4 ms·

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 g

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.
- asdajksah2123 4y ago
  Yet, neither do Uber nor AirBnB make money. So it's still entirely based on a greater fool theory of economics.
  - HWR_14 4y ago
    I don't understand how neither of them can make money anymore. When they were offering rides at a loss to build market share I understood how Uber could lose money. But now how can the cut they take from every ride not cover expenses?
    - spaceman_2020 4y ago
      Because the rides are legitimately becoming too expensive to attract a large volume of riders. As volume disappears, drivers start leaving the app - no fun being logged in all day and getting no rides. If drivers start leaving the app, Uber has to incentivize them, eating into the company’s margin. Essentially, the real, unsubsidized market for on-demand chauffeured rides is much smaller than anyone anticipated.
      - ghaff 4y ago
        >Essentially, the real, unsubsidized market for on-demand chauffeured rides is much smaller than anyone anticipated. It seemed probable that Uber pricing would approach taxi pricing. Which seems to have largely happened. And while Uber was arguably a better experience than cabs in many cities, it's not clear that just a better experience would cause a lot more usage at the same price.
        spaceman_2020 4y ago
        The "better experience" argument rests on a false premise - that everyone has the money; they never spent it on cabs earlier because it wasn't easily accessible. This kind of thinking is pervasive among tech startups now, and much of it is deeply embedded among startups founded by financially well-off, living-in-SF folks. The idea that the vast majority of people don't really have enough money to afford fair price cabs (or food delivery or consumer good) seems to be lost on 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.

asdajksah2123 4y ago
Yet, neither do Uber nor AirBnB make money. So it's still entirely based on a greater fool theory of economics.
- HWR_14 4y ago
  I don't understand how neither of them can make money anymore. When they were offering rides at a loss to build market share I understood how Uber could lose money. But now how can the cut they take from every ride not cover expenses?
  - spaceman_2020 4y ago
    Because the rides are legitimately becoming too expensive to attract a large volume of riders. As volume disappears, drivers start leaving the app - no fun being logged in all day and getting no rides. If drivers start leaving the app, Uber has to incentivize them, eating into the company’s margin. Essentially, the real, unsubsidized market for on-demand chauffeured rides is much smaller than anyone anticipated.
    - ghaff 4y ago
      >Essentially, the real, unsubsidized market for on-demand chauffeured rides is much smaller than anyone anticipated. It seemed probable that Uber pricing would approach taxi pricing. Which seems to have largely happened. And while Uber was arguably a better experience than cabs in many cities, it's not clear that just a better experience would cause a lot more usage at the same price.
      - spaceman_2020 4y ago
        The "better experience" argument rests on a false premise - that everyone has the money; they never spent it on cabs earlier because it wasn't easily accessible. This kind of thinking is pervasive among tech startups now, and much of it is deeply embedded among startups founded by financially well-off, living-in-SF folks. The idea that the vast majority of people don't really have enough money to afford fair price cabs (or food delivery or consumer good) seems to be lost on them.