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The problem I see is that Uber doesn't understand that their UberEats market is not necessarily the same as their Uber taxi market. What they fail to realize i

The problem I see is that Uber doesn't understand that their UberEats market is not necessarily the same as their Uber taxi market. What they fail to realize is that by centralizing their focus on highly populated metropolitan area like NYC and SF they are essentially trying to compete in markets that I wasn't even aware could have restaurants capable of sustaining their businesses when they don't have the option for delivery. I mean i've been on treasure island and ordered food from just about every notable restraunt in SF you could think of and they all had in house speed delivery services that were willing to travel that far and still managed to get there within 45-75 minutes of placing the order. (presuming you don't order too close to the nightly commute out of the city) Where Uber should really focus on promoting UberEats is more rural cities like just about every town in the midwest because out here we have a ton of towns with privately owned restaurants that are extremely profitable and yet don't offer delivery services because it's not profitable for them to do so; but it would be profitable for everybody if Uber offered their services as the middle man for every restraunt in town. I mean i know of like 4 restaurants in town that 3 or 4 ubereats drivers could provide delivery services for and I know that number of drivers would have to grow to 8 or 12 within a year of providing the service. And there is virtually no competition out here and out here car delivery actually makes a lot more sense than trying to figure out where to park in NYC or SF. Honestly the fact that Uber isn't already implementing this in my town by now, would concern me enough to consider shorting their stock. There is nothing more telling in my view that a company is headed into uncharted territory it's totally not prepared to navigate than a company not understanding where they aught to set their heading because they haven't got even the slightest clue in which direction all the booty has been buried.

djhn 7y ago
I think you are overstating the opportunity here. Unit economics of scalable food delivery do not support small towns. Scale requires sales reps to sign restaurants, account managers to maintain the relationships with the restaurants, local operations people to recruit, induct, clothe and support the delivery guys, local marketing managers to get the initial userbase. And that's not even considering the sprawling single-center infrastructure of smaller towns, with most affluent folk that could in theory order takeout every day living outside the immediate center of the town. You maximize efficiency (cost per order, or in other words how many orders per hour a salaried employee can deliver, or in other words how little you can pay a non-salaried 100% commission-based delivery partner while they still maintain hourly earnings they deem acceptable) by increasing the pace at which deliveries are made by any single courier. A dense population and a uniform distribution of popular restaurants will result in a courier going point A to B, B to C, C to D. Each node represents both a restaurant and the next delivery location. A typical small town infrastructure would result in the delivery person going A->B, B->A, A->C, C->A, A->D, D->A. The town's only two restaurants are located in A, whereas B, C and D are delivery destinations. That's double the marginal cost per order.

djhn 7y ago

I think you are overstating the opportunity here. Unit economics of scalable food delivery do not support small towns. Scale requires sales reps to sign restaurants, account managers to maintain the relationships with the restaurants, local operations people to recruit, induct, clothe and support the delivery guys, local marketing managers to get the initial userbase. And that's not even considering the sprawling single-center infrastructure of smaller towns, with most affluent folk that could in theory order takeout every day living outside the immediate center of the town. You maximize efficiency (cost per order, or in other words how many orders per hour a salaried employee can deliver, or in other words how little you can pay a non-salaried 100% commission-based delivery partner while they still maintain hourly earnings they deem acceptable) by increasing the pace at which deliveries are made by any single courier. A dense population and a uniform distribution of popular restaurants will result in a courier going point A to B, B to C, C to D. Each node represents both a restaurant and the next delivery location. A typical small town infrastructure would result in the delivery person going A->B, B->A, A->C, C->A, A->D, D->A. The town's only two restaurants are located in A, whereas B, C and D are delivery destinations. That's double the marginal cost per order.