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Well, it's a pretty huge loss (more than revenue! Also, I think people were surprised or amazed that they had no core profitability. Especially when it's likel
by martinald 9y ago
Well, it's a pretty huge loss (more than revenue!
Also, I think people were surprised or amazed that they had no core profitability. Especially when it's likely COGS will go up with more and more regulation around their gig economy employees
- T2_t2 9y agoDepends what you think the lifetime value of a customer is, plus what the ongoing cost to retain them is. I ordered off Deliveroo in Sydney Australia, and they advertise on AdWords against individual restaurant names. If the Diliveroo brand is strong, and that AdWords click made me a Deliveroo customer, that is a win. If I always search and they always pay, this may prove problematic long term. That's the equation - if $X upfront + $y ongoing < lifetime value then you have a chance at profitability, assuming you can get overheads under control / can scale up the offering with minimal growth in overheads (the classic 2X revenue, 1.5X costs model).