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I wouldn't go so far as saying they're "fundamentally unprofitable". They have a couple long-term options: the often-discussed one is autonomous driving (though

I wouldn't go so far as saying they're "fundamentally unprofitable". They have a couple long-term options: the often-discussed one is autonomous driving (though it's becoming increasingly obvious this is many years out), but the less discussed one is vertical integration. It's not hard to imagine them choosing to pursue Amazon-style vertical integration where they own the "restaurants" themselves. I put "restaurants" in quotes, because it'll almost certainly just be warehouse-style kitchens, where drivers skid up out front and grab food from heated tables, and you won't be able to dine-in at all. It would fill the same role for aspiring restaurateurs as food trucks do today: a startup cost, low-barrier to entry way to build out a brand, rapidly iterate menu-items, and begin building revenue to eventually secure a business loan to open a proper restaurant. If UberEats can really squeeze both the drivers AND the restaurants, there's no fundamental reason that food delivery can't be done profitably - pizza companies have been doing it in almost all markets for decades. Brick and mortar retail stores got eaten by Amazon warehouses, and it seems inevitable that many brick and mortar restaurants will eventually get eaten by a massive tech company as well.

darrenoc 6y ago
It's noteworthy that Deliveroo is already doing the kind of vertical integration you describe, it's called "Deliveroo Editions"
s_dev 6y ago
>It's not hard to imagine them choosing to pursue Amazon-style vertical integration where they own the "restaurants" themselves. I put "restaurants" in quotes, because it'll almost certainly just be warehouse-style kitchens, where drivers skid up out front and grab food from heated tables, and you won't be able to dine-in at all. The term for this is dark kitchens.
et-al 6y ago
> If UberEats can really squeeze both the drivers AND the restaurants, there's no fundamental reason that food delivery can't be done profitably - pizza companies have been doing it in almost all markets for decades. Pizza delivery is profitable because they sell cardboard and depend on teenager drivers relying on their parent's auto insurance. Anyone who's actually looked at the person delivering their food would have thought twice about the margins in food delivery. To spell it out: food delivery is often performed by immigrants with few choices for under-the-table work. The margins are thin-to-none. The current system has worked because no one's investigating the thousands of independent restaurants. Now tech companies are trying to do the same thing, but multimillion dollar corporations have a harder time hiding their labor exploitation from the public. Going back to ryan's point, I agree that with full vertical integration (dirt cheap ingredients and centralised factory kitchens), food delivery could be profitable, but at what point is one just selling frozen food from a microwave/oven in the back of a car?
zepearl 6y ago
>It's not hard to imagine them choosing to pursue Amazon-style vertical integration where they own the "restaurants" themselves. I always wondered something about those meals that are available on airplanes: in the past I liked quite a lot most of them (e.g. a small piece of meat/fish/other, some vegetables and/or rice, a slice of bread, a small dessert) => wouldn't it be quite profitable to have a similar delivery service for "kits/menus" like those ones (just e.g. ~4 different "kits" available to be ordered daily), cold (but pre-cooked if needed) that only need to be warmed up at home? (if 3 stewards/esses, on a moving tube, managed to warm that up for 300 people then I guess that I'll manage to do the same for myself at home)? I admit that on one hand the "delivery"-part of the service would be related only to getting fresh (uncooked or "freshly pre-cooked") stuff (not ready for consumption), but on the other hand that way the delivery could be spread over a longer timespan (multiple deliveries per trip, better delivery organization, therefore less costs) and could be left in the mailbox (assuming at least a mediocre insulation of the package). Here in Switzerland/Zurich I am aware of some similar services, but they deliver only the ingredients (then I would still have to actively cook). Supermarkets do have some similar pre-cooked stuff, but most (not all, but most) is quite terrible (probably because there the stuff has to be able to lie there for days/weeks - definitely not similar to what I used to eat on airplanes) and especially it never changes. (I used to fly only in Europe using "Swiss", "Air Berlin", "Lufthansa", maybe as well "KLM"/"Air France", always to/from Zurich - your experience with other airlines / in other location might be different) Woudln't it be nice to get back home and find in the mailbox a ready-to-be-warmed-up (maybe actually "cooked", but in an extremely simple way) menu? The delivery, being all sourced from the same place and being spread over many hours would not be as expensive as it is currently done for hot stuff coming from multiple restaurants, and the small amount of different menus (4 as mentioned above or slightly more) would allow to buy more source material for less $. EDIT: I admit of not having any clue how the companies that prepare meals/menus for airlines operate => there might therefore be some important details that make the whole concept crumble... :)
- rrrrrrrrrrrryan 6y ago
  Switzerland is strange because restaurant food is so tremendously expensive there compared to the rest of the world. In most cities in America, for $5 you can get a half-decent meal that's quite a bit more palatable than airline food, and for $10 you can get something from (mostly immigrant-run) restaurants that's somewhat nutritious as well. There are meal-delivery services here that are basically what you describe, but they usually deliver food weekly and they're kind of pricey. They're mainly targeting time-strapped single people who are trying to eat healthier and don't want to do all the mental work that goes into grocery shopping, meal prepping, cooking, etc.

