidize the actual operating cost of their platforms, making it a generally cheaper option
Doesn’t help that they don’t have to follow the same regulations we would for traditional delivery drivers. I have to have insurance for drivers. Delivery platforms do not, in my state. If my driver gets injured in an accident, I’m liable. If a Doordash driver gets in an accident, Doordash just wipes their hands of the situation
For those reasons, I had to go with a DSP (Toast delivery) instead
I’m lucky the restaurant is just a side project and I still have my day job. Only reason we haven’t gotten squeezed out yet