đ§ Thoughts
Thoughts and Learnings about Food Delivery:
A 4.5 star rating is not especially good*
The takeout food with the highest number of options available is - surprise - Pizza*
The average cost to get a Margherita delivered in Vienna is âŹ9.13*
We will see a rise in ghost/cloud kitchens
Its about due time that delivery services figure out their unit economics
A 4.5 â rating is not especially good
In my sample* 75% of restaurants had a rating of 4.5 of higher (and the average is 4.42). Critically speaking, having a scale from 0 to 5 is pretty useless - not a single restaurant (except the ones with 0 reviews) had a score lower than 3.5. That being said, if you come across a restaurant with 3.5 stars - better stay away from ordering there (only 5% of restaurants have such a low score).
The takeout food with the highest number of options available is đ
According to history, with King Humberto and Queen Margherita of Italy (yes, the latter one is also the name giver of the most famous pizza of all) âinventingâ the pizza delivery service in 1889, pizza was the first âproperâ meal that has ever been delivered. And the legacy of the baked dough disc with tomato sauce continues until today - on a Saturday evening you can order more than 3,000 different pizzas in Vienna1. Thatâs far more options to choose from than for any other dish. âSomething with Chickenâ takes second place (660), Burgers are third (576) and Maki are coming in fourth (441).
The average đ° to get a Margherita delivered in Vienna is âŹ9.13*
Looking at all Margheritaâs contained in my sample2 (as well as two âMargharitasâ), on average you will have to pay âŹ9.13 to get one delivered. According to this interview with a Pizza place owner in Vienna, delivery services charge 30% provision from the price the customer pays plus âŹ1 per delivery. Thus, the restaurant owner is left with âŹ5.09. Same restaurant owner also stated, that this leaves him with a margin too low as that he would be able to cover all his costs solely with delivery (even if he had the same number of customers as pre-COVID). Which leads me to the next pointâŠ
We will see a rise in đ» / âïž kitchens in the future
Currently, many restaurants are paying rent for dining facilities they are not using, often in prime locations. Although, there will certainly be a run on restaurants post-COVID, food delivery will continue to account for a substantial share in the overall âdiningâ market. This makes so-called ghost or cloud kitchens (aka. delivery-only restaurants) an interesting business opportunity. Being able to cut costs on waiters, dining space and dishwashers, ghost kitchens can operate much more cheaply than traditional restaurants. Further, they donât necessarily need to be located in high-rent areas. Of course, proximity to the inner city is a necessity to keep delivery times short, but ghost kitchens could potentially be set up where rent is cheap(er) e.g. side streets or basements. In the U.S. there is already a company setting up pop-up ghost kitchens in empty spaces. Also for Vienna thatâs not a new concept - delivery service Mjam itself operates several ghost kitchens (more details and a list here). Another twist on this are âcloutâ kitchens which are effectively cloud kitchens branded with a celebrity. Existing examples are, among others, Mariah Careyâs Cookies or Mr. Beastâs Burger which launched in 200 locations over night (this blogpost covers the background story in more detail). Maybe weâll see âHĂ€uplâs Schnitzel + Spritzwein Deliveryâ and âDariadariaâs Vegan Bowlsâ sometime soon in Vienna?
Its about due â±ïž that delivery services figure out their unit economics
Despite riders earning only very little (between 8 and 12 ⏠/ hour), food delivery services are still making losses. Delivery Hero, the company behind Mjam, had an operating loss of more than ⏠440 million in the first half of 2020 alone. In fact, their relative costs of sales increased within the last year from 67% to 83% (i.e. the money they spent on actually providing their services as a share of their total revenue).3 This contradicts the idea that an increase in sales volume is accompanied by higher productivity (which could have been one way for them to become profitable). The other way is to drive up prices - it will be interesting to see whether/when this will happen and how customers are going to react.
đ Bonus: There is only one single pizza restaurant delivering to the 7th district with a 5 star rating. Itâs operated by a Kebab company. If you still want the name, email me.
đ Curated Recommendations
More Antifragile, Diversity Libertarianism, And Corporate Censorship [Artcile]
An essay about fragile things (nuclear power plants) and anti-fragile things (pizzas) - an interesting mental model to add to oneâs inventoryâOr more generally: in an area with frequent catastrophes, where the catastrophes have externalities on people who didnât choose them, you want to have lower variance, so that nothing ever gets bad enough to produce the catastrophe.
In an area where people can choose whatever they want, and are smart enough to choose good things rather than bad ones, you want to raise variance, so that the best thing will be very good indeed, and then everybody can choose that and bask in its goodness.âHow Many Microcovids Would You Spend on a Burrito? [Article]
The story of a shared house in San Francisco trying to quantify the risk of getting COVID for every action in their daily lifeâRelentless tabulators often come off as zealous, maybe a little paranoid, and certainly no fun. Luckily, Olsson shares a house with fellow tabulators. She and her five housemates needed to find a way to live safely together. So they decided to adhere to a collective risk model of their own design. Any model is only as good as the data that goes into it, and the virus was too new for anyone, even experts, to have perfect information. Olsson and her housemates knew this, but they werenât going to make the perfect the enemy of the good. They wanted to protect themselves, and by extension others, by making responsible choices. But they also wanted to be more free to actually live. Maybe math would make that possible.â
How Polyamorists and Polygamists Are Challenging Family Norms [Podcast/Article]
A reportage putting into question current social norms about family life
âLoneliness is epidemic in contemporary life, but, to a child of polygamous parents, the condition seemed implausible. âMy life was so full of people that that didnât even sound like it was a real thing,â the wife said. What struck me most during my interviews in polygamous and polyamorous communities was that these extensive families created a world sufficient for even their most hesitant members. Shirlee still seemed to struggle with her ambivalence about the system into which she was born. âPatriarchal structures are horrifying for women, and that includes monogamy,â she said, as we walked around the town. âBut if some people choose to live polyamory or polygamy and it works for them, hallelujah, right?ââ
âš Random
Some further good news for Italian Food lovers - somebody invented a new pasta shape that is engineered to maximize the amount of sauce that sticks to it
This page allows you to mimic a bad connection or construction work noises to help you escape a zoom call
During my research I came across this:
On the one hand, I guess itâs an interesting and innovative move to draw attention to a job opening. On the other hand, I definitely donât know any SEO, so not sure how effective it is in the end.
A collection of pictures of how people in the past imagined the future
*Analysis is based on a sample from one of the major delivery services in Vienna, consisting of 170 restaurants that deliver on a Saturday evening at around 8:30pm to locations within the 7th district. Considering the comparatively small sample size, conclusions should be taken with caution.
Summing up all the different pizza offers of all pizza restaurants. Also pizzas differing only in size count.
Based on a subsample of 79 different Margherita offerings (between 20cm and 50cm in size) coming from 46 different restaurants.
Delivery Hero: Halbjahresfinanzbericht 2020.