- The Finance Gourmet

DoorDash IPO Worse Than WeWork Disaster?

December 3, 2020 by Finance Gourmet

Yesterday in my December outlook for stocks, I alluded to the fact that the DoorDash IPO was perhaps overly optimistic about its profitability and the company’s ability to keep any semblance of that profitability in a post-pandemic world. MarketWatch Calls DoorDash IPO “Most Ridiculous” Someone over at MarketWatch isn’t waiting for investors to read between the lines with an opinion piece claiming that the DoorDash offering is the, “most ridiculous IPO of 2020.” The piece goes on to make the claim that the DoorDash IPO offering may even be worse than the WeWork IPO disaster that they previously proclaimed, the Most Ridiculous IPO of 2019. The article goes into the numbers in details, but the long and the short of it is this: DoorDash barely squeezed out a profit on $1.92 billion of revenue for the first nine months of 2020. That amount of revenue is 3x last year’s revenue due to a huge increase in the food delivery market thanks to the Covid pandemic. If you can’t squeeze out a profit in the very best possible market, how can you be profitable ever again. DoorDash can’t raise fees and expenses due to numerous competitors. In fact, its fees are …

Food Delivery Apps Face Backlash

May 18, 2020 by Finance Gourmet

It looks like food delivery apps, which had previously flown under the radar of scrutiny have overplayed their hands during the pandemic recession. Food Apps Charge Restaurants Huge Fees Restaurants are no strangers to the outrageous fees charged by delivery apps like Grubhub, UberEats, and Door Dash. Restaurant owners can be charged up to 30% of the price of the overall order. This is on top of the fee charged to the customer ordering food. All three apps actively post a laughable “delivery fee.” This amount is displayed predominately and is typically a low number, like $2.99. Then, this fee is often “waived” as part of some sort of promotion, giving the impression that the customer is getting free delivery. The real fee charged for delivery, however, is hidden by combining it in a line called “taxes and fees.” Obviously, the apps hope people don’t pay too much attention to this line. Pandemic Recession and Restaurant Survival Before the pandemic recession hit, customers and lawmakers all had pretty much the same thoughts. If you want to use the delivery services to reach customers, then you have to choose to pay their rates, whatever they are. If the charges were too …