In-N-Out Files Lawsuit Against Food Delivery Startup DoorDash
techcrunch.comFWIW, Eater published an article 5 days ago that discussed examples of New York eateries who are either OK or annoyed with being listed without permission
http://ny.eater.com/2015/11/6/9678206/door-dash-delivery-nyc
> But not all restaurants on DoorDash know that they're listed. Tommy Ferrick, owner of Delilah's Steaks in Greenpoint, says he rejected an offer from a DoorDash salesperson months ago due to a 20 to 25 percent commission fee. More than 50 percent of his cheesesteak business is from delivery, and he's already paying GrubHub a commission that ends up being three times higher than his rent every month. He's currently trying to get more people to just order directly through the restaurant. But a few weeks ago, his business started getting pick-up orders from DoorDash. He looked on the site and was shocked to see the Delilah's Steaks logo and full menu listed as an available restaurant, with significant price markups. A cheesesteak costs $11 in the shop, for example, but DoorDash charged $16.95 for it. "I was livid," says Ferrick, who worries about quality control for deliveries he doesn't know about.
Doughnut Plant seems meh about it:
> Still, DoorDash lists three of four Doughnut Plants shops on the site without the company's permission — but PostMates, Doughnut Plant's preferred delivery merchant, did reach out before posting the menu, according to the bakery's creative director Jeff Magness. The Doughnut Plant logo DoorDash posts is also incomplete, Magness adds. "I don't like [that] it makes it look like we are working with them," he writes in an email. "That said, we haven't received complaints from customers."
They should just use their containers to advertise the app and offer a small discount (10% or so) and then Doordash/Grubhub becomes a marketing channel for their app. Thats what I'd do.
That's brilliant.
>A cheesesteak costs $11 in the shop, for example, but DoorDash charged $16.95 for it.
From a customer perspective, this practice feels very disingenuous. The 5.95 should be labeled as part of a delivery fee.
If somehow DoorDash was the first link a user visited after searching for "donut plant", they would need information to decide whether to visit the restaurant or to order online.
The transparent thing to do is to list the 5.95 markup as DoorDash-imposed. That way the user can easily see their choice
Intuitively, that makes sense, but isn't it also pretty well-accepted for a retailer, reseller, or other "middleman" not to disclose their costs?
If you go to Walmart, you don't expect the price labels to say "$0.50 Kellogg bulk unit cost, $0.80 retail storage fee"; you just expect "$1.30", and the store's costs are their own concern.
It would certainly be a nice thing to do, but we generally don't expect retailers to facilitate you buying from their supplier.
On the other hand, retailers also probably have explicit permission from vendors to resell the good, which DoorDash doesn't.
> On the other hand, retailers also probably have explicit permission from vendors to resell the good, which DoorDash doesn't.
That's the biggest reason I see. In your case, Kellogg is "allowing" Walmart to resell its products.
This is a good point but also an unfair comparison. Walmart consumers do not have the option of walking to the factory instead of walmart. Doordash consumers can walk to the restaurant instead of ordering from doordash.
I think the analogy holds in this respect: in both cases, you can get it from the supplier, it's just less convenient, either because of having to go there, or needing to be shipped a longer distance, or needing to buy a bulk.
(Per sibling, a more relevant difference would be Walmart's having permission, but I'm not sure that's relevant to the consumer expectation; "telling you how cheap this stuff is from the source" is the kind of "facilitating you getting it cheaper" that we don't expect retailers to do.)
> From a customer perspective, this practice feels very disingenuous. The 5.95 should be labeled as part of a delivery fee.
Yes it is. While possible markups are mentioned somewhere their site, we didn't know about it until months after we had been regularly ordering from doordash.
Since then we only order if absolutely necessary, and prefer to pick up ourselves or use the restaurant delivery itself.
I am not a fan of DoorDash's business techniques. DoorDash sent a flyer to my house false advertising a coupon code. I spent half an hour creating an order only to realize that the coupon they sent me was different from what the flyer said. When I called to complain they acknowledged their error but said they wouldn't do anything and that I should just place an order anyways.
