Also as a separate point, I worked for an on-demand food startup, and I remember our founders talking about a local entrepreneur they knew who rented a single commissary, was operating white labeled brands on the delivery platforms, and was highly profitable.
Almost makes me think the delivery platforms could have a Shopify-type effect for traditional restaurateurs and it will be interesting to see the business models that unfold as a result.
https://www.nytimes.com/2017/09/23/technology/ubereats-food-...
I noticed today that the people who used to hand out $20 off your first Uber Eats coupons in my town are now down to $15... presumably part of this process.
In Q3 Eats EBITDA was negative $315m while Rides was positive $630m.
Your point about VC money propping it up is right on. We saw this happen with box/meal kit companies that couldn't achieve realistic unit economics in the food supply chain and instead were paying for customer acquisition in the form of free meals. Most have folded but some are still dying on the vine.
Doordash & co have raised millions of investor money which not only do they have to pay back but also provide unrealistic returns, which isn't really possible with such a physical service where expenses and profits scale mostly linearly (see WeWork which promised tech-company-style returns despite being a physical business and how it all ended).
I am curious if this will really work long them, but I'm actually somewhat optimistic that there will be enough momentum to keep the industry around until its successor arrives.