Business is battle on business wars. We learn what it eggs to win by looking closely at ambitious battles to one or our latest serious food delivery wars and our new book Order of business. Wars gets to the very heart of each conflict, unearthing all valuable lessons, go to wonder. Dot com, slash the art of business wars to order your copy now join one plus to listen to business wars. One week early and ad free in the wonder, YAP download the wonder YAP in your apple or Google play Mobile Appstore. Today December, twenty fourteen cargo Maloney is sitting in the grub hub office remit. Winter. Wind is howling outside snow already covers the ground here his fingers through his brown hair and size. It's been a busy year

his first as ceo of a publicly traded company Loney looks up his co founder bike, and is at the door they MIKE what's up Evans hold up phone. Did you see this Amazon NEWS, was gone. I Devon starts reading from an article this past week, Amazon quietly launched online, take out and delivery by Amazon Local, this, service only appears to be alive and Amazon's hometown of Seattle for now, but You can be certain that the company has much larger ambitions: Evans slumps down into a chair in front of Bologna desk MILAN He looks at him Amazon already has the infrastructure. If people using damned order, food, we're screwed yeah. Not just them. Goobers expire its meal delivery programme postman. Just announced they completed a million deliveries,

we're dashes, raising more money and growing like crazy you're. Still, some compared to us, but their gaining ground any person his lips Evans is right. There company grub hub does have a decade of experience and arguably the best website and most popular food ordering at, but it weak spot. They still do Do their own deliveries. There the middle man between restaurants and customers and their competitor goober is forging the bridge between them goobers, huge fleet of independent drivers gives a major advantage and then there's postmarked that companies prime growth there. A shiny new toy and their mobile friendly platform is seductive to investors, Maloney shakes his head we gotta. Do something before they catch up to Us Evans, looks out the window, then back it Maloney. So what do we do?

We're gonna have to do delivery to, but we don't have I'm too bill a network of drivers from scratch. Surrogate. Have to buy em. What do you mean? I have to acquire the ability to deliver. Evan smiles and not This is a genius idea. They have cash on their boots. Thanks to their recent ip. Oh, they can afford to and what they need to grow. Loney calls his assistant pie. Can you put together released a regional delivery? Apps we can acquire Evans know that even there, the biggest contender there under threat from post mates door down. And who breach its deliver or die within a few months. Grub hub requires two new come These dining in and restaurants, on the run. Competitors knitting at their heels. They had

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in our last episode, Tony shoe started door dash in an effort to help small businesses like his moms chinese restaurant German worn, bastion layman launch postcards to deliver furniture before pivoting to food, founders map Maloney in my governs, decided local pizza, Should be as easy to find online as apartments and goobers Mr Callanan recognise that food delivery was the next logical step in his empire. Now we're picking up with all competitors looking to win the golden meal ticket getting too big to beat. This is episode three deliver or die. Spring twenty fifty a tiny italian restaurant in New York City, it's a busy night in the kitchen, but the front of ES drawn, is almost empty. That's because

restaurant owner recently signed up with door dash. company just launched in the city and its been taking off the since, if one of the empty tables quiet, doing his accounting for the month. I'm here to pick up a door dash order for Sarah, the rest, an odour hands over the bag and goes back to his numbers, but some museum. Adding up here. down his glasses and squint at the bottom line. That can't be right. And then he realizes The door dash commission eating into his prophet door down is charging a twenty to twenty five percent commission fee on Every single order. He struck to look closer door. Ash gobbled. Six dollars of a thirty two dollar food bill. Panic is slowly rising, as he examines the other delivery orders. There's one from grub up for that web.

The restaurant owner has a choice and the percentage me anywhere from twelve point five percent to twenty percent the more he pays, though. The higher up his restaurant appears in search results. Right now, he's getting a flood of orders, but paying a seventeen point, five percent commission and he. I can't afford it onto the next page. Postman their charging, similar fees. His staff is complaining about the lack of tips will dine and they leave a tip the get split between the servers and cooked, but with delivery, theirs tip for the IN house staff and no one orders drinks, crucial moneymaker at an industry known for its slim margins. Thanks to the spoon delivery. Apps. This italian restaurant is clocking more borders than ever, but with the owner realizing,

the delivery services have been killing his small business and the drivers are unhappy either Jew, twenty fifty a room in San Francisco, civic centre, on one side of the room, a crowd of goober executives and their lawyers are gathered a very important hearing. on the other side is an over driver will forward. She's suing the ride sharing out for refusing to cover mileage in tools Goober meanwhile, argues that, because she's, an independent contractor, not an employee, those costs Saw her responsibility, Caliph His labour commissioner cleared his throat all right. Made by decision. This drivers should be classified as an employee of the company. Over is involved in every aspect of the operation from vat

drivers and their vehicles, setting age for trip fares and is therefore legally an employer of its drivers hereby order over to pay her forty one hundred dollars to cover the costs of vehicle mileage in tools for the three month. She was driving for ever super executives are aghast. His bad. Very bad where's, profit model relies on not having to pay its drivers, health insurance or job related expenses, Goober argues. It's not employer, adjusted Abt matches passengers with right the company. Is facing several lawsuit. Sober similar, employ issues across California This ruling sets a precedent if they are legally required to pay drivers and cover their costs. Not only will that hurt the bottom line, but it could effect, their valuation.

