Doordash and Pizza Arbitrage

He felt it would detract from focusing on the dine-in experience and result in trying to compete with Domino's.But he had suddenly started getting customers calling in with complaints about their deliveries.Customers called in saying their pizza was delivered cold. Or the wrong pizza was delivered and they wanted a new pizza.Again, none of his restaurants delivered.He realized that a delivery option had mysteriously appeared on their company's Google Listing. The most common was, Doordash delivery drivers didn't have the proper bags for pizza so it inevitably would arrive cold. A pizza that he charged $24 for was listed as $16 by Doordash.My first thought: I wondered if Doordash is artificially lowering prices for customer acquisition purposes.My second thought: I knew Doordash scraped restaurant websites. After we discussed it more, it was clear that the way his menu was set up on his website, Doordash had mistakenly taken the price for a plain cheese pizza and applied it to a 'specialty' pizza with a bunch of toppings.My third thought: Cue the Wall Street trader in me…..ARBITRAGE!!!!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. A Doordash call center then called into his restaurant and put in the order for those 10 pizzas. Maybe this is why he runs an "actual business" while I trade options while doing brand consulting and writing newsletters.But we did realize, if you removed the food costs this could get more interesting.Trade 2The order was put in for another 10 pizzas. Grubhub just lost $33 million on $360 million of revenue in Q1.Doordash reportedly lost an insane $450 million off $900 million in revenue in 2019 (which does make me wonder if my dream of a decentralized network of pizza arbitrageurs does exist).Uber Eats is Uber's "most profitable division” 😂😂. In one quarter.Amazon just bailed on restaurant delivery in the U.S.What is it about the food delivery platform business? Diners are seeing their costs raised, either by delivery companies that need to pay delivery drivers or by the restaurant owners who raise prices to offset delivery fees.