The Downside to Group-based Online Deals

Groupon and Living Social are two of the fastest growing technology companies in the world.  We all know the drill, you get an email for a great deal (usually at least 50% off) and when a certain number of people also buy into the deal, it's triggered and you get the coupon.  By far the most popular types of Groupons are the 'going out' deals for restaurants, bars, etc.

But am I the only one who isn't a fan?  I feel like this is akin to Restaurant Week, except that not everyone in the restaurant is in on the gig.  So I have to pull out the coupon, present it to the waiter, only to be treated like a second class citizen since 90% of the users probably don't tip on what the bill SHOULD have been without the coupon.  Ok, maybe I just feel like a second class citizen and the servers don't care.  But the point is, I feel uncomfortable.

But even more of a problem lies in the essence of their business model - having the GROUP in the Groupons.  Take today's deal for example - Cafe Asia here in DC.  So far, almost 1,700 people have bought this deal.  That means that for the next two months, Cafe Asia will be jammed with people.  It will be jammed with people - many of whom would not otherwise be at Cafe Asia.  So, when I go in to get my Kirin Ichiban on tap and my Tom Yum Soup to-go (a weekly-or-so trek for me), I will have to fight through a crowd of customers, argue with cranky servers, and receive food that probably isn't as good as usual (see the previous Restaurant Week comparisons?).

Maybe Cafe Asia will weather the storm better than some.  Recently, Bucks Fishing and Camping in Northwest DC did a Groupon promotion.  Bucks is a relatively expensive place with a stellar reputation, so this was a deal worth getting.  Problem was, everyone that I heard from who went said the food and service sucked and the restaurant was overwhelmed.

I guess while they were getting their overcooked steak and bad service at Bucks, I was quietly enjoying my Kirin Ichiban on draft while waiting for my Tom Yum Soup from Cafe Asia.  Ohhhh, those were the days...