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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’
by 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 agoThe 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.