The speedy downfall of rapid delivery startups | Hacker News Reader

The speedy downfall of rapid delivery startups

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117 pointstaubek204 comments

I think the interesting thing about these start ups is how ambitious they are. The promise is always a nonsensical "You can have anything you want from anywhere you want, faster than is reasonably possible". I'm surprised that there isn't a bigger focus on the actual technical limitations of what is possible.

By making your offering "You can have anything" you draw in a load of customers who are ordering things that actually aren't that urgent, and therefore they have extreme price elasticity, whilst also making the problem you're solving the most expansive version of the problem possible. The second you start charging for the fast delivery they're just going to go elsewhere. You're just acquiring really shitty customers.

The thing to learn from is Amazon, Amazon don't make money on delivery, it was a differentiator to attract customers to their shop which makes money, and it was built on top of a difficult but possible technical problem - building a much more efficient warehouse.

In my view, there's only 1 area where people will pay a premium for time, and that's food delivery, and everything else people will settle for a longer wait (really, we're talking here 15mins vs 24 hours). The smart thing to do maybe is to find a way to utilize the non-peak hours of the food delivery companies to do grocery delivery in a less time-sensitive, but cheaper way.

Delivery networks operate most efficiently with a mix of priorities of goods. That way, every time a truck moves, it is guaranteed to be full.

These apps seem to be trying to build a network of only high priority goods, which will never work. Their vehicles and workers spend most of their time moving with just a few items for just one customer. There's no way to make that cheap.

>> Their vehicles and workers spend most of their time moving with just a few items for just one customer.

This was the main reason many delivery apps/startups went under during the first dot com crash. Lots of VC money floating around with too little common sense. I'm puzzled why companies think "Oh no, WE can make this work now!" and are trying pretty much the same thing.

I thought we all learned this wasn't a profitable business model some 20 years ago?

Additionally, these startups play the good old game of "who has enough cash to stay afloat the longest" against each other since none have any technological or logistical advantages

It can be 'cheap' in places with very high inequality and slack labour.

So for the upper 5% of Sao Paulo, this might fly.

A lot of places like that.

Sure, there are probably pockets in the Bay Area and NYC where this would make sense as well, but then you wouldn't get multi-billion dollar fundraises and decaunicorn status.

Right. Certainly there are pockets where a fair number of people are willing and able to spend thousands of dollars a year for personal services that they don't strictly speaking need. (And it's actually pretty easy to get into that range.) But it can be hard to translate that into more than a mom-and-pop business, and certainly into a highly scalable VC business.

Yeah, when I visited Cairo a while back, the corner markets usually had a boy that would deliver whatever you wanted for a tip, but they were never going more than a couple of blocks, you could only buy what they had in the shop, and if the boy was out you'd have to wait.

Here in India, these startups are running into a problem with lack of labor.

No one wants to do these gig jobs. The only people who do them are people who have no other option.

It was great during the pandemic when everything was shut. But now that factories and offices are open again, people are opting for actual full time jobs.

The labor model fails if the local economy is doing well.

"There's no way to make that cheap" doesn't lead to "will never work".

It means it's at most a niche product, but it surely can work. There are plenty of people that transport only high-priority products. But yes, those companies promising to do it cheap will fail.

The problem is that none of these things are actually of a high priority. So customers wanting some chips or ice cream will not pay a high enough price to actually be profitable without heavy subsidizing.

Assuming you're correct, it's painful to consider the amount of effort and money that was wasted simply because investors missed this basic insight.

Investors didn't miss it. They were betting that:

* There was a core of customers willing to pay super high delivery costs to pay for the lack of efficiencies in the network. In some markets, there are quite a large number of people prepared to pay substantial premiums for convenience.

