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I'm not sure COVID is a root cause rather than a convenient occasion. The free market is supposed to work through scale and optimization; scale is still a rele
by _cenw 4y ago
I'm not sure COVID is a root cause rather than a convenient occasion.
The free market is supposed to work through scale and optimization; scale is still a relevant force, but mostly serves market consolidation. Optimization is not something that can be frequently innovated on. So everyone has pretty much the same cost basis in long established industries like food.
There is simply no incentive for these corporations to start a price war; they all know starting one will only result in a very brief competitive advantage until everyone returns to baseline profits.
Funnily enough, a lot of recent reductions in cost basis in "innovative" startups is not done through optimization; it is done through VC speculating on their competitor finding a more permanent place in a (supposedly) new market after consolidation and prices adjust back to reality. An example I can come up with of this is food delivery services in Germany: For a while, several providers were undercutting each other in price and service level. Now all of Germany is dominated by Takeaway, and their service level is slightly above "we don't care". We'll see the same in instant grocery delivery in a year or so. Getir seems to be winning that one. Until then, enjoy ridiculously cheap instant grocery delivery, powered by VC funding and extra dirty worker exploitation (only one of those will continue to exist).