The overruling also has major implications for grub hub, post mates and door dash. If they can't climb If I, their drivers is contractors either there trouble to especially door dash The other companies have recently benefited from the flood of venture capital in the past year and a half which boosted their stock price but door down. is in the middle of raising money to fund its expansion This ruling could make the tent investors very nervous, dash figures. The best bet is to get out in front of this by closing a funding round as soon as possible fall Fifty Palo, Alto, California, tony shoe walks into a conference room at a venture capital for across the able or to investors dry. in the Silicon Valley, uniform of dark genes and puffer best after some pleasantries shoe makes his pitch.

Georgia started off twenty fifteen with just for markets and over the past, well months: we that it another eighteen markets they include. Two in Canada for total, Twenty two markets covering more than two hundred fifty cities. The investors not along now we are seeking to raise one hundred million dollars at one billion dollar evaluation. One of the investors raises his eyebrows. But what about these lawsuits and want to classify your contractors as employees? Raise your labour costs. Shoe looks at his note, Work and convinced will be able to win these legal battles. Continue using our existing business model. The Investors, however, are not convinced I'm sorry Tony! I love you guys, but I just don't think we can buy in this price them. It is so saturated. Between you pose major overrides we're not

and back anymore, food delivery. Businesses shoe is ready to give up the ad. But we are just a few delivery business in the past Here we teamed up with seven eleven, so people can add grocery store items to their door. Dash orders were alleged, sticks company yes, and so are all breeds posts. Mates in Amazon, shoes, baseball's, but when we talked in the fall. You were interested. I know. but the market has changed. Louis, what money? And but not at a billion dollar valuation, in closer to six hundred million valuation. Like your last round shoe, gathers his note the invest you're, still willing to give them money but he feels like their undervaluing his company. They don't See the potential for growth and improvement. Well, thank you for your time.

They shake hands and chew walks out, but His calm exterior he shattered who calls, is co founder and see tee, o Andy Fang Annie, turned us down dammit. Why we're gonna? Do she thinks for us We need to show them that we're not like these other companies that can guarantee a profit bang weight patiently for shoe to lay out his plan. We need go back to our roots. All our competitors, focused on cutting costs for the customers. We can Focus on the restaurant tour the small businesses we wanted to help like my mom's, ok, So how are we going to do that rather than making a cheaper for the consumer increase sales for the restaurant working it a greater selection of restaurants, more than any of the others

and we're gonna get them loads of orders. You make it sound simple. It is. if we stick to our guns, we're gonna win, I promise you Fang isn't convinced, but he trusts shoe A greater selection of restaurants, could help attract more users and drive down cost if they can do that they can get investors back on board, but some of their tactics aren't exactly what you'd call above board lay twenty. Fifty Francisco Door Dash headquarters. A meeting room is full of new dashes company jargon for delivery people they're, holding clipboards and signing papers. Solemn, are already clutching the big red insulated bag they'll, be using to transport food

the dashes settle into their seats on the screen and fry them. A training video starts playing. Or dash delightful delivery, introduction to door dash video walks through the basics. What door dash dies? how the door dash app works, then Yo talks about payment for drivers nor Dash be paying for gas or any other car costs. That's on the driver. Next, YO explains there are partner, restaurants, meaning rest store dash, has contracts with and non partner rested, These are establishments where door dash doesn't have an established relationship but dry can still pick up, orders and then The video lays out a protocol that raises some eyebrows. I use the word door dash in a non partner. Restaurant There's no need dimension door dash in these cases, because not all the staff know that we don't have a relationship with a restaurant.

some of the dashes take note others, not alone It seems innocent enough, but this instruction is pretty noteworthy: door dash has been coming under fire for listing restaurants on its website and out without permission, many of them strong, refused a door dash partnership because of the high fees its attack. De ignored as shares with coastlines, which has been doing the same thing. And has also been taking heat from restaurants, sometimes store, dashing, Post, Bates list items at a higher price than the restaurants own menu, so angry restaurateurs demand post mates in Dore dash, remove them from their service that out in and out even filed a lawsuit against or dash claiming that even after internet ass to be removed, Doored ashes still listing it on its ad Although services battle it out with restaurant owners grub hub,

sinews. It shopping spree it by restaurant delivery service called delivered dish making. Its delivery footprint even bigger and that's a problem. four door dash because it's already working overtime to attract customers and now its facing more competition than ever before, LOS Angeles March. First, twenty six it's a brisk sunny day on Fairfax Avenue driver in a black previous pools to the familiar red building with White Chris of letters that spell out the name of the Popular Delhi Chanters its lunchtime, in the line to order stretches to the door, but the driver skip the line and walks right up to the counter Ann Arbor eats order for Sarah Palin right up.

