13 ms·

The speedy downfall of rapid delivery startups

117 points by taubek 4y ago

spaceman_2020 4y ago
Lots of them raised billions here in India. The business model is fundamentally unsound and rests on everyone, investors and founders included, riding that magic fairy tale called “scale” to make money.
dominotw 4y ago
anyone else notice truly horrific driving by prime delivery vans. I almost got ran over by a prime van making a rash right turn without checking the bike lane. Some of my friends have experienced this too here in chicago.
- Ekaros 4y ago
  Entirely expected. The rate of deliveries they are expected to do is very high. And then there is draconian surveillance involved. Though the later should avoid such cases as you had...
bhouston 4y ago
I think that it is likely these rise again (well maybe as different businesses) as delivery technology improves via more automation across the whole network.
fnordpiglet 4y ago
I still miss Kozmo.
daveoc64 4y ago
I used the Zapp service (https://tryzapp.com/ https://tryzapp.com/) while staying in London last year - it seemed to work OK. The thing I liked the most is that it had real-time stock management, so it could tell you if something was in stock when you place your order, and guarantee that you get everything you ordered. Ordering groceries online from the major supermarkets in the UK can be frustrating, because they simultaneously stop you ordering items they think will be out of stock on your delivery date (regardless of whether that's the case), and they have no idea what will be in stock until the day of the delivery. I think grocery delivery through services like Uber Eats and Deliveroo suffers from the same problem - if your item is out of stock, or the driver can't find it, you won't get it. In terms of the market, there are probably just too many companies trying to do the same or similar things.
- __alexs 4y ago
  The thing I liked most about Zapp is that they've given me £100 in discounts on £200 worth of shopping. The cost of revenue for all these rapid delivery companies must be insane.
  - tecleandor 4y ago
    Wow! VCs trying to destroy the market again... What could go wrong?
- xnorswap 4y ago
  By far my worst experience of any delivery was a recent deliveroo order. Our household were down with covid and therefore trying our best to isolate while at the same time we were running out of painkillers. All the supermarkets couldn't do same day delivery. Out of desperation we tried deliveroo. Ordered paracetemol, ibuprofen, strepsils and to make up the delivery some comfort food like cake, cokes and a few other essentials like milk, bread. Over half our order was "unavailable". We got none of the painkillers whatsoever, got a different loaf of bread. Only thing that actually arrived correct to order was the cokes. Tried to complain to deliveroo but never got passed the automated bots which gave us a pathetic amount off our "next order" which is useless because I'm never going to order from them again. If it weren't for an introductory offer we'd have ended up spending a vast amount on essentially nothing between the delivery fee and the price gouging that's baked into the quoted prices.
  - nice__two 4y ago
    If _one_ bad experience turns you into a lost customer, then this business model purely operates on the happy-path and hopes for the best. I am highly sceptical that the core promise “anything, anytime“ is really what people need: they use it, because it’s possible, not because they want to use it. The alternative to your problem would be asking a friend/relative to do the shopping, using the in-house delivery service or simply make do without. All more secure options than ordering something and not being sure, you’ll actually get it. I say good riddance for this petty excuse of a business!
aden1ne 4y ago
In the Netherlands, these services tried to disrupt the supermarket market by basically ignoring zoning laws. As the externalities dark stores create have been disrupting enough for residents to complain en masse, cities are clamping down hard. Which means that 15-minute delivery promise is increasingly impossible to achieve.
- nikanj 4y ago
  Why on earth is it illegal to have a grocery store closer than 15 minutes from your home?
  - rootusrootus 4y ago
    It's not a grocery store, it's a dark store. I.e. just a small warehouse of food that has delivery drivers coming and going 24 hours a day to make local deliveries faster. If you read some prior discussions on this you'll find that in many cases the people operating them are disruptive to the neighborhood and really aggressive towards anybody who dares complain about it. So it gets escalated to the city and eventually they clamp down. As they should.
  - aden1ne 4y ago
    It isn't. Most places in the Netherlands - and definitely in larger cities - are rarely more than 10-minute stroll from any grocery store. Anecdata, but as an example there are four supermarkets within a 10-minute stroll from my place of residence, and about two dozen smaller grocery stores. However, the cities are arguing that dark stores aren't actually stores. You can't buy anything by going to them. The cities argue they are distribution centers. And distribution centers are not typically located in quiet residential areas.
  - aenis 4y ago
    Noise. Trucks, delivery guys having their breaks, and so on. Dutch residential areas are quiet and densely populated, and designed to be comfortable for the residents. Dark stores are about as attractive as neighbours as pubs.
SilverBirch 4y ago
I think the interesting thing about these start ups is how ambitious they are. The promise is always a nonsensical "You can have anything you want from anywhere you want, faster than is reasonably possible". I'm surprised that there isn't a bigger focus on the actual technical limitations of what is possible. By making your offering "You can have anything" you draw in a load of customers who are ordering things that actually aren't that urgent, and therefore they have extreme price elasticity, whilst also making the problem you're solving the most expansive version of the problem possible. The second you start charging for the fast delivery they're just going to go elsewhere. You're just acquiring really shitty customers. The thing to learn from is Amazon, Amazon don't make money on delivery, it was a differentiator to attract customers to their shop which makes money, and it was built on top of a difficult but possible technical problem - building a much more efficient warehouse. In my view, there's only 1 area where people will pay a premium for time, and that's food delivery, and everything else people will settle for a longer wait (really, we're talking here 15mins vs 24 hours). The smart thing to do maybe is to find a way to utilize the non-peak hours of the food delivery companies to do grocery delivery in a less time-sensitive, but cheaper way.
- rmbyrro 4y ago
  Now logistics have not only a "last mile" problem, but also a "last hour" problem to deal with...
- amelius 4y ago
