DoorDash warns Bay Area restaurants they may be on AI ordering startup Bites without consent

One of DoorDash's August letters landed with Jay Jayaraman, an owner with 13 restaurants on Bites who counts himself among the platform's early adopters ^[13]. He signed up on purpose. Before Bites, he estimates, 80 percent of his orders came from DoorDash. Now about 65 percent come through Bites and 25 percent through DoorDash, with a sliver from Uber Eats and Grubhub ^[14]. DoorDash's share of his orders fell 55 points ^[17]. He says his margins are higher on Bites orders than on DoorDash orders ^[16]. "We are seeing a huge drop or a huge shift away from DoorDash, which I personally welcome because it's adding to my bottom line," Jayaraman said ^[15].

DoorDash's letter assumes a restaurant that is on Bites by accident. That restaurant never agreed to Bites' "terms, pricing structures, or service standards" and cannot control the accuracy of its menu or hours there ^[4]. Some of those restaurants exist. Bites acknowledges that some asked to be removed and says they had been listed from old demos ^[11]. Other letters went to restaurants that were not on Bites at all ^[12]. The Verge allows two readings of the mailing: DoorDash proactively alerting its partners, or DoorDash "going on the offense over a relatively small peer" ^[5].

Jayaraman's 13 locations are about 4 percent of Bites' roughly 300 restaurants ^[18]. In The Verge's report, the evidence that restaurants are moving orders from DoorDash to Bites comes from his estimate.

Bites' pitch is the AI agent. The company has a conventional app but bills itself as "AI native," because diners can order from its restaurants inside ChatGPT and the order goes directly to the restaurant ^[8]. The Verge calls Bites the literal embodiment of what it has named "the DoorDash problem," in which services lose the customer relationship once people reach the web through language models instead of apps ^[9]. What Jayaraman describes is a margin gain on a cheaper channel ^[16]. The report does not say how many of his Bites orders come through ChatGPT versus the Bites app, or what Bites charges the restaurant on each order.

An operator holding the letter can sort the response with two tests. The first is whether the restaurant agreed to the listing. The second is whether it can see what it nets on an order from that channel after every fee. A restaurant that agreed and can see that number is in Jayaraman's position, and the choice comes down to margin. If it agreed but has not measured, volume is moving on the strength of a pitch, and per-order net is the figure to get before moving more. A restaurant listed without consent that is still taking orders has a menu and hours problem first, the two things the letter says it may not control ^[4]. Listed without consent and taking no orders is the simplest case: DoorDash's letter included instructions for asking Bites to take the listing down ^[4].