Wait… what? Labor is so expensive that people can’t afford DoorDash?
If labor were so expensive, wouldn’t the customers (who presumably get their money through working) be able to afford this service? Do DoorDash workers get paid more on average than the people that they deliver to?
The bottom few deciles might earn enough money to dig themselves out of debt, or save up for the next car repair. The next few might be able to send their kid to a better school or put together a down payment. The next few might prioritize going to the dentist. And only the top 2 deciles are willing to spend the money for a $30+ per meal. Hell, I earn multiples of the median, and I would not pay $30 for a meal that has a 50%+ chance of being shitty.
Either way you want to classify it, the number of people and the frequency with which they will order off DoorDash very well may not sustain their business.
Are you claiming that DoorDash would be more affordable if (and only if) they reduced wages? I don’t really understand the assertion that of all of the possible factors that go into pricing that it’s important to focus on driver compensation.
>Are you claiming that DoorDash would be more affordable if (and only if) they reduced wages?
No, I am claiming all delivery services would be cheaper if they had to pay less for labor.
>I don’t really understand the assertion that of all of the possible factors that go into pricing that it’s important to focus on driver compensation.
It sets a bottom limit on the price on the service. Driving 1 minute costs $0.60 (rough estimate from IRS milage rate), and then you have to add driver's profit to actually do the job. Even if you assume the IRS rate is on the high side, you're still looking at at least ~$15 of costs for the delivery recipient for a 15 min delivery.
Maybe you can get this down by bundling deliveries a bit, but I think it remains to be seen if it can really be brought down enough to make it cheap enough to drum up the volume DoorDash would need to sustain their operations.
If labor were so expensive, wouldn’t the customers (who presumably get their money through working) be able to afford this service? Do DoorDash workers get paid more on average than the people that they deliver to?