  > I think the interesting thing about these start ups is how ambitious they are. They have to, to satisfy investors. Investors have declared rapid delivery to be a winner-takes-all market, where the winner captures the customers through an app (customers can only have so many apps on their phone, and prefer to use a single app for their rapid delivery needs). So rapid growth is the only option. Grow or die. That's why we see so many of these startups going down.
  - Ekaros 4y ago
    I really doubt that take. Then again I'm extremely price sensitive customer... And will always look at cheapest option or even pass if the delivery is a few euros more... And I can't be only one.
turbinerneiter 4y ago
I never understood the rapid part of it. I either need something really quick, or I can wait. If I need something really quick, they basically need to be very close to me. If they are close to me, I can be just as quick myself. These service only work in dense urban areas. I have 3 supermarkets in 5 minute walking distance. The non-rapid delivery service in the other hand is a godsend - that's how I got me food when I had COVID. And I guess there are a lot of people sick, injured, old or somewhat indisposed for which this service can be a real life saver. In these situations, I'm also happy to pay for this kind of service. The rapid delivery part of it always made me feel bad for the delivery people. One time I happened to wait for the delivery on the stairs, he took 15 minute instead if 10 minutes, I was enjoying the sun in the meantime. He apologized for being late and was really stressed about it.
- lm28469 4y ago
  I think they're trying to rewire teen/young adults brain to reach for them before even thinking to step out. Kind of like food delivery companies do/did. I know people who get pizza delivered from literally 50 meters from their front door. Or buy basic pasta with tomato sauce/cheese for 15 euros when you can do the same thing at home for 15% of the price and 15% of the time
  - 55555 4y ago
    I can confirm this happens. I used to cook, but even when I didn’t cook I would make a simple sandwich or pasta sometimes. But a huge number of people have forgotten how easy it is to prepare something simple since they became reliant on these apps.
  - aeyes 4y ago
    Don't forget that it literally buys you time. Even if the pizza place is 50m from your door, you still have to put on clothes, wait in line to order and then wait for the pizza to be ready. Delivery on the other hand takes 1 minute out of your day. If you have kids, time is worth a lot. Pizza is simple enough that you can easily make it at home and it would probably be better and cheaper than delivery chain quality. But this will take even more time.
deleted 4y ago
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cosmodisk 4y ago
All those platforms sound nice when you are on the receiving end of things and not the one delivering. I used to go to a local McDonald's in London once in a while and when you see 15 Deliveroo guys queuing up with helmets, completely exhausted and miserable, then you realise the cost of that burger being delivered whilst you sit on a sofa. Or Amazon prime delivery, where the guy has to do so many drop offs that he literally runs from the van to your apartment...
- jeffwask 4y ago
  This is the big issue. All of these "businesses" ignore the human cost and just assume an exploitable population begging to not lose their housing. This is a problem that exists all the way through the product lifecycle with these services and leads to GrubHub offering free lunches in NYC but not telling any restaurants so an already stretched to breaking industry gets slammed with no warning. All these companies are designed around an exit not a viable business.
- rootusrootus 4y ago
  This sounds like a moral concern? Lazy people who want a burger should be required to walk down and get it themselves? I mean, it's not like this is some kind of new thing, where people with money choose to pay other people to do some unpleasant bit of work they themselves don't want to do.
- jillesvangurp 4y ago
  That job is arguably nicer than e.g. flipping the burgers or cleaning the kitchen at that McDonald's. The service industry has a lot of hidden jobs performed by hard working people that just aren't very glamorous. We're in a market with very low unemployment rate: people can choose what they do within some reason. Lots of people are choosing to take gigs like this rather than work as a dishwasher, or waiting tables. IMHO that's basically people voting with their feet. Of course things in the US are a bit worse than in Europe. People have to work multiple jobs there just to pay the rent. That shitty job at McDonald's is not enough. So you have fully employed people that do that that find it necessary to take some gigs on top of that because their regular job just isn't paying enough. That's not the gig economy that caused that; something else was broken there long before that became a thing. Like the lack of a minimum wage, the erosion of the middle class, etc. Things looked pretty grim the last time I visited San Francisco. Abject poverty right next to extreme wealth. Whatever caused that, it's not Uber or delivery companies. Here in Berlin, Uber drivers are just normal taxi drivers. There are a lot of people on bikes delivering stuff and they seem to be OK with that. Seems popular with mostly younger people. And of course Amazon Prime and other deliveries are a huge thing here as well. The gig economy is definitely putting some pressure on the social insurance system and some countries are better than others at forcing these companies to treat their people fairly. Unions certainly don't like it that there people earning money outside of sectors they control. But overall, I think it's a system that could work longer term and not just a fad. We just need to figure out how to get these people insured against the inevitabilities in life: sickness, retirement, and unemployment.
imgabe 4y ago
Who is demanding 15-minute grocery delivery? That's not how people buy groceries. People are accustomed to building up a list over the course of a week and going to the store to buy it on the weekend. This is just not a need anyone has. People have been trying to do this since 1999 with kozmo.com and it's just not worthwhile to pay a human being to hand deliver low value items.
- WesolyKubeczek 4y ago
  I just wanted to say that when I had been alone at home recovering from a surgery, I thought it would be bloody fucking nice to have such a service, even at a premium. I ended up paying a premium anyway — for taxi rides to the supermarket and back anyway. Not to mention how exhausted it had made me.
- bluedino 4y ago
  I run to the store during the week to pick up 3/4 things or whatever I need to make a meal at the last minute. Sounds like a good fit. People that only go to the store every 1 or 2 weeks would be my parents or grandparents.
- cosmodisk 4y ago
  Depends where you live. In many places in Europe people shop for 1/2/3 days only because of the close proximity to the shops.
  - Joe8Bit 4y ago
    This is a really interesting point and it resonates with my experience. When I moved to the US from Europe I was suddenly in a world where people had enormous fridges and freezers and could buy a massive amount of food at a time. They would never have fit in dinky little European apartment before! This is also my experience for folks that live in NY.
