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Notes -
A lot of it is VC, a lot of it is customers at more expensive delivery times who are less price sensitive, a lot of it is restaurant markups.
Consider that food is routinely marked up by restaurants on these apps by 35-40% plus that there are high service fees (which is where the apps make their money) plus delivery fees and tips (which is where drivers make theirs), and you can see why these 30-40% discount codes are ubiquitous. At most the restaurant might make 10-20% less than from an in-person takeout order, but for bulk slop food (which most delivery food is) margins are both higher and fixed costs like rent, salaries for kitchen staff etc are being paid anyway. Raw ingredients are a modest part of the cost of a meal. Takeout apps also let restaurants switch on or off delivery whenever they’re busy or even to do dynamic discounting; on a quiet Tuesday night, a hundred extra delivery orders sold for somewhat less revenue is great.
Say the app’s usual cut is 30% of the menu price plus the 10% service fee. When they issue you the discount code for 40% off, they’re not really burning money so much as not making it (ie Uber Eats will waive a huge chunk of their fee on the restaurant side). The rider is still being paid; the restaurant agrees to a slight discount (nowhere near 40%) in exchange for more sales, the ride share app is revenue-mostly-neutral and hopefully hooks a new customer.
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