Anyone know if it would be considered fraud and/or illegal to exploit this? I would consider doordash and grubhubs tactics of falsely representing themselves as restaurants to be more unethical. It would be great if someone could scale a solution that would take those arbitrage opportunities and pass them on to the drivers and the restaurants.
Your case is more clear cut because that is a glitch in the website. It seems that in this case Doordash is offering a promotion. Calling that fraud would be like calling taking advantage of reward points fraud.
Meanwhile, door dash never asked for the restaurant to participate in the "promotion," so screw them... They are offering to deliver boxes of dough at deathly inflated prices, with no other agreements with the restaurant. How is taking advantage of that "service" fraud?
Exactly. That's the real problem. Even if it's just a "trial". Somehow getting a delivery number on the restaurant's listing without their knowledge or consent is abuse. Good thing they get punished for it.
This made me wonder: what if a restaurant puts a pain dough "pizza" for $30 on their menu?
Of course, no one would order it. But in this situation, an aggregator could offer it and the restaurant owner could take advantage of that.
It smells like fraud, except that every individual step seems legitimate (albeit weird). I'm pretty sure you're allowed to charge ridiculous prices for common goods if you so choose...
It still requires the aggregator to offer it for less that $30 (at least the cost of dough less). Which, at least in this case, seems to requires a scraping error.
That's not how this works. The glitch is that there's a particular menu-item mispriced by Doordash. You can't just order arbitrary things at arbitrary prices, and when the restaurant takes an order for X and delivers Y, it's taking a step towards making a material false statement to obtain something of value.
It seems like it would depend on who's initiating the action.
While the restaurant preparing "partial" pizzas to ship to coordinated orders is obviously fraud, I'm not so sure "Asking the restaurant owner about their costs, then independently ordering a large number of pizzas" qualifies.
It's not your responsibility if Doordash has shit code and auditing. And given VC-onomics, it's not even clear how you would be certain this isn't "operating as intended."
> While the restaurant preparing "partial" pizzas to ship to coordinated orders is obviously fraud
How so? They're making the pizzas the way the customer wants them. The 'objective' tastiness is none of the delivery middleman's business. And there's nothing wrong with offering a bad pizza for $24, as long as the customer knows what they're getting.
Well, if the restaurant reimburses the customer after, it probably would become a problem.
Way around this: private owner places his own orders as customer, pockets profits as owner. That might be legitimate - but remember: if you take legal advice from the Internet, you get what you paid for.
(IANAL) My gut says coordination would be be evidence of both (a) premeditated intent & (b) knowledge that actions constituted fraud.
One could place a personal order (or 100) innocently.
One looks substantially less innocent when coordinating with a third party to place orders and transfer money around.
While that speaks to the severity of the crime (if one were proven), as you noted, it doesn't in any way impact whether that behavior is a crime at all.
But who's defrauding who? If the doordash website says I can buy a dough pizza for $19, then doordash has to get me a dough pizza for $19 when I buy one. No fraud is happening, doordash is fulfilling the requirements of the contract they make with all their customers.
If anything, the one who's committing fraud is doordash, because they're putting in "takeout" orders with the restaurant and presenting them as "delivery" orders to the customer.
In the example from TFA, Doordash says you can buy a pizza for $16 and charges you $16. The restaurant menu price is $24, and Doordash pays $24 for the pizza. That's... the starting place. (As screwy as it is)
Now, if I order a dough pizza for $16, in coordination with the restaurant, and Doordash pays $24 to the restaurant, and the restaurant gives me a dough pizza, and then the restaurant makes it worth my while, what do we have?
Doordash has been paid $16, and spent $24 + (cost of delivery) = (-) SoftBank money
The restaurant has been paid $24 and spent ~$1 (cost of dough pizza [1]) = ~$23 profit (minus labor)
I paid $16 (let's ignore tip). The restaurant reimburses me for that (me: $0, restaurant: $7) to make it worth my while, and then splits profits with me (me: $3.50, restaurant: $3.50).
So at the end, Doordash: -$8 - delivery cost, restaurant: $3.50, me: $3.50.
It's the reimbursement of the customer that seems... suspect.
The way to ethically monetize this would be for restaurants to target Doordash misprices, and "sell" coupons (a food box, containing only a paper coupon), good for future food orders directly through the restaurants. Then encourage all their customers to buy as much as possible.
[1] We'll say we return and recycle the boxes, being environmentally conscious citizens
If you intentionally sell a product for cheaper than you buy it to build market share (I think it's fair to call this intentional when they process the payment and don't bother changing the listed price), and you're willing to sell a whole lot of that product to someone, you can't cry foul when someone profits off that.
What you're describing isn't fraud, it's arbitrage: buying low, selling high. Just because Doordash are a bunch of idiots for selling stuff for way less than it's worth doesn't make it illegal for me to trade with them in good faith on their own terms and profit.
Nobody's lying to anybody, no price fixing is happening, or anything. Doordash agreed to sell a product at a price to any of their users, and they are fulfilling the promise they made, end of story.
Doordash is buying it, but I think it makes more sense as "a pizza for Bob" than just "a pizza". I think it would be strange to ignore everything Bob says if he calls in asking for the pepperoni to be on one side.
Though none of this matters if there's a 'special instructions' box. Have a code word for bread pizza.
> While the restaurant preparing "partial" pizzas to ship to coordinated orders is obviously fraud
Does Doordash allow customer menu modification requests? "No cheese, no tomato sauce, no onion" etc. That would also then fall under shit code and auditing :)
It doesn't seem like fraud when they are still delivering an actual pizza; that's basically just leveraging a sale. It becomes more dubious when they aren't delivering the finished good.
