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The on-demand deliver-anything business model just isn't sustainable. You can only have it when it's propped up by some combination of temporary subsidy (i.e.,

The on-demand deliver-anything business model just isn't sustainable. You can only have it when it's propped up by some combination of temporary subsidy (i.e., VC funding), price obfuscation (e.g., markups, fees, and tips), and shifting the costs and risks to drivers. DoorDash et al. aren't innovators in anything other than creative contracting and marketing. There's no magic practical efficiency that makes their business work.

snapplebobapple 2y ago
I dont agree. Their innovation was stitching a whole swath of the cheapest and least reliable labor (part timers with a pulse who have an hour or two to kill) into a fairly reliable system. Leguslated higher wages destroys that innovation and highlights just how price sensitive the delivery demand is. It can never be a career at volume.
- Larrikin 2y ago
  Door Dash was unable to make a profit during a time period where restaurants weren't allowed to have indoor dining and most people were locked in their homes for a year. This was before drivers and law makers began realizing that with car wear and tear they were getting less than minimum wage.
  - gruez 2y ago
    >drivers and law makers began realizing that with car wear and tear they were getting less than minimum wage. Source? At least according to this study[1] 92% of uber/lyft drivers in seattle made above minimum wage. True, this isn't exactly the same as for delivery workers, but given how fungible the two jobs are I think it's fair to treat them as approximately the same. Much more interesting is how much your earnings vary depending on your assumptions. The study calculated $17.40/hr by using pessimistic assumptions, and $23.25/hr using optimistic assumptions. [1] https://ecommons.cornell.edu/items/161915a8-b0b8-4dc4-b5ff-d3e7b9012089 https://ecommons.cornell.edu/items/161915a8-b0b8-4dc4-b5ff-d...
ssl-3 2y ago
I've seen it be self-sustained in small-town middle America, where a fairly loose-knit bunch of folks work together to make it work. It just doesn't seem to scale globally very well without a continuous cash injection.
Retric 2y ago
Arguably they make sense in terms of a wealth gap. There’s a fairly long history of such services operating at small scale for the 1% that can’s afford full time servants but can pay for 10% of one by using housecleaning services and someone pickup their food etc. Where this falls down is trying to scale the business to less affluent people without some serious limitations. Pizza delivery places for example generally have a small delivery radius which makes a huge difference.
- cassianoleal 2y ago
  I don't know how DoorDash and other similar services work in the US, but Deliveroo in the UK is always local - bike riders rarely take any longer than 10-15min between the restaurants and my place. All restaurants I can order from are within walkable distance (30-45min tops on foot).
gotoeleven 2y ago
It seemed to be sustained until the government required that wages be increased, then it was not sustained. Was there some temporary subsidy or other artificial force propping it up? Do you mean welfare? It's illogical to say a business is not sustainable because it dies after its been kneecapped by regulation.
- foinker 2y ago
  The artificial force is almost always VC funding
- Brian_K_White 2y ago
  It never "seemed to be sustained". It was always and obviously an artificial result of vc funding designed to get a market going and obscure the economics until it's established enough that they can get away with changing the deal like uber. It's illogical to ignore the size of the market and think that there should somehow be a need for just any number of drivers instead of the required number of drivers. It's illogical to ignore that when prices to customers are artificially low, customers will consume more than when they actually have to pay for what they consume. Since the driver pool has been paid for by vc funding rather than consumers, there are more drivers than needed. A smaller number of drivers is perfectly sustainable.
readthenotes1 2y ago
I guess the "temporary subsidy" in Columbia for Rappi etc is all the Venezuelan refugees...
TulliusCicero 2y ago
I think it's sustainable, it's just that the potential market isn't that big (because prices will have to be fairly high for it to be sustainable).

snapplebobapple 2y ago

I dont agree. Their innovation was stitching a whole swath of the cheapest and least reliable labor (part timers with a pulse who have an hour or two to kill) into a fairly reliable system. Leguslated higher wages destroys that innovation and highlights just how price sensitive the delivery demand is. It can never be a career at volume.

Larrikin 2y ago
Door Dash was unable to make a profit during a time period where restaurants weren't allowed to have indoor dining and most people were locked in their homes for a year. This was before drivers and law makers began realizing that with car wear and tear they were getting less than minimum wage.
- gruez 2y ago
  >drivers and law makers began realizing that with car wear and tear they were getting less than minimum wage. Source? At least according to this study[1] 92% of uber/lyft drivers in seattle made above minimum wage. True, this isn't exactly the same as for delivery workers, but given how fungible the two jobs are I think it's fair to treat them as approximately the same. Much more interesting is how much your earnings vary depending on your assumptions. The study calculated $17.40/hr by using pessimistic assumptions, and $23.25/hr using optimistic assumptions. [1] https://ecommons.cornell.edu/items/161915a8-b0b8-4dc4-b5ff-d3e7b9012089 https://ecommons.cornell.edu/items/161915a8-b0b8-4dc4-b5ff-d...

ssl-3 2y ago

I've seen it be self-sustained in small-town middle America, where a fairly loose-knit bunch of folks work together to make it work. It just doesn't seem to scale globally very well without a continuous cash injection.

Retric 2y ago

Arguably they make sense in terms of a wealth gap. There’s a fairly long history of such services operating at small scale for the 1% that can’s afford full time servants but can pay for 10% of one by using housecleaning services and someone pickup their food etc. Where this falls down is trying to scale the business to less affluent people without some serious limitations. Pizza delivery places for example generally have a small delivery radius which makes a huge difference.

cassianoleal 2y ago
I don't know how DoorDash and other similar services work in the US, but Deliveroo in the UK is always local - bike riders rarely take any longer than 10-15min between the restaurants and my place. All restaurants I can order from are within walkable distance (30-45min tops on foot).

gotoeleven 2y ago

It seemed to be sustained until the government required that wages be increased, then it was not sustained. Was there some temporary subsidy or other artificial force propping it up? Do you mean welfare? It's illogical to say a business is not sustainable because it dies after its been kneecapped by regulation.

foinker 2y ago
The artificial force is almost always VC funding
Brian_K_White 2y ago
It never "seemed to be sustained". It was always and obviously an artificial result of vc funding designed to get a market going and obscure the economics until it's established enough that they can get away with changing the deal like uber. It's illogical to ignore the size of the market and think that there should somehow be a need for just any number of drivers instead of the required number of drivers. It's illogical to ignore that when prices to customers are artificially low, customers will consume more than when they actually have to pay for what they consume. Since the driver pool has been paid for by vc funding rather than consumers, there are more drivers than needed. A smaller number of drivers is perfectly sustainable.

readthenotes1 2y ago

I guess the "temporary subsidy" in Columbia for Rappi etc is all the Venezuelan refugees...

TulliusCicero 2y ago

I think it's sustainable, it's just that the potential market isn't that big (because prices will have to be fairly high for it to be sustainable).