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I thought delivery apps aren't making a profit either.

dmix 6y ago
Foodora was extremely popular here in Toronto, you’d see the bike delivery people all over the place and they signed up tons of restaurants but they just shut down citing the margins simply not making sense for the business. It didn’t help that a month before shutting down a group of workers unionized in Ontario, and further threw a wrench in a terribly low margin business and now none of them have a job and the entire city is stuck using Uber Note: Foodora only shut down their Canadian business, not their European one. Foodora had acquired Hurrier which was our other homegrown food delivery service here in Toronto, which is obviously no longer an option either. They too were struggling with margins, which I know from speaking to people who worked there.
- dathinab 6y ago
  > It didn’t help that a month before shutting down a group of workers unionized in Ontario, and further threw a wrench in a terribly low margin business and now none of them have a job and the entire city is stuck using Uber I don't think unionizing is ever a problem. I you do moralistic acceptable business practices. If your business is only profitable by paying below acceptable salary, push side costs onto employees or cutting corner wrt. employee safety then it IHMO it is better for your business to close. Additionally if a whole industry is affected by this then IMHO it needs a major reform in how it works or it should just cease to exist. Sure food delivery can not cease to exist, it's needed but if their is no way to operate it profitable without taking advantage of delivery personal and/or restaurants then it needs a major change. Either people need to accept that delivered food is more costly or the state needs to subvention it (during epidemics and similar where it's an somewhat essential service for some people, like when your stove just broke yesterday).
  - dmix 6y ago
    Wake me up when that fantasy world becomes reality. In the mean time I’d rather not have to give Uber money.
cordite 6y ago
They aren't making a profit because they're spending more than they're making. They make enough to pay the driver, the operations around that, and the tech running the site. But their shareholders see this as an opportunity to expand the markets. They aren't taking this for granted, they're aggressively spending on marketing, on signing up restaurants for their platform (except DoorDash, they list most restaurants without partnership), on ads for Google, Facebook, and other major platforms. This is why they aren't making a profit. But it's eating so much into their costs that they're doing some sneaky practices: they're doing the same that Etsy does, taking more out of the net sales on advertising that the restaurant did not consent to knowing they will be charged for it as much as they were.

dmix 6y ago

Foodora was extremely popular here in Toronto, you’d see the bike delivery people all over the place and they signed up tons of restaurants but they just shut down citing the margins simply not making sense for the business. It didn’t help that a month before shutting down a group of workers unionized in Ontario, and further threw a wrench in a terribly low margin business and now none of them have a job and the entire city is stuck using Uber Note: Foodora only shut down their Canadian business, not their European one. Foodora had acquired Hurrier which was our other homegrown food delivery service here in Toronto, which is obviously no longer an option either. They too were struggling with margins, which I know from speaking to people who worked there.

dathinab 6y ago
> It didn’t help that a month before shutting down a group of workers unionized in Ontario, and further threw a wrench in a terribly low margin business and now none of them have a job and the entire city is stuck using Uber I don't think unionizing is ever a problem. I you do moralistic acceptable business practices. If your business is only profitable by paying below acceptable salary, push side costs onto employees or cutting corner wrt. employee safety then it IHMO it is better for your business to close. Additionally if a whole industry is affected by this then IMHO it needs a major reform in how it works or it should just cease to exist. Sure food delivery can not cease to exist, it's needed but if their is no way to operate it profitable without taking advantage of delivery personal and/or restaurants then it needs a major change. Either people need to accept that delivered food is more costly or the state needs to subvention it (during epidemics and similar where it's an somewhat essential service for some people, like when your stove just broke yesterday).
- dmix 6y ago
  Wake me up when that fantasy world becomes reality. In the mean time I’d rather not have to give Uber money.

cordite 6y ago

They aren't making a profit because they're spending more than they're making. They make enough to pay the driver, the operations around that, and the tech running the site. But their shareholders see this as an opportunity to expand the markets. They aren't taking this for granted, they're aggressively spending on marketing, on signing up restaurants for their platform (except DoorDash, they list most restaurants without partnership), on ads for Google, Facebook, and other major platforms. This is why they aren't making a profit. But it's eating so much into their costs that they're doing some sneaky practices: they're doing the same that Etsy does, taking more out of the net sales on advertising that the restaurant did not consent to knowing they will be charged for it as much as they were.