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This is what surprised me about Uber wanting to buy Grubhub. I am near willing to bet that Uber (or Lyft) will never turn a lifetime profit. So Grubhub, is in a
by partiallypro 6y ago
This is what surprised me about Uber wanting to buy Grubhub. I am near willing to bet that Uber (or Lyft) will never turn a lifetime profit. So Grubhub, is in a model that is even harder to break into. The only way this will ever work is for there to be a monopoly with one company doing all deliveries. The problem is obviously that they aren't just competing against all the other national food delivery services...but they are competing with the restaurants themselves. When people want delivery they order pizza, the delivery fee is virtually nothing. The only time I use something like Uber Eats is when I am under intense time constraints and can't leave...or I just can't leave for other reasons. Otherwise I'm not going to pay $25 just to have a delivery of food. I can go to Domino's and pay $3 for the same service. I just don't see how the model is sustainable. It works great in our current easy money society but eventually it will not be able to escape the idea that you need to actually make money.
One model I do think is interesting is something like Goldbelly. It's not instant food, but you can get food from any participating restaurant in the nation and have it mailed to you and you then cook/reheat it. That eliminates so much overhead, and you're using an existing logistics provider. Obviously that isn't quite the same market, but it's similar and seems much more sustainable.
- mkolodny 6y agoI think the main reason services like Uber Eats aren't profitable right now are because of competition. They have to out-market and under-price their competitors. Buying GrubHub may make Uber Eats profitable in places where GrubHub is their main competition.
- almost_usual 6y agoSo they’re only profitable as a monopoly because they can charge high prices? Seems like a bad business model.