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It is likely that none of the remaining services is actually capable of making a real profit either. These restaurant-delivery services offer(ed) a convenient

It is likely that none of the remaining services is actually capable of making a real profit either. These restaurant-delivery services offer(ed) a convenient way to get your restaurant takeaway delivered initially for surprisingly-not-that-much-more money than going by yourself But they work by charging the restaurants very high fees plus the fees the customer pays. Even with all of those fees, because there is no coordination with the restaurants themselves (to batch up multiple orders from the same restaurant like happens when a restaurant runs it's own delivery), it ends up being only viable for each delivery ride to take about two meals -- the algorithms try to create a path of "pickup A, pickup B, dropoff A, pickup C, dropoff B, ..." in an effort to mix efficiency with acceptable food temperature upon delivery -- but even with that pattern, many items get delivered cold or delayed and two orders per trip just doesn't create enough margin to pay both the driver and the large high-paid software engineering staff behind the app. In a world without continuous capital injection, these companies have an unworkable business model (I mean, they were always unworkable, but in VC-unicorn-world, they could pretend for surprisingly long). edit: also, if any health regulator ever decides to look in to food temperature upon delivery for these companies, all hell will break loose in the business -- there is no way that the average dish reaches the customer at a legally food safe temperature.

alxmng 4y ago
I’d like to add that they also don’t have economy of scale. Unit economics are the same no matter how many drivers and orders you process. If the economics don’t work now, why would they ever work?
- hakfoo 4y ago
  The arguments I could see revolve around creating some sort of moat. There's an extremely shallow one in "I already have A on my phone, it would be three minutes of clicking and enterring my payment and delivery info to try someone else." If you could give-away-the-store to get sufficient market share-- maybe like 70-80% or more-- you might be able to start leveraging the restaurants, demanding exclusivity (or offering some cross-promotional incentive in exchange for it) to keep competitors from emerging. Or maybe this was an offshoot of the Uber endgame hypothesis: if you can survive long enough to get to driverless vehicles, you can own the largest fleet and actually get your hands on economies of scale.
MikePlacid 4y ago
> get delivered cold or delayed I was using Seamless in SF Bay Area and these parameters were actually rather good. Especially if a restaurant took care of delivery itself (some did, mostly Chinese). But I was always checking the distance.
pseudo0 4y ago
Restaurant delivery is a $40 billion market in the US alone [0], that seems like plenty of revenue to sustain a software dev team. The issue right now is that there are 3+ players in each market, each shovelling VC money into promotions, discounts and branding in the hopes of being the dominant player. Eventually the weaker companies will tap out, as we are seeing now with Deliveroo. This era of easy money slowed down this process, but my guess is that in this current tech downturn we will see consolidation in the delivery and ride-sharing spaces, followed by an emphasis on profits over market share. [0] - https://www.statista.com/topics/3294/online-food-delivery-services-in-the-us/#topicOverview https://www.statista.com/topics/3294/online-food-delivery-se...
- deleted 4y ago
  [deleted]

alxmng 4y ago

I’d like to add that they also don’t have economy of scale. Unit economics are the same no matter how many drivers and orders you process. If the economics don’t work now, why would they ever work?

hakfoo 4y ago
The arguments I could see revolve around creating some sort of moat. There's an extremely shallow one in "I already have A on my phone, it would be three minutes of clicking and enterring my payment and delivery info to try someone else." If you could give-away-the-store to get sufficient market share-- maybe like 70-80% or more-- you might be able to start leveraging the restaurants, demanding exclusivity (or offering some cross-promotional incentive in exchange for it) to keep competitors from emerging. Or maybe this was an offshoot of the Uber endgame hypothesis: if you can survive long enough to get to driverless vehicles, you can own the largest fleet and actually get your hands on economies of scale.

MikePlacid 4y ago

> get delivered cold or delayed I was using Seamless in SF Bay Area and these parameters were actually rather good. Especially if a restaurant took care of delivery itself (some did, mostly Chinese). But I was always checking the distance.

pseudo0 4y ago

Restaurant delivery is a $40 billion market in the US alone [0], that seems like plenty of revenue to sustain a software dev team. The issue right now is that there are 3+ players in each market, each shovelling VC money into promotions, discounts and branding in the hopes of being the dominant player. Eventually the weaker companies will tap out, as we are seeing now with Deliveroo. This era of easy money slowed down this process, but my guess is that in this current tech downturn we will see consolidation in the delivery and ride-sharing spaces, followed by an emphasis on profits over market share. [0] - https://www.statista.com/topics/3294/online-food-delivery-services-in-the-us/#topicOverview https://www.statista.com/topics/3294/online-food-delivery-se...

deleted 4y ago
[deleted]