    - rsynnott 4y ago
      Large fridges are available here; I think there's a lot more to it than fridge size. I suspect that big fridges are popular in the US because in much of the US shopping is extremely inconvenient, rather than shopping being inconvenient _because big fridges are popular_.
guiriduro 4y ago
Surely the whole point of these delivery unicorns with insanely non-functional economics was always to appear to demonstrate rapid growth in order to bilk the greater fools in the investment market, never to realistically make it in the real world. I confidently predict that when this market squeezes out the greater fools (leaving fewer and more conservative investors), any delivery companies that haven't heavily adjusted their logistics and economics to reality (and still kept enough paying customers to validly continue to exist), will be defunct. Which will be most all of them.
- spaceman_2020 4y ago
  Anecdotally, most of these startups also don’t seem to have a frugal culture. Which is fitting because they came about in an era of easy money. People don’t talk enough about Amazon and its culture of frugality. If Amazon wasn’t a frugal company right from the very get go, I doubt it would have survived the dot com crash.
  - Ekaros 4y ago
    From European perspective it seems massive spending on every level. Losing money on product itself, very high pay, very high head count and so on... But then again I don't just understand software business.
    - spaceman_2020 4y ago
      Yeah, sitting on the sidelines, the headcount seems absurd. I came up when startups were meant to be efficient. Now I hear startups like Better.com that had 10k people? Feel like I'm in opposite land.
- Freak_NL 4y ago
  Isn't this just another race to become the dominant party in any given market? Not to dupe investors, but to burn money until the competition has folded. They want to be the next Uber or Airbnb, and will break laws and regulations to get there. It's easier to negotiate with lawmakers when many consumers find you indispensable. It doesn't seem to work out here though.
grumple 4y ago
The idea is that it should be like pizza delivery. Fast. Clearly, it was achievable by pizza shops and profitable for ages, so what went wrong? I think the answer is that huge numbers of large engineering salaries really need to have a payoff. GoPuff was hiring in my area for years. During that time, I don't think I ever saw substantial changes in their app - which I know was originally designed for cheap by an overseas team in Ukraine or Russia from conversations with their recruiters. Meanwhile they had multiple bugs preventing checkout in their apps - that's the one thing you have to get right if you're selling products. Additionally, they had a poor system of estimating delivery time. Then they were often out of the desired products - you can't run out of your most popular products. Meanwhile they would have drivers lined up for several blocks around their warehouses - such an obvious inefficiency, but they seemingly haven't connected the "drivers are unhappy with waiting" and the "customers are unhappy with waiting", and I suspect they just don't give a shit about driver complaints. On two occasions, I had my order canceled because they couldn't fulfill it in time. I'm a few blocks away from their warehouse and half a mile from their corporate HQ. Yikes. If you can't get it right in your own backyard, how can you get it right anywhere? The past couple years maybe you can blame supply chain issues in part. You could also blame low unemployment and rising wages - raising your highest costs while making it hard to hire and deliver on time. But at least with my local example, there seems to have been near-total stagnation on the tech side for the past 5 years, which you can't have with a fledgling product. As a software engineer, I'd never have let that happen, even if I had to rip the whole damn app apart and rebuild it.
- Finnucane 4y ago
  At least around here delivery is often not that fast. I can usually do the pickup myself in half the time.
  - icedchai 4y ago
    Same here. There is less opportunity for error picking it up yourself.
- marcosdumay 4y ago
  > so what went wrong? Low market diversification with companies competing on price, not quality, and offshoring the kernel of their work. Actually, things went surprisingly well. I expected much worse outcomes.
thematrixturtle 4y ago
> The company still operates in cities like São Paolo, Mexico City, and Bogotá. The article kind of glosses over this, but delivery is much more viable in cities where labor is cheap. Delivery is hugely popular in eg China and South-East Asia, where the few dollars of unsubsidized delivery fees paid by the middle class can actually sum up to a living wage for the poor doing the jobs.
- standardUser 4y ago
  I lived in Colombia for a while and you can use the Rappi app to have anything delivered, usually pretty quickly. They'll even bring you cash (like an ATM) or go to any store and buy a specific thing you ask for. And delivery costs are so incredibly cheap that locals can easily afford it (in the city at least).
- PeterisP 4y ago
  More accurately, this is much more viable in cities with a big wage gap between the lower class and middle class. The upper class uses different services and there's simply not much of them to make a scalable business; but if a middle-class worker earns 10 times more than a poor worker, that means that service jobs will be much more used than in the West. Like, almost no Western doctors, lawyers or engineers afford a chauffeur or a full-time domestic servant, but there are areas of the world where that is quite plausible, just as it was in the West hundred+ years ago with minimum wages that were proportionally much lower than now.
  - ghaff 4y ago
    That's a really good way of putting it. Essentially, there is this whole class of businesses that are fundamentally trying to make services available to (some definition of) middle class consumers who mostly couldn't/wouldn't afford them previously except as an occasional treat or a special case situation. The problem is that technology doesn't make the labor cost cheaper and adds costs of its own.
- tablespoon 4y ago
  > Delivery is hugely popular in eg China and South-East Asia, where the few dollars of unsubsidized delivery fees paid by the middle class can actually sum up to a living wage for the poor doing the jobs. I don't think you're using "living wage" in the same sense as it's typically used in the US. IIRC, those delivery people in China work very long hours to live extremely precariously. They're also often treated extremely unfairly (e.g. having to eat the cost of a failed delivery that was in no way their fault).
cainxinth 4y ago
Archived mirror: https://archive.ph/qjNoG https://archive.ph/qjNoG
TwoFerMaggie 4y ago