> Fast food restaurant In-N-Out, known for its delicious burgers and secret sauce, is suing food delivery startup DoorDash, TMZ reported earlier today. In-N-Out, which filed the lawsuit on Nov. 6, 2015, claims trademark infringement and unfair competition. Basically, In-N-Out wants DoorDash to stop delivering their delicious food because of concerns around quality, food handling and safety.
Why using so many times the word delicious? Moreover, that's not really the scope of the article.
Same goes for the DoorDash spokesperson's statement. That blurb had an entropy so close to zero they just could have left it out.
Is this just lazy reporting or is it an effect of the leaking of corporate speech into everyday language? Asked differently: Have we become so used to the marketing jargon that even reporters start picking it up in their articles?
Reporters certainly pick up "sharing economy" jargon, not aware they have been thoroughly co-opted by marketers.
not aware
I wouldn't be so sure.
This does not seem outrageous to me on either side. DoorDash wants to satisfy demand and grow their business; In-n-Out wants to protect its brand.
The details will determine who is right -- hence the lawsuit.
Services like this have taken off in Sydney (HungryAndLazy, Menulog, etc)
It's made getting delivery food here SO much better, as it's many smaller family owned stores that now get massive business if they have better food
The difference is that restaurants sign up to offer their existing delivery services to customers through H&L and Menulog, who are merely the conduit through which orders are placed. It's still the restaurant making the deliveries, and they can choose to pull out at any time.
It's crazy how popular they've become; just about everybody I know uses Menulog and Eat Now to order food, and if your restaurant isn't on it, we'll probably never know about you.
Menulog et. al are just discovery and payment gateways for those restaurants, so that they can offer an online service where they wouldn't be able to on their own. The establishments still handle all delivery themselves.
Trademark stuff, ok, it makes sense they can't use their logos and such. But the whole quality control, food handling, meh. Soon as it's paid for and in the customer's hands, it's the customer's business what happens to it next, not In-N-Outs, it's not theirs anymore.
If you get a bad experience because DoorDash took too long or dropped the box and didn't tell you I suspect some/many/most? people might blame the restaurant, not DoorDash. So in that sense I can see why In-N-Out would care since from their POV DoorDash is appearing to represent them to customers.
I understand why In-N-Out might be upset, but I don't understand how they could possibly have any legal standing.
Trademark infringement and dilution. By pretending to be In N Out they confuse customers into thinking they are buying from In N Out directly.
There is a first sale doctrine in Trademark, but it might not (probably?) won't apply here. First, courts have found that not all reselling falls under first sale if the products aren't exactly the same. Here, by delivering they are serving different food because it gets cold and soggy. They could also argue that In N Out doesn't provide delivery service and this place is selling that service using In N Outs trademark.
The damage to In N Out is brand devaluation. People might think that In N Out sucks.
A clear example is: You can resell macbooks. You can buy them, sell them, even repair them.
But you can't set up a fake Apple Store that looks like a regular one.
Doordash is argue they are doing the former, and In N out will say the latter.
Apple store is an interesting example. If you put up a giant flyer "Macbooks sold here!" but stripped them for parts, replacing the RAM and SSD with slower, cheaper versions, you might expect angry letters from Apple too.
Ironically,you couldnt really,since they already are the cheap stuff
There's probably something illegal about using their logo and displaying a modified menu with marked up prices.
That's the trademark side of the case, and yes, In N Out could probably successfully argue that usage of their logo implies endorsement and/or is likely to create consumer confusion and that it's therefore a trademark violation. That's pretty easy for DoorDash to put to rest; just stop putting In N Out's logo on the site. A few good, highly-visible disclaimers would probably put any remainder of a trademark claim to rest.
A modified menu would be tougher. You can argue that there may be copyright infringement, and that may be valid to a limited extent, but DoorDash could put up a version of the menu that wasn't copyrighted, as its heart, menus are factual arrangements, and facts are not original creative works subject to copyright (though a specific arrangement of those facts may be). In N Out could also claim that there's trademark infringement if DoorDash is using trademarked food names, but I think it'd be a harder argument to win, since DoorDash can argue it's a nominative use.
IANAL.
