Episode 99: Could a Newcomer in Delivery Totally Upend and Disrupt Things?

Lyft is making plans to get into restaurant delivery

Last week we talked to Bob McNulty from a new upstart in delivery called TripDelivers, who launched their first market a couple weeks ago, with plans to go nationwide.

Lyft is talking about a different approach that charges restaurants less and that doesn't interfere with the relationship between the restaurant and the customer.

TripDelivers has created a model where essentially the customer ends up paying the restaurant and the courier directly and that has a significant driver, restaurant and customer referral program.

Are either of these game changers? Could they be?

The associated blog post for this week's episode talks about if Lyft or TripDelivers could disrupt delivery.

You can read the transcript for episode 98 where Bob McNulty shares what Trip Delivers is doing and how they are different.

Lyft addresses the concerns about overcharging for deliveries by other delivery companies. However, do restaurants really want a delivery company that doesn't also bring in customers?

TripDelivers looks intriguing to me on paper. Some compare them to Multi Level Marketing organizations and there are criticisms. I do believe that if they do things the way they say they will and they do them well, they could make an impact.

The question is, can either of them not suck as bad at delivery as Doordash, Uber Eats, Grubhub, Postmates or any of the others? That's the big problem I see: None of them do it well.

I'm not sure they can using an independent contractor model.

Speaking of which, I wrap up with a little bit of a rant about what I think would be disruptive. If someone comes in with a pure logistics focus, figuring out a more efficient model for food delivery, they could make a difference.

I ranted a lot more about that back in Episode 51 last December.

Episode 99.... can you believe it???


