# A pizzeria owner made money buying his own $24 pizzas from DoorDash for $16



## goneubering (Aug 17, 2017)

A pizzeria owner made money buying his own $24 pizzas from DoorDash for $16


This must make sense to someone, right?




www.theverge.com





Yesterday, Ranjan Roy, a content strategist and writer, wrote about the latter in his newsletter The Margins; one of his friends who owns a few pizza restaurants suddenly got an influx of customers complaining about delivery when the restaurants didn't offer delivery. "He realized that a delivery option had mysteriously appeared on their company's Google Listing. The delivery option was created by Doordash," Roy wrote.

Apparently, this is one way that DoorDash does customer acquisition - by bullying restaurants. But what's funnier about Roy's friend's problem (and it was a real problem because of Yelp reviews and angry customers) is that DoorDash priced the pizzas incorrectly. "A pizza that he charged $24 for was listed as $16 by Doordash," emphasis Roy's. And then: "My third thought: Cue the Wall Street trader in me&#8230;..ARBITRAGE!!!!"

And so the story unfolds. "If someone could pay Doordash $16 a pizza, and Doordash would pay his restaurant $24 a pizza, then he should clearly just order pizzas himself via Doordash, all day long. You'd net a clean $8 profit per pizza [insert nerdy economics joke about there is such a thing as a free lunch]," wrote Roy. They order 10 pizzas this way, and it worked! The money was free, a seamless transfer from SoftBank's deep venture capital-lined pockets to Roy's friend's business bank account. Eventually, in another series of what Roy hilariously calls "trades," they just ordered pizza dough through DoorDash for $75 in pure profit.

"So over a few weeks, almost to humor me, we did a few of these 'trades'. I was genuinely curious if Doordash would catch on but they didn't," wrote Roy. "Was this a bit shady? Maybe, but **** Doordash. Note: I did confirm with my friend that he was okay with me writing this, and we both agreed, **** Doordash." (I reached out to DoorDash for comment and will update this story if they reply.)


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## doyousensehumor (Apr 13, 2015)

goneubering said:


> A pizzeria owner made money buying his own $24 pizzas from DoorDash for $16
> 
> 
> This must make sense to someone, right?
> ...


Shuffling pizza &#127829;


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## tohunt4me (Nov 23, 2015)

goneubering said:


> A pizzeria owner made money buying his own $24 pizzas from DoorDash for $16
> 
> 
> This must make sense to someone, right?
> ...


" BUT @@@@ DOOR DASH " !

BEAUTIFUL !

HUMMING " REAL MEN OF GENIUS "!

U.P. SALUTES YOU !

Pizza Arbitrage Traders Unite !


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## Stevie The magic Unicorn (Apr 3, 2018)

It's news stories like this that will be the end of these services.


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## tohunt4me (Nov 23, 2015)

Stevie The magic Unicorn said:


> It's news stories like this that will be the end of these services.


MANAGEMENT OF GRUB HUB SHOULD BE HELD ACCOUNTABLE !

LUCKY IT WAS ONLY 10 PIZZAS.

NOT 10,000 !


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## Uberguyken (May 10, 2020)

And see I would have closed to the public and done this all day long till they caught on. Eventually I'd have a driver let me hand them to him, walk outside, walk back in hand them back to me and he got paid too.... This would've gone on for weeks with me selling and buying empty boxes.


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## 197438 (Mar 7, 2020)

This is a head-scratcher. He shells out $16 per pizza to make $8?


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## 25rides7daysaweek (Nov 20, 2017)

He owes the sales tax and has to pay taxes on the gross too.. I think delivery companies charge the services a % of the value food...


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## NicFit (Jan 18, 2020)

I’d do the same thing, not only did DD not ask for permission they were messing up the orders and getting negative review on yelp. He needs to order by the thousand and really screw over DD. I bet they stop after they lose 8k in a day although I wouldn’t hold my breath, they are kinda clueless


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## Disgusted Driver (Jan 9, 2015)

EastBayRides said:


> This is a head-scratcher. He shells out $16 per pizza to make $8?


Yes. Pays 16, gets 24. Makes 8.

This is only a head scratcher for uber drivers because they are mathematically challenged.

I did this to uber once just for fun. They were doing 50% off so I gave my wife a long ride. She paid something like 9, uber gave me about 12. We got paid 3 bucks to go to dinner. Not a lot but fun to screw them for a change.


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## waldowainthrop (Oct 25, 2019)

EastBayRides said:


> This is a head-scratcher. He shells out $16 per pizza to make $8?


He doesn't have to make the pizza. So $0 of material cost.

He pays Doordash $16. Doordash send a driver to pay his business $24 at the register. Doordash don't take a cut from the restaurant as he never signed an agreement with them.

Doordash subsidize the cost to grow their market share, presumably, something a sustainable business would never be able to get away with for long without massive external investment. Doordash is doing this to get customers, both those who want food and those who make food, by bribing those who want food with initially low prices. Doordash makes the most money on customers who get hooked on the convenience and pay more.

I don't know how long someone could get away with this for, but it's absolutely a way to make money virtually without any material costs.

The driver gets paid, too. But I bet he got no tip. This delivery was likely a money loser for that driver.


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## mbd (Aug 27, 2018)

Doordash got the $$$ infusion from SoftBank.
That is how they get their fake valuation through growth. Pump money , show growth and hope for a IPO or get bought out.


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## 197438 (Mar 7, 2020)

waldowainthrop said:


> The driver gets paid, too. But I bet he got no tip. This delivery was likely a money loser for that driver.


What delivery? You already concluded he doesn't make a pizza, so the driver would report it as no food or would have to take a kickback from the store owner (cutting into his $8 profit). However, the story says something about $75 in dough to make 10 pizzas = a profit of $85 minus overhead. If DD delivers a fake pizza to a fake location, he has to keep the total cost below $8. Seems like it would be far simpler to sell a real pizza for $24 and contact Google to remove the delivery option. The story fails the sniff test.



Disgusted Driver said:


> Yes. Pays 16, gets 24. Makes 8.
> 
> This is only a head scratcher for uber drivers because they are mathematically challenged.
> 
> I did this to uber once just for fun. They were doing 50% off so I gave my wife a long ride. She paid something like 9, uber gave me about 12. We got paid 3 bucks to go to dinner. Not a lot but fun to screw them for a change.


Wow, $3 minus expenses. You are a winner. Yet Uber still made more money than you.


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## Uber's Guber (Oct 22, 2017)

goneubering said:


> in another series of what Roy hilariously calls "trades," they just ordered pizza dough through DoorDash for $75 in pure profit.


Turning real dough into some real dough.
Brilliant!


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## waldowainthrop (Oct 25, 2019)

EastBayRides said:


> What delivery? You already concluded he doesn't make a pizza, so the driver would report it as no food or would have to take a kickback from the store owner (cutting into his $8 profit). However, the story says something about $75 in dough to make 10 pizzas = a profit of $85 minus overhead. If DD delivers a fake pizza to a fake location, he has to keep the total cost below $8. Seems like it would be far simpler to sell a real pizza for $24 and contact Google to remove the delivery option. The story fails the sniff test.


Look, I'm not defending scammy behavior. Maybe the reason why the fraud went public is because it was worth more to expose Doordash's incompetence than to make pocket change. They could make the pizza or not make the pizza. It's irrelevant to the story, because they weren't doing it as a part of running their business. It was a stress test of Doordash, and Doordash failed.

Defrauding Doordash is funny, but it's obviously a bad idea to do for long. They'd never make enough money to cover the risk of doing it.

If I found a loophole that de facto defrauds a business (even if that business was negligent or somehow might "deserve it"), I still wouldn't waste my time or draw any risk to myself by defrauding that business. It's telling that the author of the experiment said:



> Was this a bit shady?


Yeah, it was, but it's a great illustration of the problems with the gig/app economy's business model, so it was probably worth doing.

If you think that this story is not believable, that's up to you. It sounds plausible to me, given what we know about these sorts of businesses. Have you never paid $20 plus tip for a meal that should cost $30 plus tip? I've done it more than a couple of times - Doordash, Eats and the rest of them are willing to spend big bucks on customer acquisition. Lower-than-market prices are part of the game, and an enterprising person could easily exploit it to save a few bucks at the expense of the app incentives.


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## Iann (Oct 17, 2017)

EastBayRides said:


> What delivery? You already concluded he doesn't make a pizza, so the driver would report it as no food or would have to take a kickback from the store owner (cutting into his $8 profit). However, the story says something about $75 in dough to make 10 pizzas = a profit of $85 minus overhead. If DD delivers a fake pizza to a fake location, he has to keep the total cost below $8. Seems like it would be far simpler to sell a real pizza for $24 and contact Google to remove the delivery option. The story fails the sniff test.
> 
> 
> Wow, $3 minus expenses. You are a winner. Yet Uber still made more money than you.


If doesn't have to make the pizza then it's more profit for him. 
He still has the food, just never made it. 
So he just sells the same pizza for $16 now he has a profit of $24

It's a double up or more if his food costs are around 17-20%
It's about food cost.


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## NicFit (Jan 18, 2020)

He sent dough pizzas to a friend, so it costs him about $2-3 for the dummy food, the DD drivers aren’t checking orders which is why he started getting complaints on yelp. I don’t like third party tacking on to my business either, when I see the gogograndparents on lyft I decline. I didn’t sign up to them, I signed up for Lyft. Now if lyft has a number to call and they would arrange the ride I would gladly take the non internet users. Just makes me feel dirty and used when someone else is making more money off of what I’m doing


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## waldowainthrop (Oct 25, 2019)

NicFit said:


> I don't like third party tacking on to my business either


Yep - that's the point of the article and where the conflict originated. &#128077;&#127996;


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## jonhjax (Jun 24, 2016)

Here's an easy way to do this. Make 2 or 3 pizzas and have someone next door order one pizza and take delivery of it for a small fee, say $2.00. The customer, (your employee, maybe?) next door brings you the pizza and orders the same thing. He or she orders a pepperoni pizza one time a cheese pizza the next time, etc. etc. You keep recycling the same pizzas over and over all day. You have food costs for three pizzas but you "sell" a hundred or more of them.


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## sellkatsell44 (Oct 25, 2015)

DoorDash driver goes to pizza place to pick up order.

owner: oh! The guy was so hungry and impatient he came and picked it up himself, but hey, I still want you to get paid for the delivery ya? Here’s a twenty and go swing around the block and hit “delivered” and nones the wiser.

I mean, this is like my friend that did grad school work @ ivy won’t name which but he was hired to do work @ $75/hr, he paid an undergrad $30 to do it and then he self check it before turning it in.

there are those who work hard and then there are those who work smart. I rather be the latter, even if the jealous calls it lazy 🤷🏻‍♀️🤷🏻‍♀️


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## Uberchampion (Oct 17, 2015)

The restaurant owner was trying to prove a point, I dont think he was trying to profit from it.

A friend of mine owns a successful restaurant in a small town in Ontario. (Unfortunately Covid may change that) He felt pressured to go onto the Ubereats etc because his competitors were. 

He went years with a solid google rating with his own delivery service until he went in with these companies. Now items are missing from his orders or the food is cold etc. He mentioned that he sells a lot more food but it hadn't reflected in his balance books and he cant even count the amount of walkins he's lost because of the drop in ratings. The cut the delivery services sometimes are more than his profit. 

All the hard work he put in over years has been tarnished by the doordash/Uber Eats/Foodora's of the world that have no interest in quality and have focused on quantity. 

They charge so much for delivery services yet pay so little to the drivers and restaurants. It really is a shame. The only restaurants that make out well are the McDonald's of the world that deal in mass quantities


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## goneubering (Aug 17, 2017)

waldowainthrop said:


> Yep - that's the point of the article and where the conflict originated. &#128077;&#127996;


I posted the article because the headline made me laugh!!


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## whatyoutalkinboutwillis (Jul 29, 2017)

EastBayRides said:


> Wow, $3 minus expenses. You are a winner. Yet Uber still made more money than you.


As per the article, that's not the point. They don't have to make money that's why they give away trips at 50% off or bend over backward when riders complain.


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## _Tron_ (Feb 9, 2020)

jonhjax said:


> Here's an easy way to do this. Make 2 or 3 pizzas and have someone next door order one pizza and take delivery of it for a small fee, say $2.00. The customer, (your employee, maybe?) next door brings you the pizza and orders the same thing. He or she orders a pepperoni pizza one time a cheese pizza the next time, etc. etc. You keep recycling the same pizzas over and over all day. You have food costs for three pizzas but you "sell" a hundred or more of them.


Yeah, that's what I was thinking. Point of the story is well taken, but, if the pizza place didn't want to have a bunch of stale pizzas and their raw material cost at EOD they would just keep selling the same pizza over and over while running the "scam". No other approach would work. Must go with option 3.

1) Put a fresh pizza in the box... lose money. Can't re-sell stale pizza.

2) Put a dead weight in the box... busted by the driver the moment he tries to steal a slice and scrunch remaining slices together.

3) Put the same cold pizza in the box repeatedly. Driver checks but passes to wait for a hot pizza. Wants to complete the delivery and get tipped so doesn't report it.

Sounds like the bad Yelp reviews were a totally separate matter.


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## Mista T (Aug 16, 2017)

To add to his profit, he could have signed up for DD and made the 'deliveries' himself!


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## _Tron_ (Feb 9, 2020)

Mista T said:


> To add to his profit, he could have signed up for DD and made the 'deliveries' himself!


Brilliant!


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## Uberchampion (Oct 17, 2015)

https://torontolife.com/food/when-c...teurs-think-of-third-party-delivery-services/


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## Uberchampion (Oct 17, 2015)

Chicago is on the right track...

https://www.nbcchicago.com/news/loc...-to-disclose-itemized-cost-breakdown/2270630/


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## UberBastid (Oct 1, 2016)

EastBayRides said:


> Wow, $3 minus expenses


That's all we get for a canx.
Whats the dif?



Stevie The magic Unicorn said:


> It's news stories like this that will be the end of these services.


Good.



Uberguyken said:


> And see I would have closed to the public and done this all day long till they caught on. Eventually I'd have a driver let me hand them to him, walk outside, walk back in hand them back to me and he got paid too.... This would've gone on for weeks with me selling and buying empty boxes.


Me too. No limit and no cosequenses for collecting $3 canx fee every five minutes ... lesse, that is $36 an hour?
He could prolly 'make' a pizza every minute ...


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## Uberchampion (Oct 17, 2015)

https://www.ydr.com/videos/news/crime/2020/05/20/pushed-shoved/5228452002/


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## Stevie The magic Unicorn (Apr 3, 2018)

waldowainthrop said:


> Look, I'm not defending scammy behavior. Maybe the reason why the fraud went public is because it was worth more to expose Doordash's incompetence than to make pocket change. They could make the pizza or not make the pizza. It's irrelevant to the story, because they weren't doing it as a part of running their business. It was a stress test of Doordash, and Doordash failed.
> 
> Defrauding Doordash is funny, but it's obviously a bad idea to do for long. They'd never make enough money to cover the risk of doing it.
> 
> ...


How is it fraud?

There was zero agreement between door-dash and the restaurant...

He could have boxed up empty boxes with dish rags soaked in marinara, taped them shut and put them in the oven for a minute and had them all delivered to his brother's house.

zero agreement = no fraud...

Come to think of it...

What would the crime be?


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## waldowainthrop (Oct 25, 2019)

Stevie The magic Unicorn said:


> How is it fraud?
> 
> There was zero agreement between door-dash and the restaurant...
> 
> ...


Probably not legal fraud, but ethical fraud. They're tricking Doordash. Doordash left them the opportunity to do it, but that's not how their service is designed to be used.

It's not a crime but you wouldn't do this to a friend, even if the friend was stupid.


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## Demon (Dec 6, 2014)

waldowainthrop said:


> Probably not legal fraud, but ethical fraud. They're tricking Doordash. Doordash left them the opportunity to do it, but that's not how their service is designed to be used.
> 
> It's not a crime but you wouldn't do this to a friend, even if the friend was stupid.


What friends have bullied you into joining their business where you'll lose money?


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## Mista T (Aug 16, 2017)

waldowainthrop said:


> Probably not legal fraud, but ethical fraud.


Kind of like what the companies are doing to drivers and consumers, right? Nothing wrong LEGALLY with what they are doing ... supposedly...


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## waldowainthrop (Oct 25, 2019)

Demon said:


> What friends have bullied you into joining their business where you'll lose money?


Multilevel marketing. Bad consulting gigs. They are not my friends anymore.

It's funny you ask that because a lot of people get roped into bad deals by friends and family.



Mista T said:


> Kind of like what the companies are doing to drivers and consumers, right? Nothing wrong LEGALLY with what they are doing ... supposedly...


Yes.


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## Stevie The magic Unicorn (Apr 3, 2018)

waldowainthrop said:


> Probably not legal fraud, but ethical fraud. They're tricking Doordash. Doordash left them the opportunity to do it, but that's not how their service is designed to be used.
> 
> It's not a crime but you wouldn't do this to a friend, even if the friend was stupid.


I wouldn't do it to a friend no, but i'd do it to uber in a heartbeat, don't work with DoorDash enough to know for sure, i'll be honest I don't work with them so...i guess it would depend?

As far as "Doing that to a friend" i wouldn't charge a friend taxi rates to drive them around either. They'd get a discount in a heartbeat.

But business is business....


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## waldowainthrop (Oct 25, 2019)

Stevie The magic Unicorn said:


> I wouldn't do it to a friend no, but i'd do it to uber in a heartbeat, don't work with DoorDash enough to know for sure, i'll be honest I don't work with them so...i guess it would depend?


I am guessing Doordash is at least 80% as bad as Uber. &#128517;


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## Tony73 (Oct 12, 2016)

goneubering said:


> A pizzeria owner made money buying his own $24 pizzas from DoorDash for $16
> 
> 
> This must make sense to someone, right?
> ...


Hmm... sounds like fraud.


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## Stevie The magic Unicorn (Apr 3, 2018)

Tony73 said:


> Hmm... sounds like fraud.


But if the business owner doesn't have a contract is it fraud?


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## waldowainthrop (Oct 25, 2019)

Tony73 said:


> Hmm... sounds like fraud.


It sounds fraudulent but it might not actually be criminal. I think this falls into the category of being as equally questionable as some of the practices that gig economy companies engage in. Bad? Skirting the law? Exploitative? Often. Outright fraudulent? Usually not.


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## Stevie The magic Unicorn (Apr 3, 2018)

I don't see how it would be fraud if the owner has no contract with the delivery service, and the delivery service is selling below cost.

I mean it would be a civil matter but if there's no actual agreement than all said restaurant would have to prove is that they provided food for the _agreed upon price_ to the delivery service. If they are playing a third party and selling it for below cost that's on the delivery service.

Now if there WAS a contract, I personally think it would be exploiting SOMETHING and civil breach of contract and possibly fraud would probably be called for.


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## Boca Ratman (Jun 6, 2018)

EastBayRides said:


> What delivery? You already concluded he doesn't make a pizza, so the driver would report it as no food or would have to take a kickback from the store owner (cutting into his $8 profit). However, the story says something about $75 in dough to make 10 pizzas = a profit of $85 minus overhead. If DD delivers a fake pizza to a fake location, he has to keep the total cost below $8. Seems like it would be far simpler to sell a real pizza for $24 and contact Google to remove the delivery option. The story fails the sniff test.
> 
> 
> Wow, $3 minus expenses. You are a winner. Yet Uber still made more money than you.


Reading comprehension isn't your strong suit, huh?


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