>"I think it's a safe assumption that significantly more people order food from local restaurants than they did before DoorDash existed."
Why is it safe to assume that? Do you have actual data that backs that up? The presence of delivery drivers says nothing about the number of people that previously picked up their orders.
>'"Ponzi scheme" has been thrown around flippantly lately, and I think your comment is perfect example of that.'
How is that a flippant comment when the article we are commenting on states:
>"Competition in the sector has only intensified and the company has spent heavily to sustain growth by expanding its footprint in non-restaurant categories like convenience store items, groceries and alcohol. Last year, DoorDash spent $8 billion to acquire Wolt to increase its international presence."
The article then further states:
>"Under generally accepted accounting principles, however, DoorDash is unprofitable. The company reported a loss of $296 million compared with $101 million a year earlier during the third quarter."
How are those sums of money sustainable? Isn't that one of the defining characteristics of a ponzi scheme is that it is not sustainable?
>"So they did create a real market with a real product."
It's increasingly looking like that "market" was created by the pandemic. From a Deutsche Bank analysis of the company:
>"Deutsche Bank says that DoorDash drivers made 44% more deliveries in an hour at the height of last year’s pandemic lockdowns compared with three years earlier."[1]
And:
>"An average DoorDash order during the pandemic cost the customer almost $36, out of which the delivery company made less than $1 in profit."[1]
I think if you consider these paper-thins margins and the eye-popping sums being spent by Doordash to "sustain" growth" all while losing hundreds of millions of dollars a years, then "ponzi" is maybe not such a flippant comment.
I'm guessing they don't have another $8 billion to spend in order to acquire more growth which is why they are doing layoffs. Current market conditions would also suggest that would have trouble getting access to that kind of capital given those numbers above.
Why is it safe to assume that? Do you have actual data that backs that up? The presence of delivery drivers says nothing about the number of people that previously picked up their orders.
>'"Ponzi scheme" has been thrown around flippantly lately, and I think your comment is perfect example of that.'
How is that a flippant comment when the article we are commenting on states:
>"Competition in the sector has only intensified and the company has spent heavily to sustain growth by expanding its footprint in non-restaurant categories like convenience store items, groceries and alcohol. Last year, DoorDash spent $8 billion to acquire Wolt to increase its international presence."
The article then further states:
>"Under generally accepted accounting principles, however, DoorDash is unprofitable. The company reported a loss of $296 million compared with $101 million a year earlier during the third quarter."
How are those sums of money sustainable? Isn't that one of the defining characteristics of a ponzi scheme is that it is not sustainable?
>"So they did create a real market with a real product."
It's increasingly looking like that "market" was created by the pandemic. From a Deutsche Bank analysis of the company:
>"Deutsche Bank says that DoorDash drivers made 44% more deliveries in an hour at the height of last year’s pandemic lockdowns compared with three years earlier."[1]
And:
>"An average DoorDash order during the pandemic cost the customer almost $36, out of which the delivery company made less than $1 in profit."[1]
I think if you consider these paper-thins margins and the eye-popping sums being spent by Doordash to "sustain" growth" all while losing hundreds of millions of dollars a years, then "ponzi" is maybe not such a flippant comment.
I'm guessing they don't have another $8 billion to spend in order to acquire more growth which is why they are doing layoffs. Current market conditions would also suggest that would have trouble getting access to that kind of capital given those numbers above.
[1] https://archive.ph/ELq0m#selection-861.0-861.139