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Transcript

0:03

Hello, Courier Nation. Welcome to the Deliver on your business podcast, where you are the boss. Each week we talk about how to make the most of your business as an independent contractor, as a courier delivering for gig economy apps like Grubhub, DoorDash, Postmates, Uber Eats and so many others. Well, hey, welcome back, Courier Nation for another episode on the Deliver on Your Business podcast episode 99. We're getting so close to that 100 mark. I'm not sure I ever thought that I'd make it all the way to 100, you know? Anyway, it is wonderful to be back, and it's awesome having you back here again this week, and I'm looking forward to another episode here on the Deliver on Your Business podcast. And oh, by the way, happy Thanksgiving here, we're just a couple of days away. And this has been a crazy, topsy turvy year. And you know, even with this crazy as it's been. I just feel like there's so much to be thankful for, and especially, I think, as crazy as everything has been that. You know, with so many businesses and so many different kinds of work being just shut down and seems like starting to shut down again. We're able to continue doing delivery. And I think the other thing is that as long as there's this uncertainty out there. I just find myself just thankful for my health. You know, I'm just so thankful and I've been fortunate. So while I'm going down that topic, I think I might have mentioned last week that my daughter had tested positive, that she got it from a co-worker and she's been able to run the course and really not have too much, you know, really severe, not really feel too sick. And she seems to be over it now. And I'm thankful for that, obviously. And you know, the thing is where she lives in the house with her still and trying to navigate this whole thing of, you know, living in the house of somebody that's got COVID and trying not to catch it yourself. And so I'm thankful to have gotten through this so far without catching it. And I went in not too long ago and got tested. Everything came back negative. And that's good news. But you want to know the crazy thing about that. There is almost a sense of disappointment at getting that negative result. I know it's kind of crazy, isn't it? And it's not that I want to catch this damn thing, but maybe it's more like. You know, I've had, you know, a little bit of congestion and a couple of things, not not bad, nothing really bad at all, and maybe that's what I wanted was I wanted to have had it and have it not be that bad. And to be done with it, you know, instead of all of this waiting instead of all of this avoiding everybody, although who knows, I mean, it's not that necessarily, if you catch it, it doesn't mean that you can't catch it again. We don't know that much yet about it. Or maybe we do know enough about it, and I just wasn't paying attention, I don't know. Because the thing is, I don't want to take this thing lightly. I, you know, I'm starting to, you know, people that I know that have had this pretty severe. I've got an old friend who is intubated right now, and he's day to day, and they're not sure whether he's going to pull out of it. So this is some serious stuff. But all of this is to say that when you got something like this happening around you, it does kind of force you to take stock, doesn't it? It forces you to take a look at what life is, and I think it just I end up being more thankful for what I do have. And maybe it's because you start to look in the face of. Something like this that. Can just change everything for somebody, you know. And I think it's just because it's the kind of thing that reminds you that when you've got something to lose kind can helps you to be thankful that you do have something to lose. Does that make sense? Anyway, enough of all that. So last week we had Bob McNulty on, he was with trip delivers and he was talking about some of the stuff that they're doing, they're launching a delivery service. They just launched in Nashville, Tennessee, and they got plans to launch in some other markets. Like he mentioned, I think Atlanta and Houston as a couple of potential new markets. And that just brings me to this question, you know, can a newcomer into the delivery world just totally disrupt the food delivery market? And there's a couple of potential players here. You know, so you've got a company like trip delivers that is just getting off the ground and they're doing some things very, very differently. And then you've got Lyft, who's been on the outside. They've been continuing to do their ride share and now they're making noise about getting into the delivery market. And they started with a partnership with Grubhub, and now they want to kind of start their own service. Can one of these guys or somebody else come in and just totally disrupt the food delivery market? You know, both of these two companies lift and trip delivers, they say they're, you know, do things very differently than everybody else. Are they different enough to actually disrupt things? Are they different enough to really give them an advantage to let them really just step into a market that I think is ripe for somebody to come in and disrupt it? You know? So that's what I want to talk about today. I think it's a market, I think his whole delivery thing needs to be disrupted, yet 2020 is such a crazy year, right? And. The funny thing is, is it's been a really crazy year of opportunity for delivery companies. I mean, because of the stay at home suggestions, the pandemic, everything like that delivery has just taken off. People are staying home. Restaurants are being shut down. They were shut down for a long time as far as dining in and a lot of places here in Colorado, they just shut them down again. And it's takeout or delivery only again. We're right back to that again. And so if people want to get their food, they've either got to go to the restaurant and pick it up or they've got to rely on delivery. And when people are taking this whole pandemic kind of seriously, they're more likely to go with delivery. So as a result, all of these delivery companies have just skyrocketed as far as you know, their sales and their numbers. And DoorDash appears to be the one that has really benefited the most from it. It looked at one report that showed the market shares and it kind of blew me away that they're already getting close to 50 percent of the market share that they have become that dominant. And in the one that I looked at and I'll put a link in the show notes to it, I think Uber Eats was sitting in second in a very comfortable second at 28 percent and Grubhub had dropped down to 17, and maybe that was the most interesting thing about it. Grubhub was king of the year for King of the Hill for so long, and there is a 17 percent share now. Things have been dropping bad for them, and it's just been interesting, though, because all of them, even with Grubhub dropping in market share, they still had a huge increase in orders in revenue. But here's the thing about it is they've had all this extra business and it's just like everything was handed to them on a golden platter and they are still losing money hand over fist. DoorDash revealed in their IPO paperwork that they've lost $140 million, or $149 million, so far this year. That's a hell of a lot of money for a best case scenario as far as their sales, you know, and to have something that they're not going to have an opportunity like this come along and they get this come a long handed to them and they still lose $149 million. There's something wrong with this whole thing, right? And on top of that, it is like. I think most of these delivery companies are seen as kind of a necessary evil. You