* Or... When they had a decent core of business, they could do a merger with companies doing slower delivery and therefore have a network with a mix of goods priorities. For example, a merger/deal with USPS could have them deliver your '10 minutes' groceries, and at the same time have the same worker bring the mail for your house and for the rest of the street. That way the worker effectively isn't doing any more work than the USPS worker would have been doing anyway, although it is scheduled to happen at a time determined by the highest priority items (the groceries), and costs are dramatically lowered.

Using USPS is a terrible example for a otherwise good hypothetical VC M&A/Partnership roll up

Amazon did ramp down Prime Now and Fresh in a lot of German cities. I don't kniw, but if Amazon tried two different approaches for eCommerce fulfillmebt and wasn't utterly convinced with either one it is telling you something.

On an other note, depsite my start-up having failed Amazon is now rolling out a similar product: opening up FBA for third party marketplaces. They are not moving as fast as they used to, but still faster than anyone else. And they are moving a juggernaught. No idea how thatbstill works after all those years...

Its going to be fun when people dissect this era of tech.

Like Uber - $33B in investor cash. $0 in operational profit.

The promise was always scale. Yet, now that it’s time to show profits, Uber has had to pull back from markets and reduce its scale.

The thing with Uber that I don't really get is this. Once it became obvious to pretty much everyone that it wasn't already obvious to that door-to-door autonomous driving wasn't going to happen in an economically interesting time horizon, why didn't Uber's board do something about it.

Sure, they cut back on those investments. But they didn't otherwise make the changes needed to get Uber to profitability given that nothing else was going to fundamentally change. Wasn't the logical thing to ramp prices up and let the chips fall where they would in terms of ridership and viability in various markets?

I get that Uber brought a better taxi service to quite a few markets. But as an Uber board member, I wouldn't really care.

My impression (from very far away, I don't have any kind of contact with them) is that Uber is based on a fundamentally bad informatics structure that has a very high operational costs. Those now can only be reduced by the same kinds of competent decision-making that would have lead to an structure with low operational costs at the first time.

Uber has quit a few markets like China and SE Asia that it was losing money hand over first in. And prices have been increasing.

My impression is that they sort of staked things on a pivot to UberEats, though that looks like a bust too.

Its an open secret in the Indian startup space that they’ve been looking to exit India as well.

Indian ridesharing is in a weird place where both parties in the duopoly are unwilling to dominate the market. Uber is trying to exit, Ola is focusing its efforts on a (failing) e-scooter startup.

Uber in SE Asia mostly lost their game to Grab and Gojek, the premier local competitors. They fare quite well, even now. Especially in Singapore, where ridershare services allow many car owners to recoup a part of the extremely high costs of owning a car there.

Uber had a really good innovation with their app but other taxi companies started to roll out their own and at that point Uber had to compete on cost.

This is right on the money.

I'm visiting Southeast Asia right now and Grab is a popular service.

It seems to me you can order anything (reasonable) from Grab, but it seems 95%+ of the orders are for food

I think the other thing that makes delivery here simple (and I'm guessing, profitable) is the proliferation of scooters. They're everywhere and everyone has one. I suspect decent gas mileage and simple to park convenience makes them the obvious vehicle for instant delivery.

It also helps to have a lower wage and higher unemployment rate.

In the US when you have Taco Bell paying $15/hr, you would need to pay a fair bit more for someone with a clean driving record and a car. And at that point, is it really worth $20 to get a single toy from the store?

>It also helps to have a lower wage and higher unemployment rate.

In a lot of Southeast Asia, personal service generally (drivers, full-time home help) is a lot more common generally for middle class-ish people than it is in the US or Western Europe.

Right, because there isn't a minimum wage in a lot of those places. I found out that the lady who took out the trash in my office made about $2 per hour when I lived in Singapore (one of the most expensive cities in the world).

All these Silicon valley start ups are trying really desperately to argue that they are not actually employing people.

While the same startup refers to their employees as "headcount" and "resources"...