darrenoc 6y ago

It's noteworthy that Deliveroo is already doing the kind of vertical integration you describe, it's called "Deliveroo Editions"

s_dev 6y ago

>It's not hard to imagine them choosing to pursue Amazon-style vertical integration where they own the "restaurants" themselves. I put "restaurants" in quotes, because it'll almost certainly just be warehouse-style kitchens, where drivers skid up out front and grab food from heated tables, and you won't be able to dine-in at all. The term for this is dark kitchens.

et-al 6y ago

> If UberEats can really squeeze both the drivers AND the restaurants, there's no fundamental reason that food delivery can't be done profitably - pizza companies have been doing it in almost all markets for decades. Pizza delivery is profitable because they sell cardboard and depend on teenager drivers relying on their parent's auto insurance. Anyone who's actually looked at the person delivering their food would have thought twice about the margins in food delivery. To spell it out: food delivery is often performed by immigrants with few choices for under-the-table work. The margins are thin-to-none. The current system has worked because no one's investigating the thousands of independent restaurants. Now tech companies are trying to do the same thing, but multimillion dollar corporations have a harder time hiding their labor exploitation from the public. Going back to ryan's point, I agree that with full vertical integration (dirt cheap ingredients and centralised factory kitchens), food delivery could be profitable, but at what point is one just selling frozen food from a microwave/oven in the back of a car?

zepearl 6y ago

>It's not hard to imagine them choosing to pursue Amazon-style vertical integration where they own the "restaurants" themselves. I always wondered something about those meals that are available on airplanes: in the past I liked quite a lot most of them (e.g. a small piece of meat/fish/other, some vegetables and/or rice, a slice of bread, a small dessert) => wouldn't it be quite profitable to have a similar delivery service for "kits/menus" like those ones (just e.g. ~4 different "kits" available to be ordered daily), cold (but pre-cooked if needed) that only need to be warmed up at home? (if 3 stewards/esses, on a moving tube, managed to warm that up for 300 people then I guess that I'll manage to do the same for myself at home)? I admit that on one hand the "delivery"-part of the service would be related only to getting fresh (uncooked or "freshly pre-cooked") stuff (not ready for consumption), but on the other hand that way the delivery could be spread over a longer timespan (multiple deliveries per trip, better delivery organization, therefore less costs) and could be left in the mailbox (assuming at least a mediocre insulation of the package). Here in Switzerland/Zurich I am aware of some similar services, but they deliver only the ingredients (then I would still have to actively cook). Supermarkets do have some similar pre-cooked stuff, but most (not all, but most) is quite terrible (probably because there the stuff has to be able to lie there for days/weeks - definitely not similar to what I used to eat on airplanes) and especially it never changes. (I used to fly only in Europe using "Swiss", "Air Berlin", "Lufthansa", maybe as well "KLM"/"Air France", always to/from Zurich - your experience with other airlines / in other location might be different) Woudln't it be nice to get back home and find in the mailbox a ready-to-be-warmed-up (maybe actually "cooked", but in an extremely simple way) menu? The delivery, being all sourced from the same place and being spread over many hours would not be as expensive as it is currently done for hot stuff coming from multiple restaurants, and the small amount of different menus (4 as mentioned above or slightly more) would allow to buy more source material for less $. EDIT: I admit of not having any clue how the companies that prepare meals/menus for airlines operate => there might therefore be some important details that make the whole concept crumble... :)

rrrrrrrrrrrryan 6y ago
Switzerland is strange because restaurant food is so tremendously expensive there compared to the rest of the world. In most cities in America, for $5 you can get a half-decent meal that's quite a bit more palatable than airline food, and for $10 you can get something from (mostly immigrant-run) restaurants that's somewhat nutritious as well. There are meal-delivery services here that are basically what you describe, but they usually deliver food weekly and they're kind of pricey. They're mainly targeting time-strapped single people who are trying to eat healthier and don't want to do all the mental work that goes into grocery shopping, meal prepping, cooking, etc.