know, you've got customers that are getting frustrated, they're not getting their food either. The foods the food is sometimes stolen, the food is. Sometimes it arrives in horrible condition. And it's frustrating for the customers, the drivers are getting pissed because the delivery companies they've hired so many other drivers that even though things are busier than they were this time last year than they were any time before now, except for maybe, you know, May, March, April, when things are just crazy, things are still incredibly busy, but drivers aren't making more money because delivery companies have hired too many drivers. And so as far as it feels like when you're out delivering it, sometimes things like things are slowing down, delivery fees are dropping. Uber Eats in my market has dropped to 250 minimum when they used to be, I think, at one time with 350. More recently, they've been at $3 and hanging steady. And then all of a sudden I'm seeing $2 and 50 Cent offers coming out. And so there's all this stuff going on and you know, drivers are getting deactivated left and right and just the morale, I think in the driver community is horrible right now. And then there's the restaurants and the restaurants are the ones where I think they're really especially see this whole delivery thing is a necessary evil. They just there's there's like this universal sense among restaurant owners that these delivery companies have taken advantage of this pandemic and have used it to exploit the restaurants and chaos. That is not a good sign for the long term potential. When the restaurants feel that way about the delivery companies, you know. Now, I remember when this all started and the restaurants were, you know, my gosh, I'd walk into a restaurant to pick up and deliver, and they were just so thankful that we were going out there to deliver. But then the delivery companies, they did all their virtue signalling they did all this stuff about, Hey, we're here to support the restaurants, we're here to take care of things, we're going to make it easier on you. And they never did, and a lot of cases they actually jacked up the fees and stuff like that. And so it's like they had these restaurants over a barrel. Anyone tell you that right now, right now, these restaurants, they need delivery, they need delivery because they've got to continue to find some way to keep the money coming in until things get back to a little bit of a sense of normal. If there ever is such a thing, it was normal. So they need delivery. But I can guarantee that when the time comes where they don't need it as much. They're going to have a long memory about how all this stuff happens, and it's just not a good sign for the future of this industry. When the people who need you the most think of you as an evil, you know? But that's the spot that DoorDash and Uber Eats and Grubhub and Postmates and these other delivery companies have got themselves in right now. So I don't know. My take is, even though I think the restaurants are, I'm sorry, these delivery companies have had like an unprecedented amount of business. I'm not sure that the future is so bright for them. And in our conversation that was leading up to the podcast, I think Bob McNulty put it quite well. He just kind of mentioned about these restaurants, about these delivery companies that everybody is copying each other. They pretty much used the same business model, and each time somebody new comes in, they're just doing the same thing. And I think he's right. I don't think anybody's really differentiated themselves and how they do things. They all kind of do the same things. You know, they hire independent contractors. You pay a delivery fee, rely on the tips from the customers to make it worth doing for the contractors. But you use an independent contractor model so you don't have the employment expenses. You set up an ordering platform, you market it and things like that, and you use that to market your service. We're going to bring you customers and then you charge the restaurant a substantial commission when people order the food. And then you charge the customers a substantial delivery fee and then you offer fair to poor results on the delivery itself because you can't offer anything better because you're using independent contractors kind of that linchpin of the the business model, because when you have independent contractors, you are not legally allowed to control how the work is done. And so there's a lot of stuff that just fall through the cracks because of that. And oh, by the way, you're losing a ton of money in the process. So I'm just convinced that I think, you know, I think I was I probably sounded pretty enthusiastic about some of the things that they talked about with Tripp delivers last week. Part of that is because I just think the market is so ripe for somebody taking over. By doing something that is so different that it just blows everybody else out of the water. And I think it's so possible to do now. I said this a year ago, it was in episode 51. It was right before Christmas. And in episode 51, if you go to Andre Courier dot com slash 51, or you can find the link in the show notes. I offered up. I said, This is my get my Christmas present to you guys, to DoorDash, to Grubhub, to Uber Eats, to whoever will accept this gift in my gift was total market domination. And nobody took me up on it. The secret. The secret to total domination. I think it's still true today. And that is to actually deliver on what you promised. Yeah, the pun was a little bit intended there, you know? But my theory is that if somebody could put together an awesome product as far as their delivery, I think they could take over the market. I really think they do because there's so much frustration that if somebody came in and was just awesome, I think it'd be such a game changer. It really would. Because every single one of these major delivery companies suck at actually delivering food, every single one of them. They're horrible. You want to know how I really feel. And so even with DoorDash, you know, they kind of seem to have just taken over the delivery world. I think the end result. They're still terrible. Their app crashes all the time had a huge crash just this last weekend, and driver satisfaction is incredibly low. Customer satisfaction is incredibly low. I just think somebody could mop up. So we're talking about these two newcomers to the market, and they're coming in in different ways. And the question is, could either one of them be the one to really disrupt everything? Could either one of these really be the one to make the change? Let's talk about lift first. Now, Lift ventured into delivery in a couple of ways, I think. One is they got into a partnership with Grubhub and the whole idea with that partnership was that, OK, you know, each of them has like a membership product. And so Lyft, I think they called Lyft Pink. Their subscribers as part of this partnership, they would now actually get the Grubhub Plus membership as a perk for their subscription. And you know, you have either no delivery fee or very much reduced delivery fees as a part of that. OK, that's a great little add on. And the thing about that was that they as part of that partnership was that Lyft drivers could actually do those deliveries. I don't know. There are still some details I'm looking for information on. I've seen some things in some forums of some drivers that have ended up getting some regular Grubhub drivers that have gotten some of these Lyft plus things. So I do think that it's like if Lyft doesn't have drivers available for those orders that the Grubhub drivers could end up picking those up. And I would imagine that they're I don't know if there are places