I'm also in southeast Asia at the moment. Grab got big during the lockdowns and over the past few years of the pandemic. You would see the Grab-branded motorbike riders everywhere. But now it seems like I don't see them on the street as much anymore because they've hit a big speed bump: fuel costs for the motorbikes. As long as fuel was relatively cheap they could get employees here, especially since there's high unemployment, wages are low, and there are not a lot of jobs in provincial towns. But now they're struggling to scale.

I think it's because everyone in SEA has a scooter, so using Grab Taxi isn't super important. Although, I do see it used more often at night, for going out.

But Grab Food, Grab Mart and so on are spectacular services, and I find them way better and faster than Uber Eats in many places.

Now logistics have not only a "last mile" problem, but also a "last hour" problem to deal with...

> The promise is always a nonsensical "You can have anything you want from anywhere you want, faster than is reasonably possible".

Importantly, this kind of infrastructure quickly leads to bottlenecks because of hot zone times. Amazon with their 'overnight' delivery has got it right, having drivers do delivery in extreme early hours when they have to confront rather little traffic. Well, I guess it's good for everyone except the drivers who are forced to lead an unhealthy nocturnal lifestyle :(.

Forced?

Coerced?

> I think the interesting thing about these start ups is how ambitious they are. The promise is always a nonsensical "You can have anything you want from anywhere you want, faster than is reasonably possible". I'm surprised that there isn't a bigger focus on the actual technical limitations of what is possible.

A lot of people would reject that focus on limitations and realism as "negativity" and maybe even get hostile. It's stupid, but it might have been how we got to where we are.

How is it ambitious to have a bunch of teenagers on scooters delivering shit after school?

We would've had this the entire time if we didn't have minimum wage laws, that these companies are skirting.

> I think the interesting thing about these start ups is how ambitious they are.

They have to, to satisfy investors.

Investors have declared rapid delivery to be a winner-takes-all market, where the winner captures the customers through an app (customers can only have so many apps on their phone, and prefer to use a single app for their rapid delivery needs). So rapid growth is the only option. Grow or die. That's why we see so many of these startups going down.

I really doubt that take. Then again I'm extremely price sensitive customer... And will always look at cheapest option or even pass if the delivery is a few euros more... And I can't be only one.

I do that too. Since there are so many similar apps and the product selection is the same, I just go with whoever is offering the cheapest delivery or offers.

The app experience has been standardized enough that I don’t really care what I use as long as I get the cheapest price.

Yes, I think they are selling at a loss too. Possible thanks to investor money.

Very few people need many groceries within 15 minutes (or several hours or even same day).

What I am surprised we have not yet seen is "Trader Joes online". Not for Trader Joes to do it (they seem disinterested and very focused on an in-store experience/model). But for some startup or legacy company to make such an offering. Limited SKUs, terrific value, optimized for online ordering/storage/deliervy, etc.

There are a number of subscription grocery delivery companies in the UK that work on a fixed delivery day model. i.e. you sign up and based on your address you're given a day that all deliveries will happen on.

This works by having fixed routes, known ahead of time, which optimise for local driver knowledge (it's supposed to be the same driver every week), and therefore can afford to be really quite cheap for delivery.

I like the model and I'd like to see it applied to more types of food delivery.

If you are talking about actual Trader Joe's stock, I suspect you'd be locked up in a lawsuit pretty fast. IIRC, they (TJ's) successfully shut down a store-front operation like this in Vancouver (or some other Canadian city?) by a mix of lawsuits and identifying all the buyers then banning them - game of whack-a-mole but one they were willing to play. You could argue no harm as they didn't even operate or plan to operate in the country (and I think they did argue that).

I think GP just means TJ-like, as in limited # of items, primarily or all private label, etc.

That could work, but it's probably going to be a hard sell at first before you've established the name and trust in it.

Is that not what Amazon Fresh is, or is supposed to be, in the US?

(disclaimer: work for DoorDash, but in an unrelated org)

I was thinking MUCH more curated inventory. Private label for many/most of the staples. Relatively high quality at reasonable prices. Mostly non-organic with some organic options.

