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Food Delivery Apps: Last Week Tonight with John Oliver (HBO)

LastWeekTonight・25 minutes read

Food delivery apps have seen significant growth, with sales nearly doubling during the pandemic, but they charge high commissions impacting restaurant profits and sometimes list businesses without permission. Delivery workers face risks and expenses, relying heavily on tips, while companies like DoorDash promote gig work as a flexible side job but face criticism for their impact on the industry.

Insights

  • Delivery apps have seen a surge in popularity, especially during the pandemic, with significant growth in sales, but they often charge high commissions to restaurants, impacting their profits and leading to increased prices for customers.
  • While delivery apps like DoorDash promote gig work as flexible, many delivery workers face risks, expenses, and lack of benefits, with algorithm-driven systems dictating their behavior and earnings, highlighting the contentious relationship between the platforms, restaurants, and workers.

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Recent questions

  • How have food delivery apps impacted restaurants and delivery workers?

    Food delivery apps have revolutionized the way people order food, offering convenience and accessibility. However, these apps have also had significant impacts on restaurants and delivery workers. Restaurants often face high commission fees, sometimes up to 30% of an order, which can eat into their profits. To offset these fees, some restaurants increase prices on apps, leading to higher costs for customers. Delivery workers, often classified as independent contractors, are responsible for their own expenses like bikes and may lack health insurance. They heavily rely on tips, which are not guaranteed, and are subject to app algorithms dictating their behavior, speed, and wages. Overall, the business model of food delivery apps has faced criticism for its effects on both restaurants and delivery workers.

  • What are the risks associated with being a delivery worker?

    Delivery workers face various risks while on the job, including dangers like traffic accidents, robberies, and extreme weather conditions. They are often independent contractors, lacking health insurance and having to pay for work-related injuries out of pocket. Additionally, the algorithm-driven system in delivery apps can lead to unsafe practices, such as speeding or compromising safety for more orders. Negative reviews can impact future opportunities for delivery workers, who heavily rely on tips as a significant portion of their earnings. Despite the risks involved, many individuals still choose to work as delivery workers due to the flexibility and potential income opportunities.

  • How do food delivery apps impact the pricing of food for customers?

    Food delivery apps have influenced the pricing of food for customers in various ways. Due to the high commission fees charged by these apps, some restaurants increase prices on the platforms to offset these costs. As a result, customers ordering through these apps may end up paying higher prices compared to dining in or ordering directly from the restaurant. This pricing strategy is implemented to maintain the restaurant's profitability while utilizing the convenience and reach of food delivery apps. While the added cost may deter some customers, the overall convenience and accessibility of ordering through these apps continue to attract a large user base.

  • What are the criticisms surrounding the business model of food delivery apps?

    The business model of food delivery apps has faced significant criticism for its impact on restaurants and delivery workers. One major criticism is the high commission fees charged to restaurants, sometimes up to 30% of an order, which can significantly impact their profits. Additionally, delivery workers, often classified as independent contractors, face risks like traffic accidents, robberies, and extreme weather conditions without health insurance coverage. The algorithm-driven system in these apps can lead to unsafe practices and inconsistent wages for delivery workers. Despite the convenience they offer, food delivery apps have been scrutinized for their effects on the restaurant industry and the well-being of delivery workers.

  • How do food delivery apps rely on tips for delivery workers?

    Food delivery apps heavily rely on tips as a significant portion of delivery workers' earnings. While tips can make up a substantial part of their income, they are not guaranteed and are subject to various factors like customer satisfaction and order size. Delivery workers, often classified as independent contractors, may lack health insurance and have to pay for work-related injuries out of pocket. The reliance on tips adds an additional layer of uncertainty to the income of delivery workers, who are also subject to app algorithms dictating their behavior, speed, and wages. Despite the risks and challenges, many individuals continue to work as delivery workers due to the potential income opportunities and flexibility offered by these apps.

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Summary

00:00

Food delivery apps impact restaurants and workers.

  • Food delivery apps have become popular, featuring ads with celebrities like Jennifer Aniston and Big Bird.
  • Special menus like the "bottom-friendly menu" from Postmates cater to specific groups like the LGBTQ+ community.
  • Delivery apps are used for various reasons, including convenience for busy individuals or those under the influence.
  • During the pandemic, food delivery app sales nearly doubled, showcasing their significant growth.
  • Delivery apps charge restaurants high commissions, sometimes up to 30% of an order, impacting their profits.
  • Some restaurants increase prices on apps to offset fees, leading to higher costs for customers.
  • Apps like GrubHub have been accused of listing restaurants without permission, causing issues for businesses.
  • Delivery workers are often classified as independent contractors, responsible for their expenses like bikes.
  • Companies like DoorDash promote gig work as a flexible side job, but for many, it's their primary income source.
  • The business model of food delivery apps has faced criticism for its impact on restaurants and delivery workers.

14:23

Challenges and Risks in Delivery Gig Economy

  • The total cost of a bike, battery, backpack, and helmet for a delivery worker amounts to $2,500.
  • Delivery workers are subject to app algorithms dictating behavior, speed, and wages, with negative reviews impacting future opportunities.
  • The algorithm-driven system in delivery apps can lead to unsafe practices like speeding or compromising safety for more orders.
  • Delivery jobs can be risky, with workers facing dangers like traffic, robberies, and extreme weather conditions.
  • Delivery workers, often independent contractors, lack health insurance and may have to pay for work-related injuries out of pocket.
  • Delivery workers heavily rely on tips, which can make up a significant portion of their earnings, but tips are not guaranteed.
  • Despite the massive valuations of delivery companies, many are not profitable, relying on Wall Street funding to grow and dominate the market.
  • Efforts are being made in some places to protect delivery workers, such as laws guaranteeing minimum pay rates, but apps often find ways to circumvent these protections.
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