where Lyft drivers are able to take other Grubhub orders. And that's maybe a little concerning because the market is already saturated. I don't know, though, you know, but that was one area where Lyft was moving into it kind of more like, OK, we'll provide some drivers, but it's still the Grubhub delivery. You know what I've seen? But then there are some areas where Lift has been kind of moving into actually doing their own delivery service. And earlier this year, you know, they launched a pilot program. They offered some ways that essential items could be delivered, but they worked more like with government agencies and I think with some stores and things like that. But their approach was to let whoever they're partnered with order the deliveries. They decided not to be customer facing. In other words, they decided not to be offering, you know, trying to build that relationship with the customer themselves. They wanted to let those businesses or those agencies keep their relationships intact. Now, in their latest stockholder conference call, Hell, Lyft announced that they're looking into kind of expanding that and probably trying to move into their own food deliveries. And one of the things that they said is that, you know, the question is, could it workers, are they going to be just another ME2 company? And one of the things that they are talking about that where they say that they want to really set themselves apart is that they wanted to make it something that on the one side, that they're not charging nearly as much in commissions to the restaurants. But the other side was, they said, they also they don't want to be seen as trying to take over the customer themselves. And I think that is an issue with the standard set up right now is that Grubhub and DoorDash and Uber Eats and Postmates all try and get control of the relationship. They control the money all the way through and, you know, the restaurants have to wait to get paid. All sorts of different things like that. And what Lyft has said is, you know, we don't want to take away that relationship that these places have with their customers. So they're not going to set up like an ordering platform or things like that. At least that's a way I understand it. So their whole approach is we're going to come in and be much more customer restaurant friendly. We are going to, you know, make it so it's not nearly as expensive for the restaurants and we'll let the restaurants kind of have control over their relationship with their customers. Now, I don't know here, because I think there's the one side where Lift has got a lot of people that I think are probably a lot smarter than I am, so maybe they know what they're doing with this. But then again, I guess I kind of question that because it took them this long to get to this point to say, Hey, we've got to start doing some delivery. So what they're going to do is they're going to jump on board with delivery, but by the time they finally get it ramped up and get it working. The pandemic that has driven them into needing delivery will hopefully be starting to fade away. I kind of thought that it probably would buy now anyway, but. And oh, by the way, they're diving into this market that is just full of competitors. But here's the thing is, I don't think that what they're saying needs to be done is what is needed. You know, they're responding to an issue in the restaurant industry. Delivery companies are pillaging, exploiting, plundering restaurants with high commissions when things are really tight for the restaurants. And so they're responding to that and I understand that. But are they actually meeting the need of the restaurants with their approach, and I just want to ask, where is where's the value proposition of that approach? Other than it's going to be cheaper for restaurants? Now, if you happen to be a restaurant owner, I don't know if there's any restaurant owners that listen to this at all. If you happen to be or you manage a restaurant, I would love to hear from you on this type of thing because here's the thing, you know, send me an email, run it onto a courier dot com or go over to Andre Courier dot com slash 99, which is for episode 99. And it's kind of a semi transcript to see a blog article that I put out. That's pretty much most of the same stuff I'm saying on here. Just not exactly word for word. And leave a comment down there, because I'd love to hear more from the restaurant perspective, but from the restaurant folks that I've talked to managers and owners and things like that, you know, here's what I hear that the reason that they continue to work with these delivery companies, even though they're getting pillaged, even though they're they're being just raped, I think with with these high commissions. And they're frustrated with it. The commissions are higher than what their normal profit margins are, so, you know, and I'd always ask, you know, why do you put up with it? You know, why do you deal with that if it costs more than what you're making? And the answer I always get is it's exposure, it's it's kind of like it's marketing, because here's the thing of these companies are good at, they're good at advertising to the end user. They are good at developing relationships with a large number of people that are willing to do deliveries. And so what happens is they can get people through DoorDash and Grubhub and Uber Eats that they can't get on their own. You know, they don't have the marketing and advertising budgets like DoorDash and Grubhub and Uber Eats, and so it's harder for them to get new people. So here's what happens then is that OK, somebody orders from Joe's bar and grill, you know, and they get this steak and Joe ships it off through Uber Eats, DoorDash, Grubhub, or whatever. Well, that customer. Gets exposure to their food for the first time and the whole idea this is. If they got exposure to the food that way and they like it, then they'll come in. And this is somebody that might never have come in before. And so if they're lucky, they broke even on that delivery. But at the same time, it was kind of a free form of advertising, they got somebody to come in and it didn't cost them more. Then it costs to make the food, you know what I'm saying there. So if they broke, even they're fine with that because it's really it's kind of like a free form of advertising. Now that approach made a lot more sense, especially before the pandemic, because people then could go in afterwards, you know what I'm saying? And so but I think with a lot of restaurants that are continuing to do delivery, they're still they're playing the long game they hope they survive to the point that all these people that maybe they worked with might be ready to come into the restaurant eventually. So that's a lot of what that value proposition is with these other delivery companies that they're bringing in new customers. And I think that's the problem with Lyft's approach because. If Lift isn't marketing to the end user, they're not bringing new customers in. The only value proposition that Lyft has is the delivery is going to be cheaper. But now the restaurant has to do all the work the restaurant has to make that delivery happen. And for a lot of restaurants, that's not what they want to do. That's not what they're looking for. So I am very skeptical about Lyft's ability to make a dent. Because I don't think Lyft is giving the restaurants something that is really, really going to help them. You know, all they're going to be doing is is offering the logistics. They'll let their drivers take the food to the customer. And I think that could work if they were awesome at delivery. But I'm extremely skeptical that lift could be awesome at delivery. I think what you're going to get is