No, that was what PrimeNow was. PrimeNow is discontinued last year.

Amazon Fresh is scheduled fairly large delivery windows, usually at least a day out. If you get super lucky there might be an available slot later the same day but not often if city.

Because it's not about starting out with a sustainable business model.

It's about taking a massive wad of cash and using it to block other entrants into your marketplace. Keep out competition as long as possible, and then once no one is looking, raise prices.

(Honestly, it seems kind of short-signed to me.)

That doesn’t seem to have worked out for Uber. Doubt it can work out for anyone else

I mostly agree, it seems mostly a dead-end mindset. (Then again, I've decided for my career that it's best to work for someone who runs a business, instead of running a business myself.)

But, I was thinking a bit more about my statement last night; and I realized there are two directions to take: Build enough assets that, when the business fails, you can sell something off to whoever comes along with another wad of cash; or once you push everyone out and it's clear you don't have a sustainable business, rebrand so that everyone thinks you're a newcomer.

I personally wouldn't do it, but I'm too much of a nice guy to run a business.

Has this model ever worked for anyone apart from businesses with very strong network effects?

People will pay a premium for non-food items that they need today. For example: you’re hosting a party and have run out of wine or plastic cups or a wine ipener or whatever.

Tampons, toilet paper, razors, diapers, etc. are also things people often need right now and can’t easily get them (any parent with young children knows how much it sucks to run out of something at a point where the child is asleep - do you wake them to go to the store?)

Even random stuff like home improvement items - it really sucks to be covered in paint and then realize you need some sandpaper or whatever - having to clean off and go to the store in the middle if a project is a real pain.

Well people will pay premium as you describe but those are very few people. For vast number of middle class folks all these things are basic planning.

I am surprised, with all the notes / planning/ calendar/ reminder software being there along with incredible array of personal devices to store them, people can't combine these basic requirements with regular store trips.

That sounds good on paper but doesn’t work in reality.

To deliver products quickly, you need inventory close at hand, aka “dark stores”. To justify the massive upfront investment in dark stores, you need either need massive volume, or you need high average order value.

Massive volume doesn’t work because rapid delivery is niche and delivery fees means that people can’t use them as frequently. Plus, dark stores simply can’t carry enough inventory to do large volumes.

The only option is to increase the average order size. But because dark stores carry limited inventory, you can’t upsell much.

Not to forget that you need also quite substantial inventory. The stuff might not be perishable, but still you need to tie up capital in it. And you can't have too little either when there is demand spikes you can't fulfil orders or customers won't come back when you can't supply stuff.

Also a tough marketing pitch - if you emphasize "rapid" delivery, and you can't deliver in those 15-20 minutes, you'll leave customers dissatisfied. If you offer them the more realistic 30-45 minutes, you'll leave customers wondering why they're paying you the premium.

Especially in situations where you absolutely need something delivered immediately, the difference between 15-20 and 40-45 minutes is enormous.

I suppose it’s all about finding a small enough geographic area where a sufficient number of these emergencies occur for sufficiently rich people.

You are reminding me about the startup that did on demand single avocado deliveries for 700% markup with only SF/Oakland as a delivery area.

I'd love to read more about this, do you remember the startup's name?

Took a while to figure out, I kept getting "millenials ruined by avocado toast" articles while searching.

https://web.archive.org/web/20160814085512/http://www.goavoc...

You are describing bad planning as emergencies. They are just bad planning and there is a cost associated with it. That cost is not reflected in the price paid, so these startups run at a loss.

"Just in time life" is a bad idea.

>Even random stuff like home improvement items - it really sucks to be covered in paint and then realize you need some sandpaper or whatever - having to clean off and go to the store in the middle if a project is a real pain.

How many people are going to pay $25 or whatever to get that sandpaper delivered?

> it was built on top of a difficult but possible technical problem - building a much more efficient warehouse.

