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They don't have a moat. They are one of many similar players in the same space, which are interchangeable both to their workers and their customers, and they ca
by twblalock 6y ago
They don't have a moat. They are one of many similar players in the same space, which are interchangeable both to their workers and their customers, and they can only compete on price.
Drivers often work for several of these companies at the same time, and customers will use whichever one is cheapest at the time they feel like placing an order.
At the moment, with so many similar companies in the space, I don't see how any of them could become profitable, especially while being engaged in a race to the bottom on prices (because price is all that customers actually care about; the experience of a guy in a car bringing stuff to your door is pretty much the same with all of these companies).
- dragonwriter 6y ago> because price is all that customers actually care about Customers actually care about service, too, but the two-sided-market-drivers-aa-contractors models doesn’t really leave the parts of service that would matter in the hands of the delivery matchmaker, so it's true that all they have is price, not because it's all customers care about but because it's all the firm has any kind of control over, by design.
- JMTQp8lwXL 6y agoThey could let customers pay a N% (say 10%) premium for a ...better-rated delivery courier? I'd be curious to see how that'd A/B test. Probably would fail, but nonetheless prove a point if there's any 'service' component that is possible to compete on.
- maxyme 6y agoI believe Uber eats is currently doing that. Recently I noticed an option to pay $1.50 extra for "Priority delivery" which may be a combination of what you mention as well as modifying the delivery algorithm in your favor.
- twblalock 6y agoIf one company succeeded at doing that, all of the others would copy it by the end of the month. Again, no moat.
- twblalock 6y agoThe service is the same with all of these companies. Someone brings a bag of stuff to your door. In my experience they are all about as fast each other.