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> They make a lot of profit I have always heard food delivery as a business is a great way to lose money. Do you have any examples of companies doing it profi

> They make a lot of profit I have always heard food delivery as a business is a great way to lose money. Do you have any examples of companies doing it profitably?

AmericanChopper 7y ago
Different market, but Gojek does it profitably. They do delivery, ride hailing, and a bunch of other stuff, and all of their segments are profitable, except ride hailing. They also have a slightly different model, which might not work in other markets. They don’t need to onboard merchants in the same way, because with them the driver pays for the order, and then the customer pays the driver, either in-app or with cash.
- bduerst 7y ago
  Interesting business model, but Jakarta is insanely dense (largest city in APAC) which is probably why its more profitable. In the U.S. you have urban sprawl and suburbs, which increase variable costs of delivery.
  - AmericanChopper 7y ago
    Jakarta has ridiculous urban sprawl, has worse traffic than any city in the US, and floods for months in the year. I lived there for years, it’s much harder to get around than LA or NY.
    - bduerst 7y ago
      That probably explains why their model has the driver taking on the liability then.
      - AmericanChopper 7y ago
        The driver doesn’t take on any liability at all, it’s all backed by the company. I’m not sure why you’re so keen to shit on this business when you don’t seem to know anything about it or the market it operates in.
        bduerst 7y ago
        Relax, I'm not attacking you or the business - you said this: "because with them the driver pays for the order, and then the customer pays the driver" which seems like a liability for the driver. It makes sense in a region that floods regularly.
        AmericanChopper 7y ago
        They just handle the transaction. The system is technically exploitable from a driver perspective. Earlier this year a group of drivers were arrested for defrauding the company with hundreds of fake orders.
SilasX 7y ago
Every pizza chain.
- jonknee 7y ago
  They make money selling pizza (super high margin), not at delivery.
  - SilasX 7y ago
    It's a distinction without a difference. It's not like they lose money by offering the delivery service, so they've found some model where delivering food is profitable, it's just that the model involves a tight coupling with the food producer. It might be more accurate to say that food delivery as a separate business from producing it is hard to profit on.
  - JustSomeNobody 7y ago
    Unless you’re Papa Johns and you tack on a delivery fee that doesn’t go to the driver.
bardworx 7y ago
Unit economics on food delivery sucks (if that’s your only business)...too many inefficiencies with travel to/from (time wasted w/empty hands). Food delivery as part of a QSR can be profitable but most businesses don’t track margins efficiently enough to know the difference.

> They make a lot of profit I have always heard food delivery as a business is a great way to lose money. Do you have any examples of companies doing it profitably?

AmericanChopper 7y ago

Different market, but Gojek does it profitably. They do delivery, ride hailing, and a bunch of other stuff, and all of their segments are profitable, except ride hailing. They also have a slightly different model, which might not work in other markets. They don’t need to onboard merchants in the same way, because with them the driver pays for the order, and then the customer pays the driver, either in-app or with cash.

bduerst 7y ago
Interesting business model, but Jakarta is insanely dense (largest city in APAC) which is probably why its more profitable. In the U.S. you have urban sprawl and suburbs, which increase variable costs of delivery.
- AmericanChopper 7y ago
  Jakarta has ridiculous urban sprawl, has worse traffic than any city in the US, and floods for months in the year. I lived there for years, it’s much harder to get around than LA or NY.
  - bduerst 7y ago
    That probably explains why their model has the driver taking on the liability then.
    - AmericanChopper 7y ago
      The driver doesn’t take on any liability at all, it’s all backed by the company. I’m not sure why you’re so keen to shit on this business when you don’t seem to know anything about it or the market it operates in.
      - bduerst 7y ago
        Relax, I'm not attacking you or the business - you said this: "because with them the driver pays for the order, and then the customer pays the driver" which seems like a liability for the driver. It makes sense in a region that floods regularly.
        AmericanChopper 7y ago
        They just handle the transaction. The system is technically exploitable from a driver perspective. Earlier this year a group of drivers were arrested for defrauding the company with hundreds of fake orders.

SilasX 7y ago

Every pizza chain.

jonknee 7y ago
They make money selling pizza (super high margin), not at delivery.
- SilasX 7y ago
  It's a distinction without a difference. It's not like they lose money by offering the delivery service, so they've found some model where delivering food is profitable, it's just that the model involves a tight coupling with the food producer. It might be more accurate to say that food delivery as a separate business from producing it is hard to profit on.
- JustSomeNobody 7y ago
  Unless you’re Papa Johns and you tack on a delivery fee that doesn’t go to the driver.

bardworx 7y ago

Unit economics on food delivery sucks (if that’s your only business)...too many inefficiencies with travel to/from (time wasted w/empty hands). Food delivery as part of a QSR can be profitable but most businesses don’t track margins efficiently enough to know the difference.