Amazon did not solve this via technical means. Amazon relies on worker exploitation for this.

Yeah, but it exploited workers at a scale never before scene. Truly showing the power of technology.

I dunno, the cotton gin was kind of a banger in that regard.

Many technical innovations went into Amazon warehouses. They pioneered random placement of items to load balance the aisles and workers, and rely more heavily on robotics than previous warehouses did. These things weren't feasible in the mid 90s.

I suspect the reason it is so terrible to work at one is that designing a fulfillment scheduling algorthm that can handle 10% variance in human throughput is really hard. (The main complaints the workers have involve bathroom breaks!)

They realize they are running out of people they have not burned out yet, and are looking into fixing it before exhausting the entire US labor pool, so clearly they've created a massive quality of life issue for the workers.

I'm wondering how long will they take till they think of exploiting the workforce of privatized prisons that's quite abundant in some places in US.

They wouldn't be the first ones to do this either. IKEA had a similar model in Sweden.

I think reality is that there is minimum you can pay for a worker. And there is only so much you can get out of single worker over longer period. Clearly they have overshoot the later and it will eventually bite them.

Main issue is that from numbers perspective only the throughput matters. Not if it is in general sustainable in long run.

Amazon pays warehouse workers well, though.

I'm guessing throughout spikes and troughs cause bursty behavior for the trucks leaving the warehouse, which causes alternating backlogs/idle time for the delivery drivers.

Also, how do you store big bursty backlogs of stuff that's already left the warehouse?

In other words, they’re the same as retail.

All those platforms sound nice when you are on the receiving end of things and not the one delivering. I used to go to a local McDonald's in London once in a while and when you see 15 Deliveroo guys queuing up with helmets, completely exhausted and miserable, then you realise the cost of that burger being delivered whilst you sit on a sofa. Or Amazon prime delivery, where the guy has to do so many drop offs that he literally runs from the van to your apartment...

Just to push back against this view a bit with one anecdote -- I'm still in contact with an ex-colleague of mine, who I used to work with in retail. He now works for various delivery apps. And according to him it's vastly superior to any retail job he worked previously and whenever I mention any of the negative press these apps receive and query for his opinion he usually just rolls his eyes. He gets to control when and how long he works, he gets to ride his bike (which he loves) and pay is much better than any retail job he would get in london (and he would be looking at retail manager considering his experience). So in that picture of local McDonald's in London, consider that perhaps those guys are actually much happier than everyone else working in that store (including the McDonald's managers). Obviously that's just an anecdote of one person, I don't actually have a strong opinion on this.

...until the day he gets injured, bike stolen, etc etc etc - and these jobs are also unsustainable because they're not saving enough for retirement, i.e. when your body is no longer able to compete with younger bodies.

Serious question, have you ever been poor in your life or worked a retail job?

Yes, many, I have stories. Inspired me to take school seriously. But this isn't about me.

Obviously, people working retail jobs have limited options to make money. But that's also not the point.

The point is that gig work sounds good until you need worker's comp.

I absolutely believe what your ex colleague says/thinks of his job is exactly what he means, however he's comparing it with a retail job,which,in most cases are pretty crap. I also understand that even if the job may look crap, it can still be a huge improvement for the person who's doing the job. I've done enough crappy and good jobs in my life to know the difference, but I appreciate not everyone would have such a perspective.

> , he gets to ride his bike (which he loves)

delivery guy i know has to, well, deliver and thete was nowhere to lock the bike. bike got stolen, 1 grand down the drain. he us borrowing a bike from a friend as otherwise he can't earn

My (now ex) brother-in-law had to pivot from waiting tables to a delivery job. A positive benefit for him is that when he has the kids, he can bring them along and spend some time with them.

That’s something that you’d take for for granted if you work at a laptop all day.

I did have some people delivering stuff for me with their kids/family inside the van. This is not OK in any shape or form. I understand why it's like this, but it doesn't make it any better.

