DoorDash – WTF?

DoorDash considers themselves a technology company that connects people to food. It is essentially delivery service built on an app that employs mostly gig workers and charges restaurants absurd fees for the service.

From what I have read, they have only been profitable one month. DoorDash went public this past week and is now worth over $60B after raising $700m from the venture capital community. It makes no sense to me.

Amanda Kludt, the editor of Eater, brilliantly explained her dismay about DoorDash in her weekly newsletter. It took a pandemic, making consumers and restaurants increasingly dependent on delivery, for third-party platform DoorDash to finally eke out a profit after quarter upon quarter of losses in the hundreds of millions. It’s a company that exploits the vulnerabilities of gig workers, gouges its restaurant partners, preys upon restaurants that aren’t partners, and subverts government regulations. It’s not unique in its competitive set — it’s easy for both customers and restaurants to switch platforms — nor is it guaranteed to maintain profits post-pandemic.  I just wish the good fortune could lead to better deals for workers and restaurant partners.

There is no other way to say it but the pandemic has fucked the restaurants. The percentage of PPP that few of them received is so out of whack with what they should have received because most are independently owned by entrepreneurs.  They don’t all belong to a lobby that would be the voice for them at the Government table.  

Closing down the restaurants for indoor dining when it’s cold is like shutting down the aorta of the city.  NYers eat out.  We rarely eat in.  It’s a public city.  It’s about being out and experiencing not being inside looking at our walls.  

Restaurants have been hurting for awhile that means it has become very hard to even break even pre-pandemic. The only way to change this is through new tax structures for restaurants at different levels based on how many people they employee. Certainly McDonalds (a publicly traded company) is different than the Noodle Bar.  Cities need restaurants, period.  They touch an entire world of entrepreneurs from farmers to florists to wine makers who now all find themselves scrambling to make ends meet or are just closing the door.

We all know that commercial real estate will come down in price but that is just one part of the problem. We need fundamental changes at the tax level in order for restaurant business model to succeed.  We need healthcare for all so that restaurant owners can take that off their books knowing that each employee has Government healthcare. That is a huge expense right there. Payroll tax could be reduced too.

We need restaurants to succeed not only for the businesses surrounding the restaurant industry but for the brilliant artistic creative chefs who provide each community the ability to visit a new country nightly with food for our soul whether it be Pad Thai or a cardamon bun.

I applaud DoorDash for what they have done as they are helping restaurants distribute their wares but at the same time sucking them dry. If just 1% of that $60b went to the help keep the restaurant industry alive….well.

Will there ever be a political lobbyist for the restaurant industry? I am not convinced based on how they independently operate. At what point will our politicians, who I am sure eat in restaurants, open their eyes to what is hurting our communities outside of the large corporations and lobbyists standing at their doorstep with their pockets open.