and behind the counter hands, the driver, a brown paper bag with a receipt staple on the outside, he gets back in his car, That gives him directions to Sarah's office down Beverly Boulevard toward one of the many office blocks in Beverly Hills, as he approaches. Goober eats alert. Sarah, she had downstairs to the front door. Sarah thanks. So, let's have a great day driver gets back in the car and looks at his burrito. Sarah paid four dollars. Ninety nine cent delivery fee, in addition to the cost of a sandwich, but then his eyes get the Tipp line. He frowned note, tip but she seemed so nice he's not happy the only its paid for the distance between taking up the food and delivering it to Sarah. For that he was if a few dollars flat payment plus a certain amount per mile counters,

and fair so well, either Buber takes a big by twenty five percent of the Delhi's town, even though it might be a raw deal for the drivers, goobers advertised makes it sound like a great opportunity for restaurants. there were delivering with over AIDS. Are business has grown so much and is just like found business the pudding? only if they do real, Numbers with just uber he'd surprising about a hundred delivers a day. I could ask for a board trustworthy partner. They got the logistics gave off long because we all use goobers to get everywhere in the world now, a year ago, were started slowly, with an option focused on selectivity, only offering a set menu from one restaurant at a time but see, Eu Travis calendar quickly realized that operates had huge potential and direct his team to build out a separate out now

as a stand alone at liberates is playing to win in twenty sixteen Food delivery is still a very small part of the overall restaurant economy, representing than ten percent of its sales as more and more platform. Chase customers delivery. Sales are on course, to explode, but Restaurant owners won't be toasting their fortunes far from it in a Twenty sixteen about a month the official launch of the new burrito clinical and just how far his new venture has to go to catch up made financial generally to the press. they show that the company is making massive inroads there right new grew six fold in twenty fifteen by now postman she's, fulfilling a million orders, a monk, then they roll out Smits unlimited. Instead of paying for individual deliveries, users pay

flat fee of nine dollars. Ninety nine cents, a mark for unlimited delivery and folks quickly sign on Post Bates and who were. Aids are rubbing their engines, but goober we'll leave them in the dust when it signs up America's favorite restaurant. wish you were in early on some of the best performing ip owes of twenty nineteen and twenty twenty. Our crowd. Investors were, and how you can join them in what's next, with our crowd, accredited, invest Others have access to invest directly easily and, most importantly, early hour crowd. Investors have benefited from our core companies, IP owing, like beyond meat or being bought by companies like Intel, Nike, Microsoft, an Oracle, our crowds, investment profession, leverage their extensive network to review some of the most promising private companies and start ups in the world.

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to enter com for customer support. The business messenger that uses chat, Botz shared in boxes, apps and more enter comes business, messenger was other questions that can be answered automatically. So customer support fields less like Groundhog Day and more like help is on the way would intercom dot com, slash support to learn more about inner, comes business, messenger for customer support. This Twenty. Sixteen Miami Florida it's a balmy evening and alive, reason swaying through the palm trees. Reach driver glances down at the black insulated delivery bag and Phronsie she's Cotter first order. The night and she's rushing get it there quickly.

Ober was recently authorized to operate in Miami and the night loving city is buying in big time. But it still early and ride Rico. sir. Only trickling in so the drivers, picking up extra work delivering food instead of people. familiar golden arch comes into view. This can't be right, she checks or gps and cranes your neck to look out the window, Slow to make the turn no, this is definitely ride. She pulls up to the intercom high I'm here to pick up an order for goober eats for Gary, we'll be right with you. Ve just pull up the next window she leans over to grab the brown paper bag covered in red and yellow. Writing, then, She talks it and we're insulated bag. This is her first ever pick up from Mcdonalds.

