I’ve seen reports of restaurants being offered six figures to switch from OpenTable to Seven Rooms or Resy or vice-versa or whatever.
What’s the business model for this? Where’s this pot of money coming from?
Doesn’t explain the economics, though it gives some idea of the scale.
just guessing, but i think it’s probably a way to diversify and looking forward to establish a competitive moat compared to competitors namely Uber Eats / Postmates. Uber has been expanding services to things like doing errands (like picking up a user’s laundry) and purchase deliveries as well (like from the Apple Store). i think that Doordash has a good amount of cash on hand, and their CEO also has ties to Square, which purchased Caviar. i wouldn’t be surprised if in the near future, the Doordash / Square integration makes it very easy for restaurant reservations and they’ll streamline the bill paying process. with their big offers now, they can entice restaurants since a lot of restaurants are hurting financially. build a real big base of restaurant clients via big payouts now, maybe then create some exclusivity for delivery via Doordash and thereby squeeze out UberEats, and integrate a deal with Square. i think that strategically they’d want to become a whole Doordash ecosystem from reservations to delivery to payments all in one app. reservations just being a feature, making things like Resy seem small.
also, with self-driving car technology ramping up, it’s not hard to imagine food delivery being done by Waymo-esque kind of cars. fewer people handling food, more streamlined processes, etc. so maybe they’ll phase out some of their Dashers and thus that revenue stream. trying to get ahead of that eventuality.
plus, Doordash sells user data to advertisers. dining reservations might add some user information that food delivery doesn’t. who you’re with, what you’re celebrating, what kinds of restaurants one frequents and spends on, what are special occasions, etc. allowing them to build a bigger profile on its users.
with that said, I think they should improve SevenRooms because it’s kind of clunky.
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Stock Market. Subscribers equals growth. I.e. cell phones for free.
Beethoven Market moved to Doordash.
So long story short maybe they lose money on reservations in hopes of making it up later some other way.
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basically yeah, diversifying services to establish a competitive moat to beat Uber, imo.