In my opinion these are the three things that can't really be all achieved under current technology/infrastructure: cheap delivery, fast delivery, and delivery workers that are not miserable. The illusion of all three being achieved at some point is because they are running at a loss of VC's investment money. Eventually investors will demand profitability, and one of the following happens: fees go up, deliveries get slower, workers become miserable. This is also what bothers me with this new "hire others to run errands for you" industry. These are things you might find bothersome (go out to buy food, buy groceries, etc), but their perceived value as compared to the things you're buying is so incredibly small, that any "fair" compensation for the person doing it would discourage most people from paying for the service in the first place. At its core, the amazement of "wow, the delivery of my groceries is so fast and cheap" is not at the shiny technology that makes it possible, but rather the amazement at "wow, there are people willing to do this for such a small amount of money".
- bombcar 4y ago
  I think you could get all three (the holy trinity) in some cases - but those would be pretty small areas (think: the five-ten minute walkable area around a grocery store - basically the distance you could get a bagger to run something over to you on his break for a fiver if you knew them well). Once you're trying to pay for gas, maintenance, capital expense on a vehicle even if it is scooter, you're going to have to have delivery charges that rival the cost of what is being delivered. Dominos perfected it (though they also depend on "customer tips" to offset the delivery costs for the driver); I'm not sure groceries are a high-enough margin business to sustain it for the long run (outside of perhaps a mile or so around a grocery store).
dzonga 4y ago
I like how the big grocery chains in the UK handle this. you book a 1 hour slot. and get your deliveries delivered in that slot. Tesco drivers are always happy, they don't seem exhausted because I reckon delivery conditions tend to be better compared to the Deliveroo / startup guys. in the US I reckon it's the same with HEB pickup compared to instacart
- seanhandley 4y ago
  It's all getting more integrated i.e. Grocery chains are using companies like Deliveroo/Uber to fulfil orders.
- karaterobot 4y ago
  What you describe above is how Amazon Fresh schedules deliveries too. I know that regular Amazon delivery drivers are notoriously overworked and stressed out; I have no idea whether Amazon Fresh delivery (which seems to be mostly regular people in their own vehicles, rather than liveried Sprinter vans) is a better job. Hope so. But, there may be more to it than just the schedule.
- fatbird 4y ago
  In Canada (well, Vancouver), big box deliveries are handled by scheduling a day and being given a four hour window on that day when the delivery might be made. The actual time is frequently within that window, but often enough not that the selected day (typically a weekend day) is kind of a lowkey on-duty day for you because you have to make sure you’re available to let them in when they could buzz anytime. The system works, but like most systems, it presses against the customer’s annoyance threshold for slack in the system.
deleted 4y ago
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shmatt 4y ago
The thing that caught me was how bad the engineering quality was for these companies. It's laughably easy to get thousands of new customer discounts (usually $20-$30 worth of food each). Other industries seemed to have solved this issue long ago (AWS even has a cloud service if you're completely clueless) This[1] is just one story from Reddit, but I've seen it happen with Gorillas, Getir, and some of the companies that have already shut down [1] https://www.reddit.com/r/GoPuffDrivers/comments/scb23p/fraudulent_code_used_by_customers/ https://www.reddit.com/r/GoPuffDrivers/comments/scb23p/fraud...
- rwmj 4y ago
  As usual, the various priorities are not aligned. The programmers "moved fast and broke things" in order to get the website up quickly. The delivery companies go to their VCs and boast they had thousands of new customers sign up. The VCs can go to their backers and boast of exponential growth curves. The backers are flush with money and desperate for returns and so will fund anything that looks like a growth area. Everyone got what they wanted (for a while).
- spywaregorilla 4y ago
  A lot of these businesses are fine with that transaction. It's not bad engineering for sure. Business is weird when you're goal is to grow instead of make money.
ghaff 4y ago
The problem with a lot of these services, at least in western countries, whether rapid delivery of low profit goods, refrigerated meal kits, laundry pickup and delivery, and for that matter housekeeping, etc. is that most middle class-ish people are not willing to pay what it costs as a percentage of their own income. Some things work on the margins in dense enough areas and other things people will pay for as something of a luxury but for the most part it doesn't work, especially as a VC-scale business with a bunch of expensive engineers and other employees. I consider my not-frequent-enough housekeeper sort of a splurge. I definitely wouldn't have them if I had to be paying the cost of a back-end business as well.
- thr0wawayf00 4y ago
  > most middle class-ish people are not willing to pay what it costs as a percentage of their own income. Especially when the economy starts to studder. I used to rideshare and do food delivery fairly regularly when times were good, but I cut it all out as soon as I started reading about layoffs and I'm sure I'm not the only one.
  - ghaff 4y ago
    A common characteristic of a lot of delivery services--as well as lot of content subscription services, etc.--is that, for most people, they're pretty optional. As you suggest, they're probably among the first things that people will trim if they're looking to cut costs.
- ravel-bar-foo 4y ago
  Another factor to consider is that the economics make more sense in a dense environment. Most Americans are 10~20 minutes (by car) from the nearest pizza, whereas most Koreans are only 5 minutes from the restaurant (by motorbike). The difference in delivery prices is a full order of magnitude. (Food delivery in Seoul adds about $2 to the bill at current exchange rates.)
  - spaceman_2020 4y ago
    But the density of Korean cities also means that the real estate costs of running a dark store are much higher. A 600sqft tiny warehouse space in Atlanta would be substantially cheaper than a similar space in Seoul.
freen 4y ago
It’s like no one remembers Kosmo.com
- jeffbee 4y ago
  And webvan.
- tootie 4y ago
  And Urban Fetch. Yes, I remember very well. I think these delivery startups may become a leading indicator of tech startup bubbles.
obiefernandez 4y ago
Seems to work fine in Mexico City
- bowsamic 4y ago
  Same here in Hamburg, Germany. People seem to love it, but maybe the problems are just invisible to me. I only used it once when I had COVID. I was surprised because some beers were actually cheaper than the supermarket. If you buy 10 you’ll make up the delivery fee while getting the beer cheaper than you would usually. I was surprised that they have a fresh bakery too The only downside was that the milk and bread were going out of date arguably too soon, about 4 days, while in the shop I could easily find ones for 10 or even 15 days

