- 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
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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.