another crappy delivery service. I think the service is going to suck. I think the on time deliveries are going to suck. I think they're going to suck just as bad as DoorDash and Uber Eats and Grubhub and Postmates. And the reason for that is Lyft uses independent contractors. They can't dictate what offers. Somebody picks up. They can't dictate how people do the deliveries, and it's really hard for them to dictate that somebody is going to show up and get the food on time. And when you're using independent contractors, there's a lot of times you just get, you know, people that. Do crappy service, they steal the food, they eat, the food, they take the food to the wrong place, you just. All sorts of problems with that that I think is just the nature of the beast. When you're using independent contractors because you can't control the outcome, because you can't control the process because you're not allowed to by law. And that's part of the problem with an independent contractor model. So I am highly skeptical that Lyft could be that disruptor. So the other example that I want to throw in there, then, is Trip Delivers who we had Bob and McNulty, their CEO, on last week talking about their service. Now, Trip delivers is very, very, very different from Lyft in that, you know, Lyft is already a nationwide player. That's one thing they've got going in their favor where trip is just getting off the ground, and they just opened up their first market in Nashville a couple of weeks ago. And so I don't know that there are necessarily any different than any of the other. Just getting off the ground delivery companies. They're certainly not a national player. But, you know, during the during the podcast, just a lot of the things that the way that they were talking about how they're going to do things to me were very intriguing. It is. There's a different approach, a very different approach to a lot of things that makes me think, OK, if they do this right, it could be really interesting, you know? But I'm going to tell you, I've got some reservations, I've got, I think, some major reservations, but the thing is Tripp delivers, they come in with a very different model. Now, if you didn't listen last week, you probably had no idea what I'm talking about. So I'll kind of explain a little bit on that. But you know, their model is, I think, different enough that there could be some disruption. And at the same time, I think that there's some issues that. You know, the issues that I mentioned with Lift could be the same kind of issues that might get in the way of trip delivers, being able to pull through on and not get into all that here in a moment. But they've got a different approach to how they involve contractors where I think it really is more of a true independent contractor approach. They treat you more like you're running a business and the way it is structured, it really is. I mean, it's much more clear that, yeah, you are running a business here. And so I think there's some things that way, and I think there's some ways that they do their payments and there are some things that they do that just make it very interesting. And then there are those reservations. But anyway, here's here's the thing where Tripp delivers is different. OK? They do a lot of things, I think very differently, or at least their model. Their plan is to do a lot of things differently. Now they do still use independent contractors. But like I said, the structure makes it more like a true contractor relationship. And what happens is, you know, like with DoorDash and Uber Eats and everybody, you do your deliveries and then DoorDash pays you. And oh, by the way, they include the tip with it and everything like that. And usually that comes about a week later and stuff like that. Well, what Trip delivers is talking about is a set each driver up with their own merchant account. And so the payment for the delivery is set up, so it actually goes immediately to the driver. And the payment that the driver receives is exactly what the customer pays for their delivery fee. And so in that way, that delivery fee is going directly from the customer to the driver. And so Tripp delivers is not acting as a middleman. I think other than. Setting up the infrastructure with the payment processor to get that money forwarded to the driver. Now I've watched a couple of the videos for trip delivers and some of them are, I guess, like their YouTube meetings that they have. And some of the models, as far as the way they have things set up, one of the things that I saw was they were showing some of the stuff about the delivery fees and it looked like, you know, the delivery fee was starting at about. $5, a little more than $5, and then they were going to pay like about a dollar a mile for each mile that you've got to drive in from the restaurant to the customer and it's like, OK, that's a heck of a lot better than what anybody is doing right now. You know, you got UberEats doing 250, you got DoorDash two in two dollars. Sometimes you've got all of them just really bottoming out on what they're paying. And so here they are, starting with $5 and then adding miles and then adding tips on top of it. And so that right there has the potential to be much better pay for the drivers. So those things right there, you know, it's a totally different and I think, refreshing approach to that relationship with the driver now under their plan, under their model, the relationship with the restaurant is different also. You know, so Tripp delivers also sets the restaurant up with the merchant account on that. And what that means is they get paid immediately for the order. Now there's there's different things about the way they do things, for one, they don't charge a percentage commission. They will just charge the restaurant a delivery fee. It's a flat fee. It's $2, or it could be $3, depending on what options the restaurant chooses. And that's it. Whether or not you know, you get a $10 delivery or $100 worth of food.$2 is the delivery fee, so they're not pillaging the restaurant. But the other thing is that they are also not. Controlling the menu. What happens is, you know, the restaurant gives them the menu, they get it all set up in there, but the restaurant is the one that sets the price on that menu. They do not mark up the menu. Now the restaurant's got the option to go with a higher price for the delivery menu if they want to go that route. You know, so let's say if they see, OK, you know, my $7 burrito is selling for $10 on Uber Eats and DoorDash. Well, OK, we'll go ahead and put it up on chip delivers for $10 to the restaurant, gets all of that profit. So I think there are some things that I think, you know, with not having a percentage commission, having more control of that thing and getting paid immediately. You know, what happens then is the customer orders the food right and they get their delivery fee and they get, you know, their sales tax and the cost for the food. And that's it. And so the way I understand it, the way Bob explained it was then that the processor is all set up just to be able to. What it's going to do then is just funnel off. He talked about it being like a freeway. It's got access. So off of one exit, you've got the delivery feed the customer paid goes directly to the driver. It's the exact trip delivers, does not touch that the processor is the only one that touches that. And they just kind of route it to the driver. The restaurant that the restaurant food money goes directly to the restaurant, minus the two or three dollar flat fee. So it's very interesting, you know, it's just a very different approach to that, and they don't hang on to the money like the other delivery companies, they don't control the money. And in