117 points by taubek 4y ago

spaceman_2020 4y ago

Lots of them raised billions here in India. The business model is fundamentally unsound and rests on everyone, investors and founders included, riding that magic fairy tale called “scale” to make money.

dominotw 4y ago

anyone else notice truly horrific driving by prime delivery vans. I almost got ran over by a prime van making a rash right turn without checking the bike lane. Some of my friends have experienced this too here in chicago.

Ekaros 4y ago
Entirely expected. The rate of deliveries they are expected to do is very high. And then there is draconian surveillance involved. Though the later should avoid such cases as you had...

bhouston 4y ago

I think that it is likely these rise again (well maybe as different businesses) as delivery technology improves via more automation across the whole network.

fnordpiglet 4y ago

I still miss Kozmo.

daveoc64 4y ago

I used the Zapp service (https://tryzapp.com/ https://tryzapp.com/) while staying in London last year - it seemed to work OK. The thing I liked the most is that it had real-time stock management, so it could tell you if something was in stock when you place your order, and guarantee that you get everything you ordered. Ordering groceries online from the major supermarkets in the UK can be frustrating, because they simultaneously stop you ordering items they think will be out of stock on your delivery date (regardless of whether that's the case), and they have no idea what will be in stock until the day of the delivery. I think grocery delivery through services like Uber Eats and Deliveroo suffers from the same problem - if your item is out of stock, or the driver can't find it, you won't get it. In terms of the market, there are probably just too many companies trying to do the same or similar things.

__alexs 4y ago
The thing I liked most about Zapp is that they've given me £100 in discounts on £200 worth of shopping. The cost of revenue for all these rapid delivery companies must be insane.
- tecleandor 4y ago
  Wow! VCs trying to destroy the market again... What could go wrong?
xnorswap 4y ago
By far my worst experience of any delivery was a recent deliveroo order. Our household were down with covid and therefore trying our best to isolate while at the same time we were running out of painkillers. All the supermarkets couldn't do same day delivery. Out of desperation we tried deliveroo. Ordered paracetemol, ibuprofen, strepsils and to make up the delivery some comfort food like cake, cokes and a few other essentials like milk, bread. Over half our order was "unavailable". We got none of the painkillers whatsoever, got a different loaf of bread. Only thing that actually arrived correct to order was the cokes. Tried to complain to deliveroo but never got passed the automated bots which gave us a pathetic amount off our "next order" which is useless because I'm never going to order from them again. If it weren't for an introductory offer we'd have ended up spending a vast amount on essentially nothing between the delivery fee and the price gouging that's baked into the quoted prices.
- nice__two 4y ago
  If _one_ bad experience turns you into a lost customer, then this business model purely operates on the happy-path and hopes for the best. I am highly sceptical that the core promise “anything, anytime“ is really what people need: they use it, because it’s possible, not because they want to use it. The alternative to your problem would be asking a friend/relative to do the shopping, using the in-house delivery service or simply make do without. All more secure options than ordering something and not being sure, you’ll actually get it. I say good riddance for this petty excuse of a business!

aden1ne 4y ago

In the Netherlands, these services tried to disrupt the supermarket market by basically ignoring zoning laws. As the externalities dark stores create have been disrupting enough for residents to complain en masse, cities are clamping down hard. Which means that 15-minute delivery promise is increasingly impossible to achieve.

nikanj 4y ago
Why on earth is it illegal to have a grocery store closer than 15 minutes from your home?
- rootusrootus 4y ago
  It's not a grocery store, it's a dark store. I.e. just a small warehouse of food that has delivery drivers coming and going 24 hours a day to make local deliveries faster. If you read some prior discussions on this you'll find that in many cases the people operating them are disruptive to the neighborhood and really aggressive towards anybody who dares complain about it. So it gets escalated to the city and eventually they clamp down. As they should.
- aden1ne 4y ago
  It isn't. Most places in the Netherlands - and definitely in larger cities - are rarely more than 10-minute stroll from any grocery store. Anecdata, but as an example there are four supermarkets within a 10-minute stroll from my place of residence, and about two dozen smaller grocery stores. However, the cities are arguing that dark stores aren't actually stores. You can't buy anything by going to them. The cities argue they are distribution centers. And distribution centers are not typically located in quiet residential areas.
- aenis 4y ago
  Noise. Trucks, delivery guys having their breaks, and so on. Dutch residential areas are quiet and densely populated, and designed to be comfortable for the residents. Dark stores are about as attractive as neighbours as pubs.

SilverBirch 4y ago

I think the interesting thing about these start ups is how ambitious they are. The promise is always a nonsensical "You can have anything you want from anywhere you want, faster than is reasonably possible". I'm surprised that there isn't a bigger focus on the actual technical limitations of what is possible. By making your offering "You can have anything" you draw in a load of customers who are ordering things that actually aren't that urgent, and therefore they have extreme price elasticity, whilst also making the problem you're solving the most expansive version of the problem possible. The second you start charging for the fast delivery they're just going to go elsewhere. You're just acquiring really shitty customers. The thing to learn from is Amazon, Amazon don't make money on delivery, it was a differentiator to attract customers to their shop which makes money, and it was built on top of a difficult but possible technical problem - building a much more efficient warehouse. In my view, there's only 1 area where people will pay a premium for time, and that's food delivery, and everything else people will settle for a longer wait (really, we're talking here 15mins vs 24 hours). The smart thing to do maybe is to find a way to utilize the non-peak hours of the food delivery companies to do grocery delivery in a less time-sensitive, but cheaper way.