And it won't be her last october- It's just launched their first major restaurant chain, partnership with Mcdonald's in Miami and it's a game, changer post has to put door dash has when these in the Cheesecake factory, but Mcdonalds is bigger than all of them. With close thirty seven thousand locations and more than twenty Four billion dollars and annual revenue with Mcdonalds bereaves sees orders skyrocket, close to thirty percent in Miami. Sure some of the orders are for a few dollars worth of food and food. regions are losing money on them, but the companies leaning critical mass by adding users It is becoming a go to or Hungary impatient customers across socio economic strategy. After a success, we'll test run in Miami Goober Red X, and the companies partnership with Mcdonald's nationwide

and slowly, it begins to claw market, share away from grub hub and door dash ooh breeds remains under the firm command of thirty seven year old Jason Druggie one founder and CEO Travis Callum next proteges who lab Companies, food delivery project from the start, but Google is undergoing unprecedented turbulence. Even for Silicon Valley. By twentieth twenty seventeen. The board make so bold choice. Colony infamous bad boy. Leader he's come your fire for various misdeeds is forced to leave elder more subdued figure, Dara cause we're Shockey, replace him No one knows whether this new ceo will be able to rehabilitate public perception of goober and by extra who bereaves right now, that's anyone's guess,

February. Twenty eighteen town San Francisco, a court room is packed with journalists, grub hubs. accidents and some delivery drivers they there do here, a ruling that could change their futures magistrate, Judge Jacqueline Scott Coralie starts talking. I have decided this driver does not qualify for the protection of employees under California LAW rub executive ship to keep from clap your hands corny continues Mr Lawson is an employee, has rights to minimum wage overtime, expense. This meant and workers compensation benefits. If he is not, he gets none based on but the court observed at trial and the facts found, the court finds that the four months Mr Larsson perform delivery services for grub. He wasn't it

Bennett contractor. Accordingly. Judgment must answered in favour of grub up against. Mr Larsson, the drivers are devastated, drivers have been saying that, even though their working essentially full time hours, they are getting any benefits and some Barely making ends made Others say they haven't been earning enough to cover repairs on their car or to make the gas money on the trip worth. If this decision is a huge deal, especially because of the state at San California. Has high standards for establishing workers as independent contractors. This is first time, a judge has ruled in the company's favour, not the employees, and it sets an important precedent, if grub hub can continue to convince California judges that its drivers are contractors, not employees,

It will probably be able to do so across the rest of the country. To the lawsuit also spells a wind for who Bereaves posted mates and door dash. Georgia she's been gradually picking up steam. Signs more and more restaurants onto its service. August, twenty eighteen door dash goes by. To investors showing off the roots of its new strategy and raise Two hundred fifty million dollars at a four billion- dollar evaluation, its proof, how successful shoes model of prioritizing restaurants over customers has been, but door dash is the only one seeing gains Postman it is on the rise. Thanks to its celebrity fans. its June twenty Ain T Kiley Jenner, the young member of the core dash engender family and one of them,

follow people in the world is hungry. this post mates again and again, while on a Photoshop in total, cheap It five orders. In one day mates executives, are ecstatic the company has her share her post Bates receipts on their blood. She spends ten thousand dollars on posts mates in a year, a few months later in September. Twenty eighteen housemaids, is three hundred million dollars in a deal that values ed at one point: two billion dollars Bastion, Layman's little start up. Officially a silicon valley, unicorn. Meanwhile, Reed's focuses on restaurants, with vast delivery, strategy is winning over the young profession crowd, who price beat over everything else and while Postman spoke, as is on cool places like sugar, fish sushi and no barn door dash

come back is all all about sheer volume in December twenty eighteen door dash overtakes blueberries to hold sway in place in total. U S, food delivery, sales behind grub, but Jordan, cash will struggle to hold onto market share when Bereaves decides to by its way to the top on the net. Deborah. So the delivery apps consolidate in order to grow, but a man your California proposition threatens the this model of all companies from during this is episode. Three food delivery, wars for business wars, Like our show, please give us a five star rating interview and be sure to tell your friends follow business wars on Apple podcast, Spotify, Spotify, Amazon, music, the wonder reactor wherever you're listening right now, listen at

free by joining wonder replies go find some links and offers more sponsors and the episode notes supporting them helps us keep offering our shows for free another where you can support the show by filling out a small survey at wondering dot com, slash survey and tell which business stories you'd like to hear a quick note. Recreations you ve been hearing. In most cases we can't know exactly what was said, though senior drama decisions, but their based on historical research. I'm you're here David round, Natalie Robot wrote this story: Karen Low is our senior producer and editor edited and used by Emily Frost Voice, did by Michel Felony sound designed by Kyle Randall Young is our associate producer. Our producers Dave shilling our exit, Producers are Jenny, Lauer, Beckmann Marshall, Louie Crew,

by or Non Lopez for, wondering, hey Might Corey. The host of wandering show against the odds in our next season. I'm telling an amazing true story about american sailors who wrecked their ship off the coast of Africa. In one thousand, eight hundred and fifteen they're captured by a nomadic tribe to escape, they will need to cross the largest hot desert in the world to reach civilization. They will battle against blistering heat, inhumane conditions, hunger, First, there heroic fight to get home will have a much greater impact than on their own lives. It will influence a future president and change the course of american history in ways that are still felt today. This is the true story of the men who made it and it's one that you don't want to miss.

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