I can understand the factual part, but only if they didn't alter the prices. They'd have to at least mark it clearly that they're charging on top of the prices some amount.
they probably would need to strip the fluff from the menu. ie. the hot juicy blah burger with .... is just burger, ketchup, mayo, lettuce.
They don't need legal standing. They're a big company, and big companies sue people they don't like into bankruptcy. The basis of the claim only needs to look vaguely possibly meritorious for the lawsuit to be forced through the uber-expensive court circuit.
Only way to avoid being sued into bankruptcy after you've pissed off someone big enough is for your company to be doing dozens of millions each year at minimum, and thus, have the resources to tolerate the associated legal fees. If you make someone mad before this happens, expect to be forced to shut down.
In-N-Out are more vulnerable to delivery delays because they serve real french fries rather than the reconstituted chemistry experiments that most fast food places have. They are delicious when they come out the window, but must be eaten immediately to avoid calamity. So even if DoorDash were doing everything right, customers would not be happy with the french fries.
"people might blame the restaurant, not DoorDash"
Hence why they should not be allowed to use In-n-Out's logo or otherwise imply there's some sort of partnership.
In-N-Out burgers aren't owned but rather licensed. Contingent on not being door-dash. Read the EULA.
Is that what that text is at the bottom of my fries?
Yep, John 3:16 IIRC.
Are people down voting this because John 3:16 goes on beverages, not fries (Proverbs 24:16 is the one they put on fries) [1]?
[1] https://en.wikipedia.org/wiki/In-N-Out_Burger#Bible_verses
Woah! I had no idea they did that (I live in Australia).
I read the linked Wikipedia page, but I still can't work out what the point is. Is that some form of subliminal missionary tactic? Sure the Snyder family were Christian, but why print bible citations on take-away wrappers? What's the context? What's the so-called "take-away"?
I eat there frequently, and I can't work out what the point is either. There is no other manifest connection between Christianity and the establishment.
Note that many of the verses cited are the more vanilla Christian selections. Probably the most objectionable one (especially to non-Christian believers) is John 4:16 ("no man cometh unto the Father, but by Me"), but that one is not printed on anything a customer would see.
It could just be my experience, but I have very rarely seen a non-white person working at an In-N-Out.
I was surprised to find Ezekiel 23:20
"Would you like that animal style?"
But it doesn't reach the customers hands until it is delivered. How long does it take to be delivered? never used Door Dash. Does Door Dash care about quality? probably not as long as it is delivered. We know startups will try to grow quick, which in turn can make their services suffer. customers might blame In-N-Out instead of Door Dash (there are crazy people around).
In-N-Out is meant to be consumed on-premises. It doesn't travel well. Twenty minutes after it comes off the griddle, it's not really all that great.
Since DoorDash is handing the food over to the customer, after a delay that will likely exceed 20 minutes, I can see In-N-Out's point here.
Not necessarily.. if people start to get sick, who has the liability. Jack in the Box had bad food practices and it killed a bunch of people. Same idea here.
That is kind of early-90s Seattle (4 kids died, was working for McDonalds at the time), has Jack in the Box killed a bunch more people more recently that you are referring to?
No but this is why In&Out wants to control/restrict delivery, to prevent people getting sick and suing them. Delivery guy could have Shigella or something, handles your food (eats a fry say) and you get sick. You blame In&Out. In fact he delivers 100 In&Outs all ordered from same place. Delivery guy is the vector but In&Out gets the blame.
Would anyone be surprised if it had? I've been to some reasonably comfortable JackintheBoxes, but most of them aren't any better than e.g. Del Taco.
If it had, it would totally have been in the news. That I knew what parent was talking about exactly goes to show that they don't happen that often. I'm not really a fan of Jack in the Box, but 1993 is when I graduated HS, for crying out loud.
> if people start to get sick, who has the liability
The sick people, clearly. Just like the dead people who went to Jack in the Box. Exactly what kind of restitution are you proposing here? A pimped out grave?
That's not how it works according to the law and health codes.
Dead people leave dependants.
For a second I thought In-N-Out had hacked the Streisand effect perfectly, but alas DoorDash has indeed removed them from the app.