rmbyrro 4y ago
Now logistics have not only a "last mile" problem, but also a "last hour" problem to deal with...
amelius 4y ago
> I think the interesting thing about these start ups is how ambitious they are. They have to, to satisfy investors. Investors have declared rapid delivery to be a winner-takes-all market, where the winner captures the customers through an app (customers can only have so many apps on their phone, and prefer to use a single app for their rapid delivery needs). So rapid growth is the only option. Grow or die. That's why we see so many of these startups going down.
- Ekaros 4y ago
  I really doubt that take. Then again I'm extremely price sensitive customer... And will always look at cheapest option or even pass if the delivery is a few euros more... And I can't be only one.

turbinerneiter 4y ago

I never understood the rapid part of it. I either need something really quick, or I can wait. If I need something really quick, they basically need to be very close to me. If they are close to me, I can be just as quick myself. These service only work in dense urban areas. I have 3 supermarkets in 5 minute walking distance. The non-rapid delivery service in the other hand is a godsend - that's how I got me food when I had COVID. And I guess there are a lot of people sick, injured, old or somewhat indisposed for which this service can be a real life saver. In these situations, I'm also happy to pay for this kind of service. The rapid delivery part of it always made me feel bad for the delivery people. One time I happened to wait for the delivery on the stairs, he took 15 minute instead if 10 minutes, I was enjoying the sun in the meantime. He apologized for being late and was really stressed about it.

lm28469 4y ago
I think they're trying to rewire teen/young adults brain to reach for them before even thinking to step out. Kind of like food delivery companies do/did. I know people who get pizza delivered from literally 50 meters from their front door. Or buy basic pasta with tomato sauce/cheese for 15 euros when you can do the same thing at home for 15% of the price and 15% of the time
- 55555 4y ago
  I can confirm this happens. I used to cook, but even when I didn’t cook I would make a simple sandwich or pasta sometimes. But a huge number of people have forgotten how easy it is to prepare something simple since they became reliant on these apps.
- aeyes 4y ago
  Don't forget that it literally buys you time. Even if the pizza place is 50m from your door, you still have to put on clothes, wait in line to order and then wait for the pizza to be ready. Delivery on the other hand takes 1 minute out of your day. If you have kids, time is worth a lot. Pizza is simple enough that you can easily make it at home and it would probably be better and cheaper than delivery chain quality. But this will take even more time.

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cosmodisk 4y ago

All those platforms sound nice when you are on the receiving end of things and not the one delivering. I used to go to a local McDonald's in London once in a while and when you see 15 Deliveroo guys queuing up with helmets, completely exhausted and miserable, then you realise the cost of that burger being delivered whilst you sit on a sofa. Or Amazon prime delivery, where the guy has to do so many drop offs that he literally runs from the van to your apartment...

jeffwask 4y ago
This is the big issue. All of these "businesses" ignore the human cost and just assume an exploitable population begging to not lose their housing. This is a problem that exists all the way through the product lifecycle with these services and leads to GrubHub offering free lunches in NYC but not telling any restaurants so an already stretched to breaking industry gets slammed with no warning. All these companies are designed around an exit not a viable business.
rootusrootus 4y ago
This sounds like a moral concern? Lazy people who want a burger should be required to walk down and get it themselves? I mean, it's not like this is some kind of new thing, where people with money choose to pay other people to do some unpleasant bit of work they themselves don't want to do.
jillesvangurp 4y ago
That job is arguably nicer than e.g. flipping the burgers or cleaning the kitchen at that McDonald's. The service industry has a lot of hidden jobs performed by hard working people that just aren't very glamorous. We're in a market with very low unemployment rate: people can choose what they do within some reason. Lots of people are choosing to take gigs like this rather than work as a dishwasher, or waiting tables. IMHO that's basically people voting with their feet. Of course things in the US are a bit worse than in Europe. People have to work multiple jobs there just to pay the rent. That shitty job at McDonald's is not enough. So you have fully employed people that do that that find it necessary to take some gigs on top of that because their regular job just isn't paying enough. That's not the gig economy that caused that; something else was broken there long before that became a thing. Like the lack of a minimum wage, the erosion of the middle class, etc. Things looked pretty grim the last time I visited San Francisco. Abject poverty right next to extreme wealth. Whatever caused that, it's not Uber or delivery companies. Here in Berlin, Uber drivers are just normal taxi drivers. There are a lot of people on bikes delivering stuff and they seem to be OK with that. Seems popular with mostly younger people. And of course Amazon Prime and other deliveries are a huge thing here as well. The gig economy is definitely putting some pressure on the social insurance system and some countries are better than others at forcing these companies to treat their people fairly. Unions certainly don't like it that there people earning money outside of sectors they control. But overall, I think it's a system that could work longer term and not just a fad. We just need to figure out how to get these people insured against the inevitabilities in life: sickness, retirement, and unemployment.

imgabe 4y ago

Who is demanding 15-minute grocery delivery? That's not how people buy groceries. People are accustomed to building up a list over the course of a week and going to the store to buy it on the weekend. This is just not a need anyone has. People have been trying to do this since 1999 with kozmo.com and it's just not worthwhile to pay a human being to hand deliver low value items.

WesolyKubeczek 4y ago
I just wanted to say that when I had been alone at home recovering from a surgery, I thought it would be bloody fucking nice to have such a service, even at a premium. I ended up paying a premium anyway — for taxi rides to the supermarket and back anyway. Not to mention how exhausted it had made me.
bluedino 4y ago
I run to the store during the week to pick up 3/4 things or whatever I need to make a meal at the last minute. Sounds like a good fit. People that only go to the store every 1 or 2 weeks would be my parents or grandparents.
cosmodisk 4y ago
Depends where you live. In many places in Europe people shop for 1/2/3 days only because of the close proximity to the shops.
- Joe8Bit 4y ago
  This is a really interesting point and it resonates with my experience. When I moved to the US from Europe I was suddenly in a world where people had enormous fridges and freezers and could buy a massive amount of food at a time. They would never have fit in dinky little European apartment before! This is also my experience for folks that live in NY.
  - rsynnott 4y ago
    Large fridges are available here; I think there's a lot more to it than fridge size. I suspect that big fridges are popular in the US because in much of the US shopping is extremely inconvenient, rather than shopping being inconvenient _because big fridges are popular_.