that regard, they really are acting as more as more like an intermediary, I think, between the restaurant and the driver and the customer than what these other deliveries companies are doing that actually say that that's what they do. You know what I'm saying there? So when you look at it on paper, I think it is very interesting. Now, on top of that, they've got a very interesting, I think, you know, and very involved referral structure, and this is to them. I think this is the centerpiece in their mind of their model. And it is that here's the deal is. As a driver, you can sign up other drivers and you can get a commission off of that monthly fee that the driver pays. Now it's one thing to keep in mind is that there's one thing that is part of this deal is that the drivers pay a monthly fee and they kind of choose which level they're in. But as a driver, if you sign up somebody else to drive now, like Uber Eats and DoorDash, they just give you that referral fee or whatever. Well, the way they handle the referrals is they do it where you get a commission off of those fees and then you can sign up a restaurant. And if the restaurant goes with a membership fee and the membership fee allows them to do the $2 flat rate instead of three dollars anyway, if the restaurant goes with that membership fee, they get a commission off of that membership fee. But on top of that, you get 40 cents for every delivery that's done through a restaurant that you sign up. You know, and that's interesting in the in the podcast, I had said, you know, so that means I walk into a restaurant and I see there's ten point ten orders already to be picked up and delivered. And if those are all on trip delivers. The guy that signed up the restaurant is getting $4 for those 10 deliveries, and he just continues to get that money. You know, it makes it almost like a too good to be true type of thing, and there's there's something to talk about there. But anyway, you know, so there's that that makes it interesting. You can sign up customers and you get a little bit from each order. The customer places, restaurants get a little bit from, you know, they can go out and they can market to their own customer base and the customer signs up and the restaurant gets a little bit from each order that the customer places. It's I think it's like 10 cents. I don't remember exactly what the amount is. It's not much, but if the customer orders from another restaurant. They get a little bit off of that. The restaurants can sign up drivers, the restaurants can sign up. Other restaurants and then get commissions. So it's like everywhere you turn, somebody is getting a referral fee or a commission. And that makes it attractive. But then it also brings up this question. Yeah, that almost sounds too good to be true. And whenever something's too good to be true, well. And is it too good to be true? Is this something that is realistic and that's the part I don't know. You know, it's all structured in a way that it looks really good. And maybe I think, you know what, if they do everything that they say they're going to do and they do it well. You know, it could be interesting. And I'm going to be honest with you, I think part of my reservations are there's there's a lot of scathing stuff about them and about trip technologies that you know that you can find out on the internet whether or not there's any truth to any of all that stuff. I don't know. I don't know. You can go out and you can got to look it up and you'll probably be able to find some of that stuff there. And I just say that to say there's something about that that you got to be aware of, especially if you're really thinking about diving in on something like this. And there's some strong criticism, especially in the rideshare community, that's related to when they first ventured into rideshare as trip technology and it was TR whippy. And it's all pretty much kind of the same thing. But you know what? You know, the way that Bob explained it last week was that just understanding where things were going with rideshare, they understood that, OK, this is not sustainable, especially with the pandemic. And so they made the pivot into delivery. And that makes sense. But. One of the biggest criticisms that I see out there is that this whole model is compared to like multi leave multilevel marketing. You know, and I think of Amway, you think of all those places where your friends want to have you over for a party and oh, let's talk about this business opportunity, you know? And what happens is they make more money on recruiting you to join the organization than they make from actually selling the products. And there are some things about the way they're set up that kind of looks that way. You know what? Drivers pay a monthly fee. And personally, I don't have as much issue with that. If everything is done well on the other end of things, I'll talk about that a little bit more in a moment. But, you know, drivers pay a monthly fee. You get these recurring commissions based on what happens through the people that you sign up. And it sounds a lot like if you're familiar with multilevel marketing, what they call the down line, you know. And so there are some elements on there that are kind of like that. And I don't know. I'm not sure that necessarily that model means it's a bad thing. I do think there's some MLM things out there that they actually sell good products and stuff like that. So. So anyway, you know, I'm just bringing up, I think some of the stuff that I saw out there, some of the concerns that I've seen other people raise now. The one thing that I've got to say is, I wonder about the math. You know, think about this. The drivers make more money. The customers pay less money. They don't pay as much in the fees. They don't pay those extra fees. All they pay is the delivery fee and the tax and the food and the food doesn't get marked up unless the restaurant wants to do that, so the customer pays less. The drivers make more. The restaurants pay less. Think about that because. Compare that to the status quo, DoorDash and Grubhub and Uber Eats and Postmates are all losing money. And what are they doing? They're plundering the restaurants, they're tacking on these service fees. You know, a lot of times the service fees and delivery fees are like 20 percent or more of the food, and that's before you even get to the tip. And then they're paying drivers a pittance, I mean, they've been skimping, they've been, they've been. Shaving the delivery fees, it's like every year they find a way to train their skin about 15 to 20 percent off of the delivery fees that they pay out, so they're charging a lot more. They're paying a lot less and they're losing millions of dollars. So do you see where I'm going with that? You know, how is it possible for trip delivers to charge a lot less to the restaurants and a lot less to the customers and pay the drivers better? And throw around all that extra referral cash in those commissions. How can they do that and stay in business because it costs a lot of money to manage these deliveries? It's still, you know, the management of it all, I think, is a lot more expensive than. And I don't know if the, you know, is it something they don't realize? Or maybe they're able to pull off that management in a way that I don't realize. But it costs a lot of money to operate the check and to make sure it's working as DoorDash about what it's like trying to keep the tech working. You know, this is not an inexpensive thing to operate. And I'm just not sure that the $3 per delivery from the restaurants and, you know, the $99 a month or $39 from a month from the drivers and, you know, whatever membership fees from the restaurants, when you look at how much all these companies