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Stories don't end's avatar

Former DD employee here. Can co-sign that the largest ordering segment was low SES millennials. I worked at Caviar which was eventually acquired by Doordash and my biggest shock post acquisition was how many low ticket size orders were going to low/middle income zips. Caviar only operated in big cities and our client base was wealthier. So it wasn't strange to see $200 of Han Dynasty going to the upper west side. But once inside Doordash, I was flabbergasted to see that their median order was a $12 junior bacon cheese burger meal going to a working-class neighborhood in Phoenix (+$10 in delivery fees, maybe a tip, maybe not. Sorry y'all. Doordash's hard data makes it clear that low income people are very bad tippers. $0 tips are WAY more common than you think. Doordash got sued for not giving all tip money directly to dashers. What you didn't see on the outside was that 100% of that money was making it to dashers, but they had some socialist redistribution going on to prevent anyone from ending up at the $0 tip. The lawsuit forced them to stop this practice)

I was so convinced that their business model was doomed to fail-propped up by stimulus checks from modest income housholds- that I sold all of my stock immediately after I left in '21. I greatly underestimated how many people are insanely bad with money.

Yes, there are some sympathetic cases in here of people with kids who want to save time but that's not most of what's going on. This is is driven by the same forces driving up gambling usage: a lack of cultural habits that engender pre-frontal cortex thinking/behavior.

Theodore's avatar

When I read the headline and the opening anecdotes - about people spending hundreds of dollars on delivery each week while they earn $50,000 a year - I was shocked, and expected the data to show *a lot* of DoorDash transactions. But, in fact, even in the group that uses the service most often the spend is about 1% of income.

That factor should be given more weight in the writeup, or you should explain why you think DoorDash deliveries are only a very small part of the overall volume of deliveries from all delivery services. Based on the DoorDash data, the people in your splashy opening anecdotes are highly, highly unusual consumers - spending 30% of their total income or more on delivery – and so a *very* misleading illustration of the typical pattern.

It is interesting, I do take the point, that people in lower income categories are spending more as a percentage of income than people who are wealthier. One speculation: they can’t afford more expensive luxuries so this is a luxury they allow themselves once in a while. But very few people seem to be driving themselves to ruin like the very poor decision-makers in the anecdotes that lead the story.

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