guiriduro 4y ago

Surely the whole point of these delivery unicorns with insanely non-functional economics was always to appear to demonstrate rapid growth in order to bilk the greater fools in the investment market, never to realistically make it in the real world. I confidently predict that when this market squeezes out the greater fools (leaving fewer and more conservative investors), any delivery companies that haven't heavily adjusted their logistics and economics to reality (and still kept enough paying customers to validly continue to exist), will be defunct. Which will be most all of them.

spaceman_2020 4y ago
Anecdotally, most of these startups also don’t seem to have a frugal culture. Which is fitting because they came about in an era of easy money. People don’t talk enough about Amazon and its culture of frugality. If Amazon wasn’t a frugal company right from the very get go, I doubt it would have survived the dot com crash.
- Ekaros 4y ago
  From European perspective it seems massive spending on every level. Losing money on product itself, very high pay, very high head count and so on... But then again I don't just understand software business.
  - spaceman_2020 4y ago
    Yeah, sitting on the sidelines, the headcount seems absurd. I came up when startups were meant to be efficient. Now I hear startups like Better.com that had 10k people? Feel like I'm in opposite land.
Freak_NL 4y ago
Isn't this just another race to become the dominant party in any given market? Not to dupe investors, but to burn money until the competition has folded. They want to be the next Uber or Airbnb, and will break laws and regulations to get there. It's easier to negotiate with lawmakers when many consumers find you indispensable. It doesn't seem to work out here though.

grumple 4y ago

The idea is that it should be like pizza delivery. Fast. Clearly, it was achievable by pizza shops and profitable for ages, so what went wrong? I think the answer is that huge numbers of large engineering salaries really need to have a payoff. GoPuff was hiring in my area for years. During that time, I don't think I ever saw substantial changes in their app - which I know was originally designed for cheap by an overseas team in Ukraine or Russia from conversations with their recruiters. Meanwhile they had multiple bugs preventing checkout in their apps - that's the one thing you have to get right if you're selling products. Additionally, they had a poor system of estimating delivery time. Then they were often out of the desired products - you can't run out of your most popular products. Meanwhile they would have drivers lined up for several blocks around their warehouses - such an obvious inefficiency, but they seemingly haven't connected the "drivers are unhappy with waiting" and the "customers are unhappy with waiting", and I suspect they just don't give a shit about driver complaints. On two occasions, I had my order canceled because they couldn't fulfill it in time. I'm a few blocks away from their warehouse and half a mile from their corporate HQ. Yikes. If you can't get it right in your own backyard, how can you get it right anywhere? The past couple years maybe you can blame supply chain issues in part. You could also blame low unemployment and rising wages - raising your highest costs while making it hard to hire and deliver on time. But at least with my local example, there seems to have been near-total stagnation on the tech side for the past 5 years, which you can't have with a fledgling product. As a software engineer, I'd never have let that happen, even if I had to rip the whole damn app apart and rebuild it.

Finnucane 4y ago
At least around here delivery is often not that fast. I can usually do the pickup myself in half the time.
- icedchai 4y ago
  Same here. There is less opportunity for error picking it up yourself.
marcosdumay 4y ago
> so what went wrong? Low market diversification with companies competing on price, not quality, and offshoring the kernel of their work. Actually, things went surprisingly well. I expected much worse outcomes.

thematrixturtle 4y ago

> The company still operates in cities like São Paolo, Mexico City, and Bogotá. The article kind of glosses over this, but delivery is much more viable in cities where labor is cheap. Delivery is hugely popular in eg China and South-East Asia, where the few dollars of unsubsidized delivery fees paid by the middle class can actually sum up to a living wage for the poor doing the jobs.

standardUser 4y ago
I lived in Colombia for a while and you can use the Rappi app to have anything delivered, usually pretty quickly. They'll even bring you cash (like an ATM) or go to any store and buy a specific thing you ask for. And delivery costs are so incredibly cheap that locals can easily afford it (in the city at least).
PeterisP 4y ago
More accurately, this is much more viable in cities with a big wage gap between the lower class and middle class. The upper class uses different services and there's simply not much of them to make a scalable business; but if a middle-class worker earns 10 times more than a poor worker, that means that service jobs will be much more used than in the West. Like, almost no Western doctors, lawyers or engineers afford a chauffeur or a full-time domestic servant, but there are areas of the world where that is quite plausible, just as it was in the West hundred+ years ago with minimum wages that were proportionally much lower than now.
- ghaff 4y ago
  That's a really good way of putting it. Essentially, there is this whole class of businesses that are fundamentally trying to make services available to (some definition of) middle class consumers who mostly couldn't/wouldn't afford them previously except as an occasional treat or a special case situation. The problem is that technology doesn't make the labor cost cheaper and adds costs of its own.
tablespoon 4y ago
> Delivery is hugely popular in eg China and South-East Asia, where the few dollars of unsubsidized delivery fees paid by the middle class can actually sum up to a living wage for the poor doing the jobs. I don't think you're using "living wage" in the same sense as it's typically used in the US. IIRC, those delivery people in China work very long hours to live extremely precariously. They're also often treated extremely unfairly (e.g. having to eat the cost of a failed delivery that was in no way their fault).

