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Costco sells its hot dog and drink combo for $1.50. A delivery app is betting that getting it delivered and brought to your door is worth a much bigger bill.\u00a0<\/p>\n
According to a recent report from media site SFGate<\/a>, there\u2019s a new food delivery service in town that promises to bring Costco food court items straight to customers. The platform, called No Tip, is a new service based in Southern California. The mastermind behind it is Jack Chen, a longtime<\/a> software engineer.\u00a0<\/p>\n The process is simple. Customers order what they want from Costco\u2019s food court menu through No Tip. Someone will physically go to Costco, wait in line, pick up the food and deliver it. Chen promises to refund customers if their food arrives late \u2014\u00a0and says the fees are all-inclusive, so no need to pay a tip or added fees.\u00a0<\/p>\n However, customers are certainly paying extra for convenience.\u00a0<\/p>\n A whole pizza that costs members $9.95 at the food court runs $30 through No Tip, while the $7.99 rotisserie chicken chef salad jumps to $28 on Chen\u2019s menu. But the biggest sticker shock belongs to Costco\u2019s famous $1.50 hot dog-and-drink combo: No Tip charges $18 to bring it to your door. That\u2019s a 1,100% markup.<\/p>\n Chen defended No Tip\u2019s prices. He told SFGate that he built the site to feed a crowd, not just someone craving a hot dog for lunch \u2014 though he will take that order too.\u00a0<\/p>\n Chen says No Tip\u2019s sweet spot is office lunches, birthday parties and big family dinners. The service is suited for situations where paying for delivery means avoiding a trip across town with a trunk full of pizzas.\u00a0<\/p>\n \u201cA lot of offices are ordering from me,\u201d Chen said in a phone interview with SFGate. \u201cIt\u2019s the company\u2019s money. As long as you\u2019re not too expensive, I mean, they\u2019ve got the money to blow.\u201d<\/p>\n The company also benefits when customers crave Costco food court items over other brands. \u201cYou\u2019d be surprised how some people are just craving it specifically,\u201d Chen said.<\/p>\n No Tip is capable of accommodating groups of up to 200 people and includes plates and forks with delivery. It is up to the host to set up and serve the food.\u00a0A company ordering 200 hot dogs would have to pay $18 for each one. <\/p>\n Chen is personally handling some deliveries and has brought on friends and \u201csome guys\u201d he pays \u201con the side right now\u201d to help with orders. He wants to eventually add in-house drivers.\u00a0<\/p>\n Chen created No Tip two months ago and claims that the service stretches across all of Southern California through 66 fulfillment locations.\u00a0<\/p>\n He had the idea when he was living near Venice Beach and wanted Costco pizza for dinner one night. Getting that pizza meant making the trip to Costco and braving food court lines. Chen then had the idea to eliminate the hassle of getting Costco food court items by offering delivery. He bet that other Costco fans would also pay extra to have their favorites delivered.\u00a0<\/p>\n \u201cI know my friends have paid, like, $30-plus dollars for some terrible Domino\u2019s in the past,\u201d he said. \u201cSo why not try to do this?\u201d<\/p>\n<\/p><\/div>\n Costco sells its hot dog and drink combo for $1.50. A delivery app is betting that getting it delivered and brought to your door is worth a much bigger bill.\u00a0<\/p>\n According to a recent report from media site SFGate<\/a>, there\u2019s a new food delivery service in town that promises to bring Costco food court items straight to customers. The platform, called No Tip, is a new service based in Southern California. The mastermind behind it is Jack Chen, a longtime<\/a> software engineer.\u00a0<\/p>\n The process is simple. Customers order what they want from Costco\u2019s food court menu through No Tip. Someone will physically go to Costco, wait in line, pick up the food and deliver it. Chen promises to refund customers if their food arrives late \u2014\u00a0and says the fees are all-inclusive, so no need to pay a tip or added fees.\u00a0<\/p>\n<\/p><\/div>\nChen stands by the pricing<\/h2>\n
How Chen came up with the idea<\/h2>\n
Key Takeaways<\/h2>\n
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