This week’s episode is about two things: One is us moving forward now that there’s light at the end of the tunnel. What’s it going to be like? And the other thing is, I’ve taken time off from driving lately and part of it was to devote more time on building some things for this website.
There’s light at the end of the tunnel.
What a crazy time it’s been with all of this social distance, sheltering in place, stay at home orders, masks and gloves and all of that. Sports have been wiped out, businesses shut down. Many of us continue to deliver, that’s been one good thing that delivery has stayed open for the most part. For some that’s a boon, others it’s a bust. Some of us decided to sit this one out. But everything is different, you know? There’s a different feel to everything.
But there seems to be a light at the end of the tunnel. Which is awesome as long as that light isn’t an oncoming train, right? Here in Colorado the governor just announced that stay at home orders will be lifted the end of this week. Now it’s going to be a gradual thing, it’s not a snap your fingers and everything is the same as it was. But we’re going forward.
What’s that going to be like?
What happens when things get back to normal?
I’m not sure that’s the right question to ask, just because I’m not sure if there will ever BE normal, you know? I don’t think we’re going to see restaurants able to offer dine in service for awhile. Will the restaurants that are taking extreme measures – shutting off access to bathrooms, keeping drivers outside – how long will that continue? I’m going to say a lot of places got more efficient – I kind of like how this has forced them into thinking through getting the food to drivers without clogging up the dining room – will those improvements continue?
And what about you? Will you keep delivering? Have you stopped delivering? When will you get back at it?
I did go back out some this last week. We had some snow – looks like probably our last snow until this upcoming fall here in Denver. And things have stayed kind of busy out there especially with some platforms. So I was out for 20 hours – funny thing is I made as much in those 20 hours as some weeks that I’ve been out 35 to 40 hours, it was just that busy.
Is it going to stay that busy?
What happens when people start going to work? The one downside to delivery has been that for some areas, business has gotten worse. There are so many new drivers who took up delivery once this thing started that the supply of drivers became greater than the demand. That was a factor when I stopped driving. Will the market remain saturated?
I’m curious to see what happens to this saturation now that states finally have their poop in a group on this gig worker unemployment thing. Several states have finally opened it up this week. If a lot of drivers are able to take that unemployment, how many will choose to start staying home?
Another question is – what happens with the restaurants and people delivering. Did enough new people get introduced to delivery, and we’ll be able to ride that wave for awhile? Or are people getting kind of tired of it? Now that the weather is getting nice and people start feeling safe to get out there, is business going to drop way off?
And, are Doordash, Grubhub, Postmates and Uber Eats going to survive?
This has been an unprecedented opportunity for all of these companies. But how well did they take advantage of it? Or did they shoot themselves in the foot?
I’m going to tell you that one company that I think could suffer in the long term is Doordash. They’ve had so many issues in meeting this surge of new business that I really wonder what the long term repercussions are going to be. Now they’ve already been famous for their app crashes, but they seem to have taken the issues to a new level this past week. But the big problem is their lack of support. Doordash was probably the worst of the bunch at being prepared for this from a support standpoint. They were so reliant on their overseas call center, that when the Phillipines put in these severe stay at home restrictions, it pretty much crippled them. Doordash never invested in the tech to allow them to pivot during this time, and it played out in customers and dashers being unable to get through to support when needed.
Another issue is, what does this do to their long term reputation with the restaurants.
Many restaurants were extremely thankful to have these platforms available. At the same time there has been some irreparable harm to the relationships as well.
One thing that’s come to the forefront for a lot of these companies is the high commissions that they charge. The thing is, restaurants can barely break even when they pay out as much as they do on deliveries. Delivery is NOT a profit center for most of these places. And now that a significant portion of their income comes from delivery, they’re feeling the pinch. A lot of restaurant owners are revolting right now. Generally the restaurant is only making 20-30% on their orders – which is pretty much what these delivery companies are charging in commission. In other words, if they sell it for $30, their cost is around $21. And the company is charging $9 in commission, so often at best the restaurant is breaking even.
Grubhub goes out and makes a big deal about how they’re helping restaurants, but the help was really seen by many as predatory. They made it look like they were waiving commissions – they were deferring – restaurants have to pay them still but they can just wait a couple months now. They pressured restaurants into taking $10 off on $30 plus orders – and even sent money to restaurants to cover that. Yet, they only sent enough to cover 25 such orders – if there were more takers it came out of the restaurant’s pocket. And oh by the way – they wanted the restaurant to charge $10 less, but charged commission on the full price.
It’s this kind of hting that is making money for the delivery companies in the short term, but what’s the long term damage?
And then there’s the whole independent contractor thing.
California has passed a law and it was aimed at gig companies in particular, all trying to force these companies to hire employees instead of contractors. Nothing has really changed on that yet because California hasn’t really tried enforcement. This whole pandemic has been a bit of a distraction on that front.
But once the dust starts settling, I think you’re going to see some states doubling down on this whole self employment thing. One thing that’s really come to the forefront in this whole situation is the lack of a safety net for gig workers. Now that the PUA has included gig workers for unemployment on a one time basis, you can bet that states are going to be looking into getting unemployment money from gig companies.
New Jersey already sent a fine to Uber before all this happened. New York’s high court ruled that a Postmates employee was an employee. That one has gone completely under the radar because of this whole mess – I maintain that this is a bigger deal than AB5 in California because it’s a final court decision. Any other decisions that have been made have been appealable, and companies usually end up settling out of court before it gets to a final thing. But there’s no settling now. There’s no appeal. And this thing is going to apply to all the delivery companies, probably the rideshare companies as well.
Once these states have time to focus outside the pandemic, you can bet they’re going after this. And what is this going to do with what we are doing?
What does all of this mean to us?
I don’t know.
You’ll notice, most of what I’m saying is questions. What is this going to mean? Where is this going to lead? How will we recover?
I don’t talk about all this to try to provide answers to those questions. It’s more to get you to think about the questions. Pay attention to what’s happening out there. Ask the questions yourself and watch how it’s playing out.
I’ll tell you that I’m no profit. I definitely learned that early on. In early March when they announced the cancellation of the entire college baseball season AND the College World Series, which happens in June, I was thinking that’s insane. We’re going to be out of this by then, right? And here we are in April and they’re wondering whether we’ll see a football season this year. So… I’m not going to try to say that we’ll see all the answers.
Here’s what I will say: I really hope you’ve used this time to start thinking through where you can go from here, and what you can do with all this. I hope that it’s been a good opportunity to start crafting your exit plan, or maybe it’s your entrance plan into something far greater.
I really encourage you to go back to Episode 7. In that episode, we talked about that last part of creating a business plan being having an exit strategy. Where do you go from here? Start planning for what you want to do next. Things may continue as they are for a long time, and things may be changing. That’s the thing about business, it’s always changing.
How good are you at pivoting?
Up Next – Moving forward for EntreCourier
The thing about all this time staying at home is, it give you a lot of time to think. And I’ve been thinking a lot about, what do I do myself? What about this website? What about the podcast? I thought about going there in this article, but it’s just different enough that I’ll just do a part two to this, and talk about that more.
What is going forward going to be for you?
I asked a lot of questions about what might happen going forward.
What do you think will happen? Do you think delivery will continue to be a boom, or is it going to fizzle? What happens when states start forcing companies to hire employees instead of contractors?
And what’s next for you? What would you absolutely love to do if you could do it? Let me know your thoughts.