The dark side of some industry disruptors

Sponsored ad on Facebook

Feb 25 2019 – Kevin Yaworski – Concerned Citizen

I had noticed several of my friends had liked SkipTheDishes on Facebook and now I am seeing their sponsored ads. I don’t want to judge them.

I just wonder if they know Skip is now using it’s success to put pressure on restaurants to give their drivers priority over customers walking in. This happens via a time limit for orders to be ready. If they decline they dont get the extra business. Yes they do get advance warning of the order but when staff are busy walk in customers often waiting longer as a result and some decide not to return in the future from the bad experience. This and related leading to less brick and mortar businesses.

I have been told:

“A business that charges 15-25% commission to an industry with a 5% profit margin can only live on borrowered time so long, before it cannibalizes it’s clients.

Stella’s quitting is the tip of the mathematical iceberg.”

I agree does not appear to be a viable model long term. It probably didnt matter to the owners as they sold it to a UK corporation for a $200M in 2016. Even splitting 5 ways and paying back initial private investors they probably doing well regardless. More details here.

CBC reported at the time the company was founded in Saskatoon in 2013 by Joshua, Daniel and Chris Simair, Jeff Adamson and Andrew Chau with HQ in Winnipeg

Analyst in 2016 were predicting the food delivery industry in Canada was worth $2.5 Billion. The UK company Just Eat also bought a rival in the UK at the time for $278M. Can’t see how it is sustainable other than the many that are too lazy or busy to cook or shop, dont care if it delivered very late but they already paid so cant do much then forget or ignore and order from them again in the future etc…

Is having fast and processed food delivered to customers doors good for them and society? Some schools are now having to implement policies after hundreds of orders per month. Recent studies have found even cooking fast food at home was better overall than regularly eating from fast food restaurants. The act of cooking at home more often has added benefits and often leads to cooking healthier foods.

Industry disrupters are initially admired by many unaffected but there is usually some dark sides that appear as more market share and profits are seeked with disregard for any consequences.

For Uber it was under paying drivers and or not paying any benefits where many traditional taxis required to, not doing adequate driver security and proper insurance checks, cutting corners on information security, not informing regulators or customers after large scale data breaches, paying hackers at least $57 Million in ransom which only encourages this behavior, spying on all customers to identify which ones where regulators and other wrong doing and crimes.

Similar dark sides to Amazon, Apple, Facebook, Google, Air BnB and the other now digital giants. They all have gotten so large they begin to influence regulators, politicians and other public officials often against public interests. They often spend enormous amounts of money on research on how to manipulate the public and customers.

As customers we can take steps to get informed on where we are spending our hard earned money. We can minimize the effects from false and misleading information and propaganda, privacy violations, data mining and other tactics and wrong doing used to manipulate us. The young, inexperienced and uninformed are often the ones most agressively targeted.

Our regulators and public officials need to be informed, reminded and asked to take adequate actions to protect against these serious issues and risks. Some are calling for breaking up these giants into smaller less influential corporations or worse case nationalizing them, enforcing current protections and creating new ones where needed. With a balance of protection and economic growth.

About Kevin Yaworski

I use my blog to write about things that I think are a matter of public interest or that I think others will be interested in
This entry was posted in Computers and Internet, Financial, Health and wellness, justice, News and politics, Privacy, security and tagged , , , , , , , , , , , , , , , , . Bookmark the permalink.

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