One of the greatest aspects of working from home is getting to see my young son all day. When programming or other focus work I have to isolate, but for meetings he joins me and it's a lot of fun.

My job allows and supports this, and it's one of the biggest reasons I stay with them.

That job is arguably nicer than e.g. flipping the burgers or cleaning the kitchen at that McDonald's. The service industry has a lot of hidden jobs performed by hard working people that just aren't very glamorous. We're in a market with very low unemployment rate: people can choose what they do within some reason. Lots of people are choosing to take gigs like this rather than work as a dishwasher, or waiting tables. IMHO that's basically people voting with their feet.

Of course things in the US are a bit worse than in Europe. People have to work multiple jobs there just to pay the rent. That shitty job at McDonald's is not enough. So you have fully employed people that do that that find it necessary to take some gigs on top of that because their regular job just isn't paying enough. That's not the gig economy that caused that; something else was broken there long before that became a thing. Like the lack of a minimum wage, the erosion of the middle class, etc. Things looked pretty grim the last time I visited San Francisco. Abject poverty right next to extreme wealth. Whatever caused that, it's not Uber or delivery companies.

Here in Berlin, Uber drivers are just normal taxi drivers. There are a lot of people on bikes delivering stuff and they seem to be OK with that. Seems popular with mostly younger people. And of course Amazon Prime and other deliveries are a huge thing here as well.

The gig economy is definitely putting some pressure on the social insurance system and some countries are better than others at forcing these companies to treat their people fairly. Unions certainly don't like it that there people earning money outside of sectors they control. But overall, I think it's a system that could work longer term and not just a fad. We just need to figure out how to get these people insured against the inevitabilities in life: sickness, retirement, and unemployment.

This is not a fast-delivery problem though, this is a governmental/cultural problem.

If we could have fast delivery with rested, happy workers, then I see no problem with the fast delivery itself.

The question is, why are people doing these jobs if they are exhausted and miserable? Is the pay good? Are the (flexible?) working hours better than elsewhere? Why is it preferable to other jobs?

it's because if they don't have a (second) job they won't be able to afford to eat. or be housed.

This is the big issue. All of these "businesses" ignore the human cost and just assume an exploitable population begging to not lose their housing.

This is a problem that exists all the way through the product lifecycle with these services and leads to GrubHub offering free lunches in NYC but not telling any restaurants so an already stretched to breaking industry gets slammed with no warning.

All these companies are designed around an exit not a viable business.

Or living next door to a dark store. Because everything has to be delivered in 20 minutes they are putting them in residential areas.

Regulators are fighting back though, which some of these companies also note as a reason for getting out of the market. In the Netherlands Amsterdam is banishing dark stores from residential zones, one or two of these locusts specifically mentioned that development upon suspending their efforts.

This sounds like a moral concern? Lazy people who want a burger should be required to walk down and get it themselves? I mean, it's not like this is some kind of new thing, where people with money choose to pay other people to do some unpleasant bit of work they themselves don't want to do.

Surely the whole point of these delivery unicorns with insanely non-functional economics was always to appear to demonstrate rapid growth in order to bilk the greater fools in the investment market, never to realistically make it in the real world. I confidently predict that when this market squeezes out the greater fools (leaving fewer and more conservative investors), any delivery companies that haven't heavily adjusted their logistics and economics to reality (and still kept enough paying customers to validly continue to exist), will be defunct. Which will be most all of them.

Anecdotally, most of these startups also don’t seem to have a frugal culture. Which is fitting because they came about in an era of easy money.

People don’t talk enough about Amazon and its culture of frugality. If Amazon wasn’t a frugal company right from the very get go, I doubt it would have survived the dot com crash.

From European perspective it seems massive spending on every level. Losing money on product itself, very high pay, very high head count and so on... But then again I don't just understand software business.

Yeah, sitting on the sidelines, the headcount seems absurd. I came up when startups were meant to be efficient. Now I hear startups like Better.com that had 10k people? Feel like I'm in opposite land.