are charging on the other side. I just I'm sitting there looking at all of that and I'm wondering is, is this realistic? Can they actually make the money they need to make and stay in business? And if not, you know, what's what's the angle here, you know? And I don't know. I mean, there's there's a couple of things here, where can I look at the fact, OK? Yeah, but you know, what's happening is the way that they've got it structured where it's kind of like more like the customer is paying the driver directly. OK, that's one thing that, you know, that's a big part of the cost right there. And it's like that money doesn't even have to go through the company. And if they're really good at this whole word of mouth concept. They don't have to sink as much into the marketing and into. Restaurant acquisition and all those things, so I think there's some things like that that it's kind of like, OK, maybe I don't know. I don't know. Just something doesn't add up in my mind and and that's more me. It's just more this. I see all these other companies losing money. And yet here's a company that is going to charge less and not just less, but a lot less. And they're going to pay more and they're going to throw all this extra money around for other things. And it's like, how can they do that? And that's the part that I wonder about. I think that's the part. Really, the big thing I wonder about is the logistics. So, OK, before we dive in the logistics, I did say that I'd kind of give my thoughts about this whole driver fee and stuff like that. I don't have a problem with paying a monthly fee if that monthly fee gives me an offer of opportunity to profit more. When all is said and done to me, it doesn't matter if I pay a fee or if I'm just paid straight up. What matters is what's left over when everything is all said and done. It's the profit that matters to me. OK. Think about this. Think about all the, you know, the McDonald's and the Applebee's and the Subway stores that you deliver from. And you know, most of those are franchises. And here's the idea of the franchises. Somebody usually local owns that store. It's actually a locally owned store. But what they do is they pay a franchise fee and you talk in. You know, usually $100000 or more to be able to have the right to run the store under that corporate name, you know. And here's the other side that I guess, you know, kind of my perspective and when I run my website, I live in a world where you get commissions. When people sign on to programs, you know, if you go over to commercialinsurance.net or to Kover or to hurdler and use their service through my links, I can get a commission for that. And that's what helps me operate this website. You see what I'm saying? So, you know, those kinds of things, the referral stuff, the commissions, things like that. I don't have a problem with that. Even if it does look a lot like a multi-level marketing, if the company is willing and able to deliver what they're promising and if they're promising and things like that. And but they're actually delivering and it actually is a great service. I don't have a problem with that structure. Now that's just me. But you know, the question is. How are they going to do with that? And that is my question, I guess after looking at all of this is, you know, we're getting back to the whole theme of this episode is can they disrupt the mart, the delivery market with this model? And here's what I've got to say. I'm going to say from a driver standpoint, if they do what they say, they're going to do and they actually do, you know, and all of this works and everything goes well as a driver. Yeah, that is a very disruptive model from the restaurant standpoint. You know what, if they do what they say they're going to do and they get the stuff out there in the food deliveries go well and the restaurants don't have to pay that much. They get their money. That's disruptive. That's going to make a huge difference to the restaurant. And I think the restaurant's going to be a lot more likely to go with that kind of a model than with Lyft, where they'd pretty much just have to call Lyft and say, Hey, we need this delivery done, you know? But the biggest question is, can they do what they're what they say they're going to do? And will they do what they say they will? And I don't know the answer to either one of those, but what I'm going to tell you is I think the logistics is going to be the key to if they can disrupt. Here's the deal. The restaurants will love it if they pay less, but if the food's not getting delivered, if the food is late, if the service is crappy, if everything is inefficient, that restaurant owner isn't going to give a crap about it being cheap because they're going to be more upset about their loss of reputation because of the crappy service that happened through that delivery. And guess what? We're right back to where we were with DoorDash and UberEats and Grubhub because they all suck at delivery. Cheap does not make up for a bad reputation from an unhappy customer. Now, I mentioned I think earlier I said that I see that trip delivers could have some of the same challenges as lift when it comes to trying to actually be able to disrupt the market because of their model. They're very different and there are some things that are very disruptive. But can they really? Get some kind of critical mass with this. That's the question, and there's the two issues that I mentioned with Lyft. I said that lyft that they weren't going to bring in business for the restaurants, and I said that their use of independent contractors means they can't control the the. The quality very well. And I think you could have a maybe a potential issue with both of these with trip delivers. It all depends on how they put everything together, you know? I'm not sure how much business trip delivers ends up bringing to their partner restaurants. You know, now, you know, Bob talked about they're starting to, you know, kind of ramp up some marketing in Nashville. And but I'm going to tell you that because of the fact that they're not getting nearly as much money from the customer and not getting nearly as much money from the restaurants, and they're paying the drivers more. They're not going to have the budget to be able to do the kind of marketing that these other companies do. Now is there, is there a word of mouth approach going to work? It could. You know, it could? I don't know. I don't know how well that will work. If that does work, I think that offsets that one issue. But here's my biggest reservation as to whether or not trip deliveries is going to be able to actually do something here, and it all comes down to logistics, it all comes down to how well do they actually deliver on delivering, you know? That, to me, I think, is the big unknown right now. And this is why I feel like they're going to have the same challenge that Lyft has, which is the same challenge that everybody else has. How can trip delivers actually be better than anybody else when it comes to using independent contractors because they're using independent contractors, you cannot control the means of how work is done when you use contractors. And that's the Achilles heel for all of these companies. Delivery sucks for all of these companies because the main thing is they cannot tell their drivers that you have to go pick up that delivery. They cannot control the process. And I don't know how Tripp thinks that they could do better at that. So having all set all that, here's where I fall, I think with this whole question about can they disrupt? I don't know. You know what? There's there's a lot that I'd like about them, the way that they're set up, at least on paper. But. For me, it's kind of like I've got to see