When someone represents themselves as an agent of another merchant but don't have a relationship with that merchant you're literally just buying something from the back of a van.
In-n-out gets exposed to liabilities and bad pr. No brainer.
Funny enough by suing DoorDash actually gets bad PR which to them is still good PR. A lot more people will know about DoorDash than before. Pretty naughty to agree to stop then renege on it, then disregard all attempts there after. Almost as if it was deliberate...
But getting a $5 burger in your mouth in 45 minutes with a $3 delivery fee is the boring part. The larger context of all this is how companies use terminology these days.
Per DoorDash marketing:
Through the DoorDash marketplace, people can purchase goods from local merchants and have them delivered in less than 45 minutes - thanks to our revolutionary logistics technology.
Per DoorDash TOS:
THE COMPANY DOES NOT PROVIDE LOGISTICS OR COURIER SERVICES, AND THE COMPANY IS NOT A LOGISTICS CARRIER. IT IS UP TO THE THIRD PARTY COURIER OR LOGISTICS PROVIDER, COURIER OR VEHICLE OPERATOR TO OFFER COURIER SERVICES WHICH MAY BE SCHEDULED THROUGH USE OF THE SOFTWARE OR SERVICE. THE COMPANY OFFERS INFORMATION AND A METHOD TO OBTAIN SUCH THIRD PARTY COURIER SERVICES, BUT DOES NOT AND DOES NOT INTEND TO PROVIDE COURIER SERVICES OR ACT IN ANY WAY AS A COURIER, AND HAS NO RESPONSIBILITY OR LIABILITY FOR ANY COURIER OTHER THAN STATED HEREIN SERVICES PROVIDED TO YOU BY SUCH THIRD PARTIES.
Per Postmates marketing:
Postmates' revolutionary urban logistics & on-demand delivery platform connects customers with local couriers, who purchase and deliver goods from any restaurant or store in a city.
Per Postmates TOS:
THE COMPANY DOES NOT PROVIDE LOGISTICS OR COURIER SERVICES, AND THE COMPANY IS NOT A LOGISTICS CARRIER. IT IS UP TO THE THIRD PARTY COURIER OR LOGISTICS PROVIDER, COURIER OR VEHICLE OPERATOR (COLLECTIVELY, THE “POSTMATE”) TO OFFER COURIER SERVICES WHICH MAY BE SCHEDULED THROUGH USE OF THE SOFTWARE OR SERVICE. THE COMPANY OFFERS INFORMATION AND A METHOD TO OBTAIN SUCH THIRD PARTY COURIER SERVICES, BUT DOES NOT AND DOES NOT INTEND TO PROVIDE COURIER SERVICES OR ACT IN ANY WAY AS A COURIER, AND HAS NO RESPONSIBILITY OR LIABILITY FOR ANY COURIER.
And of course the grand daddy of them all:
By seamlessly connecting riders to drivers through our apps, we make cities more accessible, opening up more possibilities for riders and more business for drivers.
And per Uber TOS:
The Services constitute a technology platform that enables users of Uber's mobile applications or websites provided as part of the Services (each, an "Application") to arrange and schedule transportation and/or logistics services with third party providers of such services, including independent third party transportation providers and third party logistics providers under agreement with Uber or certain of Uber's affiliates ("Third Party Providers"). YOU ACKNOWLEDGE THAT UBER DOES NOT PROVIDE TRANSPORTATION OR LOGISTICS SERVICES OR FUNCTION AS A TRANSPORTATION CARRIER.
A lot of aerobatics to contort and redefine words so that one gets the branding benefit of the word's previous meaning but suffer none of word's consequences.
Is this a better or worse turn than the naughtiness of YouTube hypergrowth days shielded by DMCA safe harbor? Or how Facebook drags their feet dealing with users that steal content because it allows them to juice up their view counts?
The Postmates and Uber marketing materials look like they were written with lawyers involved. They make the companies sound like third party middlemen. The DoorDash one is less slick. "People can purchase goods from local merchants" sounds like the merchants are on board, which In-n-Out clearly is not.