cainxinth 4y ago

Archived mirror: https://archive.ph/qjNoG https://archive.ph/qjNoG

TwoFerMaggie 4y ago

In my opinion these are the three things that can't really be all achieved under current technology/infrastructure: cheap delivery, fast delivery, and delivery workers that are not miserable. The illusion of all three being achieved at some point is because they are running at a loss of VC's investment money. Eventually investors will demand profitability, and one of the following happens: fees go up, deliveries get slower, workers become miserable. This is also what bothers me with this new "hire others to run errands for you" industry. These are things you might find bothersome (go out to buy food, buy groceries, etc), but their perceived value as compared to the things you're buying is so incredibly small, that any "fair" compensation for the person doing it would discourage most people from paying for the service in the first place. At its core, the amazement of "wow, the delivery of my groceries is so fast and cheap" is not at the shiny technology that makes it possible, but rather the amazement at "wow, there are people willing to do this for such a small amount of money".

bombcar 4y ago
I think you could get all three (the holy trinity) in some cases - but those would be pretty small areas (think: the five-ten minute walkable area around a grocery store - basically the distance you could get a bagger to run something over to you on his break for a fiver if you knew them well). Once you're trying to pay for gas, maintenance, capital expense on a vehicle even if it is scooter, you're going to have to have delivery charges that rival the cost of what is being delivered. Dominos perfected it (though they also depend on "customer tips" to offset the delivery costs for the driver); I'm not sure groceries are a high-enough margin business to sustain it for the long run (outside of perhaps a mile or so around a grocery store).

dzonga 4y ago

I like how the big grocery chains in the UK handle this. you book a 1 hour slot. and get your deliveries delivered in that slot. Tesco drivers are always happy, they don't seem exhausted because I reckon delivery conditions tend to be better compared to the Deliveroo / startup guys. in the US I reckon it's the same with HEB pickup compared to instacart

seanhandley 4y ago
It's all getting more integrated i.e. Grocery chains are using companies like Deliveroo/Uber to fulfil orders.
karaterobot 4y ago
What you describe above is how Amazon Fresh schedules deliveries too. I know that regular Amazon delivery drivers are notoriously overworked and stressed out; I have no idea whether Amazon Fresh delivery (which seems to be mostly regular people in their own vehicles, rather than liveried Sprinter vans) is a better job. Hope so. But, there may be more to it than just the schedule.
fatbird 4y ago
In Canada (well, Vancouver), big box deliveries are handled by scheduling a day and being given a four hour window on that day when the delivery might be made. The actual time is frequently within that window, but often enough not that the selected day (typically a weekend day) is kind of a lowkey on-duty day for you because you have to make sure you’re available to let them in when they could buzz anytime. The system works, but like most systems, it presses against the customer’s annoyance threshold for slack in the system.

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shmatt 4y ago

The thing that caught me was how bad the engineering quality was for these companies. It's laughably easy to get thousands of new customer discounts (usually $20-$30 worth of food each). Other industries seemed to have solved this issue long ago (AWS even has a cloud service if you're completely clueless) This[1] is just one story from Reddit, but I've seen it happen with Gorillas, Getir, and some of the companies that have already shut down [1] https://www.reddit.com/r/GoPuffDrivers/comments/scb23p/fraudulent_code_used_by_customers/ https://www.reddit.com/r/GoPuffDrivers/comments/scb23p/fraud...

rwmj 4y ago
As usual, the various priorities are not aligned. The programmers "moved fast and broke things" in order to get the website up quickly. The delivery companies go to their VCs and boast they had thousands of new customers sign up. The VCs can go to their backers and boast of exponential growth curves. The backers are flush with money and desperate for returns and so will fund anything that looks like a growth area. Everyone got what they wanted (for a while).
spywaregorilla 4y ago
A lot of these businesses are fine with that transaction. It's not bad engineering for sure. Business is weird when you're goal is to grow instead of make money.

ghaff 4y ago

The problem with a lot of these services, at least in western countries, whether rapid delivery of low profit goods, refrigerated meal kits, laundry pickup and delivery, and for that matter housekeeping, etc. is that most middle class-ish people are not willing to pay what it costs as a percentage of their own income. Some things work on the margins in dense enough areas and other things people will pay for as something of a luxury but for the most part it doesn't work, especially as a VC-scale business with a bunch of expensive engineers and other employees. I consider my not-frequent-enough housekeeper sort of a splurge. I definitely wouldn't have them if I had to be paying the cost of a back-end business as well.

thr0wawayf00 4y ago
> most middle class-ish people are not willing to pay what it costs as a percentage of their own income. Especially when the economy starts to studder. I used to rideshare and do food delivery fairly regularly when times were good, but I cut it all out as soon as I started reading about layoffs and I'm sure I'm not the only one.
- ghaff 4y ago
  A common characteristic of a lot of delivery services--as well as lot of content subscription services, etc.--is that, for most people, they're pretty optional. As you suggest, they're probably among the first things that people will trim if they're looking to cut costs.
ravel-bar-foo 4y ago
Another factor to consider is that the economics make more sense in a dense environment. Most Americans are 10~20 minutes (by car) from the nearest pizza, whereas most Koreans are only 5 minutes from the restaurant (by motorbike). The difference in delivery prices is a full order of magnitude. (Food delivery in Seoul adds about $2 to the bill at current exchange rates.)
- spaceman_2020 4y ago
  But the density of Korean cities also means that the real estate costs of running a dark store are much higher. A 600sqft tiny warehouse space in Atlanta would be substantially cheaper than a similar space in Seoul.

freen 4y ago

It’s like no one remembers Kosmo.com

jeffbee 4y ago
And webvan.
tootie 4y ago
And Urban Fetch. Yes, I remember very well. I think these delivery startups may become a leading indicator of tech startup bubbles.

obiefernandez 4y ago

Seems to work fine in Mexico City

bowsamic 4y ago
Same here in Hamburg, Germany. People seem to love it, but maybe the problems are just invisible to me. I only used it once when I had COVID. I was surprised because some beers were actually cheaper than the supermarket. If you buy 10 you’ll make up the delivery fee while getting the beer cheaper than you would usually. I was surprised that they have a fresh bakery too The only downside was that the milk and bread were going out of date arguably too soon, about 4 days, while in the shop I could easily find ones for 10 or even 15 days