how well they actually work, how well do they actually handle the deliveries? How good are they for the relationship with the drivers? You know, I've got to know all that stuff before I can actually recommend them and say to a restaurant that, hey, you ought to sign up with these guys in order to tell a driver that, yeah, you should, you should commit to this thing here, especially if they've got to pay a monthly fee. Now, one thing I can tell you is they do this monthly fee, but they don't charge the fee. This is what they tell me. They don't charge the fee until the driver has been on for a month. But, you know, I keep coming back to logistics because I think that's the key. That's that's the whole key to whether or not they can disrupt, you know, if they handle the road, if they handle the logistics, OK? That's a huge step right there because it gives them a chance to maybe make a little bit of headway with the differences in their model. But, you know, honestly, I just don't believe that anything better than just OK is possible when you're using an independent contractor model for getting the food delivered. Now what I'm going to say is I think if they're committed to offering a real delivery product and they put the effort into making it an awesome experience for everybody involved, including the restaurant, not just the model, but actually in the practice. Then they could make a big difference. I don't know if it's totally disruptive difference, but. They could do well, you know. But I honestly, I don't know. I don't know how committed they are to actually pulling off a real quality delivery service. I'm going to admit to having some reservations, because when I think about it after talking with them and just, you know, kind of reading all the stuff that I've been reading and everything like that. And I think maybe the best thing that I could tell you to do if you're wondering the same type of thing is just pay attention to what what the communications are coming from them, what are you seeing? You know, is it all just about the marketing? Is it all just about the business model? Is it all messaging that is all about getting you on board? And how much are you seeing about logistics, how much are you seeing about how they're going to handle actually getting the food delivered? You know? And I think that's the part I don't know how committed they are to really pulling off a real quality delivery service. And I don't think you can know until they've got a track record. And here's one thing I think I want to say about this and that I mentioned before. There's some scathing stuff out there and. Now, one thing that I want to kind of bring up just that, you know, I see some of the criticism on there and some of this was back when they were still doing the right chair that some of the criticism was, hey, they're recruiting drivers, but they don't have a service app yet. They don't have an app up yet. And really, the implication is they're never going to have that. And I I have to ask, how objective was that when they said that just because now I see that, yes, they do have the service up and running. I've downloaded the app and I can set myself up. I can set my address as in Nashville, Tennessee. I could go in and order food from Nashville. I couldn't because I'm not there to receive it. You know what I'm saying? And what I'm saying is they've got a service up and running. What I don't know is how good that service is. What I don't know is how good they are at operating that. And so I think there's the piece that I can't really know for sure how they're going to do. Without seeing the track record, and I think when they've established a track record. And if it turns out, like, holy crap, they're pretty good at this delivery thing, you know, it could be a game changer. So I don't know. You know, it's part of that is just a wait and see. Now here's the thing, I guess in my mind when it comes to newcomers disrupting the market, I don't think the real disruptor has shown up yet. I just I don't I can see some things, especially I think, with Trip that if they do, what they say they're doing could be really interesting. But. I'm still convinced that that the one he's going to really disrupt the market is somebody who can come in with their whole focus is on the logistics. Everybody else has come into this from more of a marketing standpoint. You know, everybody's coming into it from the money side. And I think if somebody comes in and says we're going to be damn good at delivering and that's our focus and that's their messaging, and that's the way they handle things. And oh, by the way, because they are logistics oriented, they're going to focus on efficiencies. They're going to focus on. This whole delivery thing is such a freakin inefficient model. You got one person going to one restaurant and they're waiting for the food and then they're driving it to one person. That's not logistical. That's stupid. And when you're, you know, and then everybody says, well, the cost of. Labor is what makes this so impossible to do that well, somebody could figure out a way to get around that and and to be a lot more efficient with the time of the delivery drivers. I think that's where they could shake things up because I think they could do it without paying more money. So go check out that episode 51 entre courier dot com slash 51. I get to do a lot more detail. I geek out. I talk about a hub and spoke model that I think if somebody came up with something with that and if they did it from a logistics and efficiency standpoint, I think they could clean up. And so get somebody who comes in and they're first and foremost what they are about is logistics. They are about getting that order to the customer and they are about that customer satisfaction and when that's their marketing and that's their message and that's their focus. I think they could clean up. I really think that a company that produces satisfaction with the restaurant and with the customer. Now could it be left? Could it be trip delivered? Could it be Chopper? I don't even know about them, but I've seen I've seen them on Twitter or cluster truck. You know, they're here in Denver and a couple of other markets, and they've got a really interesting model. Could it be somebody like that or I don't know. Could it be Grubhub? Think about this guys, think about this for a moment. Think about the fact that Grubhub was strangely silent on this whole Prop 22 thing out in California. They didn't put up a fight against any of that AB5 stuff, really. Now on top of that, you have just eat takeaway the company that is at least set to buy them out next year. You know, I think it's been pushed back to the end of 2021. So I don't know, is there something that's going to get away from that sale happening? I don't know. But the thing is, is this Just Eat Takeaway has made the announcement that they're going to move away from this whole gig worker model in Europe. So could Grubhub be planning on totally upending thing? Are they is the reason that they were kind of strangely silent on this whole AB5 Prop 22 thing because they're planning to go to an employee model? I don't know. I mean, that's that's that can happen, you know? Pass the popcorn because this whole thing is going to be fun to watch. And while you're mentioning that popcorn, my friends, let me just ask this question, how is this website helping you out? Is this podcast helping you out? Because if it is, can you spread the word? Can you leave a review in Apple Podcasts and Spotify and in any of these places that might have a chance for you to leave a review because that helps us get found. And if we can find more people and more people can find us, we can help more people to be the boss.