The local merchants are on board in that to get listed DoorDash wants a 20% cut from the merchants as lead gen services. Obviously they didn't get that from big brands but offer it as a means of bolstering up DoorDash's platform value.
I'm curious as to how does one do the dance of saying you coordinate logistics but are not a logistics service provider when the people showing up are wearing your logo, paid by you, and use your app for order information, confirmation, and directions.
With Uber, technically it's rasier that provides t&l services, Uber is just a software company and rasier is the sketch shell company to take the fall if tshtf
This is the same shell game being played by the MMJ guys in SF right now. They open up dispensaries to get supply then a technology company to aggregate demand.
You know what I wish would happen? Everyone would just get along - the burger guys, the tech guys. Just deliver the things with drones already guys, mmkay? I need that. I live in Europe. I haven't had a proper burger in decades.
Dead unicorn list
1. Homejoy
2. Theranos
3. Doordash
4. DraftKings/FanDuel
5. Fab
6. Evernote
7. ...
"...concerns around quality, food handling and safety."
I completely understand. I used DoorDash exactly once to order from a local Chinese restaurant. The food was delivered by a dude who looked disinterested, and the containers were crushed and leaking lots of brown sauce into the plastic bag. It wasn't a great experience. Whose fault was it? I dunno. But I haven't ordered from DoorDash or that Chinese restaurant since.
They may have a point with the lawsuit then. It is a matter of maintaining control over quality perception of their brand.
Remember the case of Cristal (champagne) vs. the rappers from 2006? Similar idea - http://www.economist.com/node/6905921
Good. This latest generation of "doing shit for lazy people" startups really needs a good wake-up call.
I don't know how DoorDash could make In-N-Out food worse. Seriously their food is not good. I see the trademark angle but the quality? Please they should start with making something worth while.
I'm going to go down the off-topic path with you as I would agree with you. On my last trip out to SF I tried them and I was really underwhelmed. As far as fast food burgers and fries went I enjoyed Carl's Jr. far more.
The fries at In-N-Out is an interesting paradox. Without sauce they taste almost like nothing; the blandest fast food fries I've ever eaten. With sauce? It's okay. A bit too soggy for my liking but okay.
INO competes at the $2-$3 burger level, and they are excellent for the price, assuming you like their sauce (which can be skipped). You can't fairly compare them with CJ's $6 burgers, or the $10 restaurant equivalent.
Their fries are made fresh on site, but they do tend to need salt.
> You can't fairly compare them with CJ's $6 burgers, or the $10 restaurant equivalent.
That's fine; I mostly meant out of the fast food places you're supposed to go to in CA I preferred them. As far as INO's fries are concerned I have yet to find a fast food fry that I thought was worse than INO's :)
The choices for a fast food burger joint that is everywhere: Mcdonalds, Burger King, Jack in the Box, Carls Jr, or In-N-Out. I choose In-N-Out.
In-N-Out is NOT everywhere. Much to my chagrin. I've only been able to eat there three times during visits to San Francisco. I'm from the Chicago area.
I believe you may have a minority opinion.
Those fries...
I assume others are going to downvote you to oblivion so I'll upvote you :)
I've used DoorDash before but not for In-N-Out...I wonder how many Stanfordians have done so, given that DoorDash is a product of Stanford graduates and of the incredibly annoying fact that In-N-Out is in the 2 nearby localities (Redwood City and Mountain View), but not Palo Alto or Menlo Park...Anyone who has been around the area know why In-N-Out hasn't managed to get a place near Stanford? This is the first California city I've lived in without its own In-N-Out. I would definitely use DoorDash for In-N-Out delivery.
Weren't trolls like you supposed to not be on this site?
Yea I lost my focus there. Seriously In and Out is terrible and it just gets me every time that I see this SF chain pushed as good when it really is not.
On the topic I think the quality of food delivered is going to hurt the delivery businesses. Fries are the perfect example where you cannot stick them in a bag and delivery them 30 minutes later and have anything but a soggy mess.
I agree with others that these businesses are not going to scale but may survive in very small places where higher end food can be delivered and the fee is a smaller percentage of the total food bill. Delivering cheap fast food isn't a good business model.