The Margins is a Substack newsletter on tech business, covering delivery apps, ad networks, and platform companies.
Commenters recommend its pieces on GameStop and on food delivery economics, using them to explain how VC-funded delivery businesses work.
> Or Uber doesn't tell you the whole story of what you're actually going to make after gas, maintenance, repairs and insurance.
It's mainly this.
I did a deep dive on Doordash during the pandemic/lockdown while I was going back to school for Supply Chain and Logistics as I wanted to take a better look at how it worked. I even did a few dashes myself.
And the people I spoke to, including the owners of the resteraunts, weren't aware of the many hidden costs of these gig economy services. Which is why you have vigilantes like the guy who did that Pizza DD arbitrage and then went on to tell the the whole World about it and ended with; F' Doordash [1]. Then the taxes as an independent contractor at the end of the year are something they seldom take into account as they've never been an independent contractor before.
These systems are pretty damn predatory and I think the people (business and tech side) who work on them should have to do a mandatory couple of shifts on their own dime every month to get a perspective of what is occurring.
When I lived in Switzerland, one of the coolest things I heard about certain management roles was about how the SBB requires that management and above have to do the more 'menial' work to get a better grasp of what is occurring at the passenger level and help improve the system. My friend was a manager of one of the branches in Bern and she had to go around and collect tickets and clean the train once in a while.
She said it is humbling,…
> I'm happy to pay a fair price.
But, that's the thing. Would you? OP's article is a follow up to an original that focusses on and explains price forks and how that affects these delivery services. [1]
[1] https://themargins.substack.com/p/doordash-and-pizza-arbitrage
Why would you - the customer - pay a restaurant 24$ for a pizza while you could get that same pizza for 16$ via DoorDash in a far more convenient fashion? How much do you care about the restaurant's business if the exact same thing is offered to you at 2/3rd's the original price just 2 taps on your smartphone removed from your door?
Companies like DoorDash are currently losing money and they are happy about it. Why is that?
It's a cost/benefit trade off. DoorDash perceives covering the remaining 8$ of that pizza as an expense. What they bank on is being able to buy an established position of dominance as a middle man on the delivery market.
Two things are happening right now. The first is a race to the bottom and drive other delivery services out of the market. That happens by accruing as many restaurants and their customers on their platform. The second is that restaurants get pressured over time to lower their own prices since they compete less with the menu's displayed in their windows on main street, but with the cheap offerings on DoorDash or GrubHub.
If and when the price gap closes over time, incumbent delivery services who remain get to flip their losses into a profit.
The societal cost?…
I don't think the devil needs any more advocates, tbh, and I kind of wish people would stop refusing to take responsibility for the arguments they put forth by hedging in that way.
> Powerful, data comprehension
Correlation, maybe -- not the same as comprehension.
> A possible solution to this is creating data points for everyone, but that has its own controversies
Or you know, creating fewer data points -- maybe even none -- in general. Why is this something that needs to be software-driven? Why increase automation? What is the evidence that policing and criminal investigation is more effective (and by what standards!) when using Palantir's tech?
I question the assumption that increased automation and digitization of every process is necessarily an improvement, or useful, and I feel like this line of argument takes that as an assumption.
> Their view is that they don't see or pick any sides, but the morality of that is up for everyone to decide, I believe if you don't pick a side, one is often picked for you.
"Not seeing sides", or not picking them, is taking a position though. Declaring neutrality doesn't remove the concrete effect of your actions, or change the fact of your material support for a given model of policing or government. As Can Duruk argues convincingly in his latest newsletter[1] one of the best examples of that is low voter turnout in US elections: that benefits one side pretty clearly, so to declare you won't take sides and won't vote is a…
> How is the astronomical price a promotion?
Because people are expecting it to get to $100k, which means it's a hot commodity in a speculative bubble. Not everyone who buys into a bubble believes that the underlying fundamentals justify the price in the long run- they just believe that there's room to grow, and that there are greater fools to sell to.
> These have little and nothing to do with the cause of the high price.
Just like the ease and lack of fees of Robinhood spur more stock-buying, Coinbase makes trading crypto easy and facilitates more bandwagoners who further pump up the price.
> That explains why Musk would buy it. That does not explain why anyone else would buy it.
I brought up that reason with Musk in mind. And Tesla buying it has direct second order effects- it popularizes and legitimizes BTC and cause more to buy into it, whether they're familiar with the underlying intentions of BTC or not.
> Obviously, if there weren’t fundamentals, now would be a good time to sell.
People buying in now believe there's still room for the price to rise. An asset with solid fundamentals (Tesla stock, GameStop call options) can also be wildly overvalued. I'm sure similar conversations were happening in 2018.
> Animal spirits are an unnecessary hypothesis for this event.
Look at the market. Look at the economy. Everything is animal spirits now in search of yield.
https://themargins.substack.com/p/zirp-explains-the-world
Somewhat related, from Daring Fireball's clipping of https://themargins.substack.com/p/facebook-the-pr-firm:
> So, in that way, I read Facebook less as a tech company, but instead a communications one. Not a telecom communications, but more like a PR / marketing consultancy. There’s nothing original about Facebook. It’s a company that hires people to build others’ ideas, and, more often than not, it does that better and faster than them too. And when it can’t do that, it just buys them outright. There is a lot of building, but the ideas are outsourced. But what Facebook is really good at is actually doing all this while fighting what seems to be a never-ending, at least since 2016 or so, PR battle while not giving an inch.
> With all the negative press around, you might think they are not doing a good job at avoiding criticism, but consider the alternative that they’ve been able to weather all this because they’ve been able to deflect the criticism and avoid scrutiny and accountability. I know this all sounds pretty unhinged right now, but, stay with me. This is a company who hires conservative politicians to its highest ranks in multiple countries, while maintaining a veneer of political neutrality. The same company pretends its not the arbiter of truth while employing tens of thousands of people to do exactly that. Ask yourselves: What has changed at Facebook?
"And here’s Ranjan Roy:
The moment Lambda started selling off the contracts, their incentives completely flipped. Their income was then derived from generating ISAs, meaning, the more, the better. Enroll as many students as possible. Of course, if no one ends up getting jobs, investors will eventually stop buying the Lambda ISAs, but that would all happen a long ways down the road.
People are right to be angry that Lambda was selling off the ISAs. It broke their core promise.
I am less offended. Lambda isn’t selling the equity in the students, it is borrowing against it. In the language of securitization, it is selling the senior tranche to investors, but keeping the equity. (Well, 60% of the equity.) Lots of businesses borrow money to fund their operations, and pay back the loan out of the profits of their operations; that is just the normal way to do business, and is functionally what is going on here. Investors advance Lambda some money so it can pay for its programs, it collects money from students if they get good jobs, it uses the money it collects to pay back the loan, and if there’s money left over—if Lambda does a good job—then it makes a profit."
https://themargins.substack.com/p/the-risk-of-distributing-risk