This piece by Ranjan Roy for his Margins newsletter is such a perfect example of counterfeit capitalism. Roy has a friend who owns a few pizzerias. They were getting complaints from customers whose deliveries were cold. What made that really odd is that his pizzerias weren’t offering delivery service. What happened is that DoorDash, with no permission, registered a phone number with Google under his restaurant’s name. The fun part of the story:
DoorDash was causing him real problems. The most common was,
DoorDash delivery drivers didn’t have the proper bags for pizza so
it inevitably would arrive cold. It led to his employees wasting
time responding to complaints and even some bad Yelp reviews.
But he brought up another problem - the prices were off. He was
frustrated that customers were seeing incorrectly low prices. A
pizza that he charged $24 for was listed as $16 by DoorDash.
My first thought: I wondered if DoorDash is artificially lowering
prices for customer acquisition purposes.
My second thought: I knew DoorDash scraped restaurant websites.
After we discussed it more, it was clear that the way his menu was
set up on his website, DoorDash had mistakenly taken the price for
a plain cheese pizza and applied it to a ‘specialty’ pizza with a
bunch of toppings.
My third thought: Cue the Wall Street trader in me… ARBITRAGE!
The arbitrage is good fun, but ultimately the whole thing shows how predatory these VC-backed delivery services are: