Food Delivery Apps: Last Week Tonight with John Oliver (HBO)

our main story tonight concerns food

delivery the thing that can turn a

lethally depressing Saturday night into

a lethally depressing Saturday night

with pad

tie specifically we're going to talk

about food delivery apps you are

probably familiar with them whether

you're a user or a viewer of their

constant ads featuring everyone from

Jennifer Aniston to Big Bird to this

Uber Superbowl one starring none other

than Diddy and I'm guessing Uber Eats

might be regretting that last one right

now now they've even released ads for

special occasions like this what are you

eating this

Pride well if you're a top it seems like

you can eat whatever you

want but if you're a bottom you're

expected to

Star not this Pride introducing the

bottom friendly menu from

Postmates that is a real act for a

bottom friendly menu from Postmates

featuring an eggplant in leather fetish

gear looking like a character from tals

who escaped their Evangelical upbringing

and found happiness and by the way it is

good to see the Peach from call me by

your name staying booked and busy gay

Parts should go to gay actors but even

Beyond unlisted sex diet tips people use

delivery apps for all sorts of reasons

and some very good as this Driver F door

Dash explains it's all it's all sort

it's the average customer it's like it's

not like a bunch of lazy people it's a

lot of people need this because they're

too busy with kids or or they don't have

a license for whatever reason people

also that are just drunk or stoned and

they don't want to drunk they're

actually being responsible and they

don't want to drive and get the food

themselves so I'll deliver to them you

know there's plenty of times I'll come

to a door and the door will open and so

much pot SM com from and the person's

eyes are like super red and I love that

I think that's so funny it's like some

guy he's like college age and he's just

like oh thank God the food's here yeah I

love that too I I know that might be

hard to believe from me someone who

looks like he's only ever confiscated

weed but I'm all about the sticky icky

I'm like Miss Piggy the way I'm hitting

that green even now I'm as high as a

giraffe's and as faced out as a

ninth grader's essay trying to meet the

page limits I get it okay but even if

you are not stoned these apps are

incredibly convenient and the truth is

if you weren't using them before 20120

you almost definitely have since because

early on in covid after inperson dining

shutdown their growth

skyrocketed sales for delivery apps

nearly doubled and haven't gone down

since these apps basically have the kind

of meteoric pandemic eriz that Skype

absolutely thought they were in for and

what happened Skype you had it and you

lost it we used to use Skype as a verb

to mean to video call someone rather

than what it means now to completely

up the easiest opportunity

imaginable the pandemic truly was a

watershed moment for delivery apps and

they marketed themselves heavily as the

saviors of the restaurant industry

restaurants are our family the

Cornerstone of our communities and our

family needs

help right now they're facing a crisis

and they're counting on your takeout and

delivery orders to help them

through because if we don't treat

restaurants like family today they might

not be around to treat us like family

tomorrow GrubHub together we can help

save the restaurants love wow that hits

all the check marks of every pandemic

era ad soft twinkly piano music check

and E cleed cross-section of races ages

ethnicities and genders check a vague

threat that if we don't participate in

capitalism the things we hold near and

dear will be destroyed checky check but

even as our usage of these apps has

increased there's been a rising chorus

of criticism regarding their business

models perhaps summed up best by this

New York City council member when you

see something

uh it sucks the blood out of anything

you call them leeches and that is

exactly what GrubHub is it's true when

you see something that sucks the blood

out of anything you do call them leeches

also if you see something that has 10

stomachs 32 brains nine pairs of

testicles and several hundred teeth

that's a leech too but admittedly

doesn't apply quite as neatly here and

while that might sound harsh to you it's

not totally unfair because for all the

convenience these apps provide us the

customers they come with a huge cost for

everyone else involved from restaurant

owners to those delivering our food so

tonight let's talk about delivery apps

and first let's talk about what food

delivery used to look like picture it

it's it's 2003 and you're at home hungry

after a long day of work at Blockbuster

Video so you check out the giant stack

of takeout menus you keep in a drawer

then trigger warning for anyone under 30

you'd make a phone call to a restaurant

say you're order out loud to a person

who worked there and then a delivery

worker also hired by the restaurant came

to drop it off then you tipped in cash

and chewed back into American Idol to

watch the most famous person in the

world Ruben

studded the system was by no means

perfect but restaurants made a profit on

your order and delivery drivers were at

least theoretically paid as employees

but over the past decade apps have

fundamentally shifted that model now the

ordering part tends to take place via an

app which then contacts a delivery

driver who typically does doesn't work

for the restaurant who transports the

food to you and to be fair there have

been some upsides in this model for

restaurants there's definitely a lot of

positives and one of them is like

knowing that there's a delivery guy

nearby to pick up their food and we

don't have to have someone on staff we

would need about 15 guys here at all

times right before delivery apps that

owner would have needed 15 guys just

standing around at all times which

honestly sounds less like a restaurant

or more like someone describing an orgy

that didn't quite take off off and abs

will point out that they also put

restaurants menus in front of hungry

people which can help them with reaching

more customers and growing Revenue but

Revenue isn't the same as profit and

let's talk about how exactly these

companies make money because they make

some off the various fees that you might

see when you order but they also charge

restaurant's 15 to 30% of an order in

commissions and that number can get even

higher when apps charge restaurants

additional fees for everything from

boosting their placement in the app to

making them part of special promotions

and especially during the pandemic when

online orders were basically the only

ones coming in restaurants who'd signed

up for an app could be unpleasantly

surprised when they saw just how little

was left after the apps had taken their

cut we signed up with during this

pandemic is just any way to get any

income to have cash on hand to be able

to keep our staff this was grubhub's

Bill to the Warren out of total orders

of more than

$16,000 GrubHub gave the restaurant only

about 7,000 back it was equal to 42% of

our sales we got so they took 58% of it

it's true they took 58% of their sales I

I know that just saying percentages at

you might not be that helpful even

though you know you are watching an

episode of numbers being yelled at you

with human

Squidward but 58% is a lot now GrubHub

insists that that restaurant agreed to

those fees upfront and that 58% is an

outlier but it's worth noting the

Washington Post recently ran an

experiment where they ordered the same

meal for from this restaurant in San

Francisco on three different apps the

meal itself cost

$2.69 before fees taxes and tip and when

they contacted the restaurant they found

that for Uber Eats the restaurant got

1448 back for GrubHub it got 1247 and

for door Dash it only got

$10.59 those are Mafia margins also as a

quick side note what a fun assignment

for a journalist that was sometimes

journalists track down sources or pour

through thousands of pages of documents

other times you get to order chicken

Palm a bunch of times in a row it's

really the luck of the draw but it's

gotone to the point where many

restaurants have taken to increasing

their prices on the apps to at least

partially offset those fees that is why

you may have noticed food often costs

more on an app than it does at the

restaurants and you might think well

restaurants should just refuse to be

listed on these sites then but resisting

them hasn't always worked apps of

repeatedly added restaurants against

their will in DC alone GrubHub was

accused of listing more than a thousand

restaurants available for delivery that

they didn't have contracts with and if

you're thinking well I still don't see a

problem they get to be on the app

without paying for it there are actually

multiple issues there not every Rost

restaurant wants to do delivery or is

even set up for it and Grub hubs been

accused of not warning restaurants

before listing them leading to them

being suddenly inundated with orders

they never expected one in California

even complained about grubhub's venu

listing food that it does not actually

make and has never made

basically GrubHub would list a

restaurant without its permission or

knowledge and then make money by

charging you a high delivery fee to

bring the food to your door but that

might put the restaurant itself in a

tough spot because they might be

disappointing customers in ways they

don't even realize M Street Baking

Company in Howell is open for takeout

during the pandemic like many

restaurants they were approached to join

GrubHub for food delivery but declined

we found out that they were sending

people in pretending to just be regular

customers but actually working for

GrubHub and delivering our stuff without

our knowledge they were offering

milkshakes we don't put Lids on our

milkshakes because they go directly to

you so now it's going into somebody

else's car that they could cough on

sneeze on as a business if I knew that a

second party was handling your food I

would package your products probably

differently than if I knew it was going

right to you yeah of course you would

and I am glad about that because I for

one do not want to drink a milkshake

that's been raw dogging the air in

Kyle's VAP Smoke Filled Honda Civic and

the thing is this practice has been

standard in the industry right from the

start just listen to the founder of

Postmates talk about the company's early

days when we launched Postmates 3 years

ago we did deliveries from Chipotle's

restaurant and we got a seasoned assist

from them and they said we got a

seasoned assist from them and they said

like guys we don't really we're a little

bit concerned about the food quality

right but you know what do we had to

lose so we decided to ignore it oh you

did did you that's fun and imagine

getting lectured on food safety by

Chipotle the biggest red flag imaginable

and blowing that off also I just want to

go back so you can see Jim Kramer's

expression there because this is the

happiest I've ever seen anyone look he

is positively giddy at this story of

corporate recklessness he looks like a

kid meeting a dog for the first time no

one has ever been happier than this and

in the case of of GrubHub it's

occasionally engaged in tactics that

seem more like a protection racket for

instance in 2020 it allegedly listed

restaurants that didn't partner with

them as closed or not accepting online

orders even when they were which feels

especially shitty coming from the same

company that made that ad saying that

together we can help save the

restaurants we love I guess GrubHub just

forgot to add and burn the ones that

don't make us money to the

ground it is no wonder restaurant owners

have increasingly turned on these apps

liking them to a hostage situation and

selling your soul to the devil which is

if anything too kind at least when you

make a deal with the devil he offers you

something cool like a sick Golden Fiddle

in return and he surrenders even when I

think there's a pretty good case that

he's the better Fiddler sure Johnny does

rosin up his bow and play that fiddle

heart but he's sampling old folk songs

there's nothing original there the devil

however is playing an original dissonant

composition backed up by a band of

demons he's bringing way more to the

musical table now we don't have time for

me to play both sides and fully convince

you but go listen to that song again and

tell me you're not having way more fun

listening to the

devil happy Easter by the way but it's

but it's not just the restaurants that

these apps can harm it's also the

delivery workers in most places

delivering for these companies is gig

work you set your own hours and drive as

much or as little as you choose and

companies have sold this as a great

thing GrubHub runs recruiting spot

showing Happy People balancing child

care careers as artists with working

part-time doing deliveries and other

companies make similar claims sometimes

in wildly over-the-top ways like the

head of door Dash here I think in many

ways Dashers on door Dash look very

similar to consumers in the sense that

um they value their time um as much or

sometimes more um than money and and and

they in effect are choosing um you know

some of these part-time gig

opportunities so that um they can you

know save for a project whatever that

may be whether that's you know buying a

gift for someone or starting an

orphanage what did you just say starting

an orphanage the are you talking

about orphanages aren't generally side

hustles you don't tend to see Rachel

shelter for loose babies but I guess if

you're a Tech Pro you've got it all

planned out first you get a bunch of

venture capital to disrupt the orphanage

space then you Corner the orphanage

Market automate it with robot workers to

take care of the kids create a rating

system for potential adoptive parents to

rate the baby's Vibe fire babies who

fail said Vibe check zero Severance

obviously make wild claims about future

profitability and before you know it

boom it's IPO time Innovative profitable

orphanages but the truth is for many of

those engaged in Gig workor it's not a

side job it's their main source of

income and that can be a real problem

when you consider that delivery apps

classify their workers as independent

contractors meaning they have to pay for

all of their own expenses and as this

guy in New York explains that can be a

lot the bike itself cost between $1,800

and $1,900 new I upgraded it in many

ways for example the seat the phone

holder so I can have it over here this

battery cost me almost $450 so the total

would be up to $2,500 because of only

the bike cost $1,800 plus the battery

that's $2,200 and I had to buy the

backpack because the companies don't

give you one and a helmet because they

don't give you one either look that is

all ridiculous but the backpack might be

the most egregious part there this is a

backpack you can't use for anything else

imagine using it for school unless

you're a second grader who shows up

every day with a social studies book a

PBJ and 13 orders of pad key ma it

doesn't really work but the expenses are

just the beginning here workers are also

at the mercy of the app's opaque

algorithms which are used to dictate

speed behavior and ultimately the wages

of the workers many apps set up a

game-like system of rewards and

penalties offering high scores for being

on time and low scores and fewer orders

for tardiness and of course a

significant part of that system is

negative reviews you might think a bad

review is going to a restaurant or the

app itself but all workers know getting

one can severely restrict your options

going forward in fact just a few

negative responses have the power to dry

up worker income or even get them booted

off the platform alt together and those

who've studied this will tell you that

Dynamic is a significant problem much of

reputation systems were put in place to

be able to give consumers reviews of

products that doesn't transfer well to

workers effort turning it into the

equivalent of

evaluating whether we got a good coffee

that place where there's slippage

between a product and a

person's um labor is is dangerous will

replace the tyranny of the boss with

tyranny of an

algorithm and that is much worse I will

tell you as a computer scientist I will

tell you that that's much worse right

that is a terrible system workers have

even called the algorithm the patron

fantasma or Phantom Boss which sounds

like a reality show on Max that somehow

already has 12

seasons and this downward pressure is a

big part of why you might see delivery

workers speeding or going the wrong way

down the street on their bike the clear

incentive is to make as many orders as

you can as quickly as you can even if

that means compromising safety and

speaking of safety these jobs can be

risky in cities like New York delivery

workers are constantly dodging traffic

and have been robbed and attacked and

that's even before people ask to bring

them food through extreme weather like

blizzards and even floods and by the way

don't do that if you see a flash flood

warning pop up on your phone and

immediately opened GrubHub sorry you

don't get to go to heaven that was the

test and you failed it it is frankly no

wonder that delivery driving is among

the deadliest occupations in the country

and because these workers are

independent contractors apps don't have

to pay for their health insurance in

fact one survey found that of those

who'd experienced a work rated injury

three out of four delivery workers said

they paid for medical care out of their

own pocket all of which can lead to

things like this supposedly heartwarming

human interest story from January about

a video that had gone viral bro what are

you doing are you serious I got bills I

respect that dude that's crazy this is

how Kevin Ross has been making a living

delivering food on a bike with a broken

foot watch as he straps a walker onto

the bike so he has support when he goes

inside restaurants back in September

Kevin says he was making a delivery for

GrubHub when he was hit by a car I got

hit I I blacked out next thing I know

I'm in the hospital he needed surgery

and doctors told him recovery would take

months but with hardly any savings he

had no choice but to get back to work

well hold on no choice what do you mean

GrubHub says they're all about giving

their delivery workers choice they get

to choose their own hours choose to run

a red light rather than be punished by

the algorithm and they get to choose to

get back to work while severely injured

instead of facing crushing medical bills

they've got more choices than S haven't

seen the

movie so workers are vulnerable because

they lack labor protections and health

insurance and all of this risk is in

service of a job where like

unfortunately most service jobs most of

their income comes in the form of tips

which can make up a third to half of

their total earnings but the thing is

those tips obviously aren't guaranteed

The Verge interviewed a delivery worker

who reported biking from 77th Street on

the Upper East Side 18 blocks south and

over the Queensboro Bridge then up

through Long Island City and over

another bridge to Rosevelt island or to

deliver a single slice of cake for no

tip at all and look I get that if you

ordering delivery on a single slice of

cake you are clearly going through

something because that is the single

saddest order any human being could make

but you got a tip and and this

what you're probably thinking wow these

companies are driving restaurants and

delivery workers to ruin just to make

massive profits so you might be

surprised to hear this we should start

by acknowledging that today Uber Eats

does not make money Janelle salenave is

head of Uber Eats we've been very uh

public about the fact that it's not yet

profitable and neither are her

competitors the platforms themselves

lose a ton of money in the hundreds of

millions of dollars billions

collectively why does this business even

make sense I'm not sure it does and I

think they're still trying to figure out

how to make money of this even today wow

they're still trying to figure out how

to make money at this these are

companies valued up billions of dollars

and yet they'd be talked about the same

way you talk about your cousin who sells

jewelry on

Etsy and while that might sound

counterintuitive it actually makes

perfect sense because the old menus in a

drawer form of delivery set certain firm

limits it involved One Restaurant

directly hiring a delivery worker who

then delivered food to a limited area

but these apps introduce whole new

categories of cost of the equation from

marketing to lobbying to building and

maintaining a whole website and they're

basically following the classic Tech

disrupt a model of using Wall Street

money to grow at all costs Corner a

market undercut their competitors and

then buy them up or with the ultimate

goal of monopolizing the sector and then

massively raising prices think about how

Uber and Lyft used to be much cheaper

than traditional taxes and then once

they dismantled that model they jacked

their prices way up we're just at the

point in the cycle where companies can

lose a ton of money keep prices low for

consumers even as they try and offset

that by squeezing restaurants and

delivery workers at the bottom but the

consolid solidation era has very much

begun uberit bought Postmates door Dash

bought caviar and GrubHub merged with

seamless in fact GrubHub and door Dash

alone comprise more than 20 companies

that once competed with one another and

some of these companies will tell you

that that they're now either breaking

even or turning a slight profit though

some of those claims have significant

caats to them but in general we're

currently in a weird situation where the

restaurants are losing out the delivery

workers are losing out and even the

companies are struggling the main winner

so far has actually been us the

customers because as this business

journalist points out we're getting an

incredibly convenient service and paying

less than it's technically worth I call

this the millennial lifestyle subsidy

right every single time that you're

using door Dash or using Uber you're

getting a little bit of money back from

these companies they're saying we're

never going to charge you as much as the

service actually costs so I think it's

ironic I think it's interesting and I

also think it just can't last and he's

probably right though personally I find

it a little hard to get mad at the idea

of Millennials getting some sort of

subsidy in life after all this is a

group who will never be able to afford a

house is drowning in student debt and

can't even enjoy Harry Potter anymore

you can't spell millennial without three

massive

L's but if it truly is the case that

we're headed to a point where a few

massive companies dominate this industry

now might be the time to talk about

putting some real guard rails up and I

will say some places are trying here in

New York thanks to the hard work of

among others a collective of delivery

workers called Lost delivery stas unidos

the city passed a law that guarantees a

minimum pay rate for delivery workers

but the apps haven't made it easy once

that rule rolled out they increased

their fees to users and restaurants and

tried to reduce the end price to the

consumer by making it harder to find the

Tipping option if you live in New York

check to make sure you're still tipping

people cuz it's possible that you're not

and in California the state passed a law

in 2019 expanding protections to Gig

workers but some of the big delivery

apps along with r chair companies and

others pushed a ballot proposition

called prop 22 that would carve

themselves out of that law and they went