Isn't this just another race to become the dominant party in any given market? Not to dupe investors, but to burn money until the competition has folded. They want to be the next Uber or Airbnb, and will break laws and regulations to get there. It's easier to negotiate with lawmakers when many consumers find you indispensable.

It doesn't seem to work out here though.

Yet, neither do Uber nor AirBnB make money.

So it's still entirely based on a greater fool theory of economics.

I don't understand how neither of them can make money anymore. When they were offering rides at a loss to build market share I understood how Uber could lose money. But now how can the cut they take from every ride not cover expenses?

Because the rides are legitimately becoming too expensive to attract a large volume of riders.

As volume disappears, drivers start leaving the app - no fun being logged in all day and getting no rides.

If drivers start leaving the app, Uber has to incentivize them, eating into the company’s margin.

Essentially, the real, unsubsidized market for on-demand chauffeured rides is much smaller than anyone anticipated.

>Essentially, the real, unsubsidized market for on-demand chauffeured rides is much smaller than anyone anticipated.

It seemed probable that Uber pricing would approach taxi pricing. Which seems to have largely happened. And while Uber was arguably a better experience than cabs in many cities, it's not clear that just a better experience would cause a lot more usage at the same price.

The "better experience" argument rests on a false premise - that everyone has the money; they never spent it on cabs earlier because it wasn't easily accessible.

This kind of thinking is pervasive among tech startups now, and much of it is deeply embedded among startups founded by financially well-off, living-in-SF folks. The idea that the vast majority of people don't really have enough money to afford fair price cabs (or food delivery or consumer good) seems to be lost on them.

I do find a lot of physical goods startups seem wildly overpriced as consumer items. I mean, that's fine if you're planning on selling to SF tech folk, but then they talk about going national in major chains.

The simplified two step plan is a) subsidize the cost until the market share is big enough followed by b) once you have market share, use your weight to up the cost to a healthy margin.

If you overestimate your ability to actually do (b) you are going to have a bad time. You are squeezing both drivers and riders in the uber case, but both of them have other options - if they bail on you, you'll probably have to raise pay/drop fares to counteract it. There is no guarantee the business model actually works at the scale you wanted it to.

And in process of getting the market share, you have build organisation too heavy extract reasonable rent from the market. There could be place for these operators, but they have spend too much and continue to spend too much for their fair cut.

> So it's still entirely based on a greater fool theory of economics.

A lot of that going around right now.

I never understood the rapid part of it.

I either need something really quick, or I can wait. If I need something really quick, they basically need to be very close to me. If they are close to me, I can be just as quick myself. These service only work in dense urban areas. I have 3 supermarkets in 5 minute walking distance.

The non-rapid delivery service in the other hand is a godsend - that's how I got me food when I had COVID. And I guess there are a lot of people sick, injured, old or somewhat indisposed for which this service can be a real life saver. In these situations, I'm also happy to pay for this kind of service.

The rapid delivery part of it always made me feel bad for the delivery people. One time I happened to wait for the delivery on the stairs, he took 15 minute instead if 10 minutes, I was enjoying the sun in the meantime. He apologized for being late and was really stressed about it.

I think they're trying to rewire teen/young adults brain to reach for them before even thinking to step out.

Kind of like food delivery companies do/did. I know people who get pizza delivered from literally 50 meters from their front door. Or buy basic pasta with tomato sauce/cheese for 15 euros when you can do the same thing at home for 15% of the price and 15% of the time

Don't forget that it literally buys you time. Even if the pizza place is 50m from your door, you still have to put on clothes, wait in line to order and then wait for the pizza to be ready. Delivery on the other hand takes 1 minute out of your day.

If you have kids, time is worth a lot.

Pizza is simple enough that you can easily make it at home and it would probably be better and cheaper than delivery chain quality. But this will take even more time.

> If you have kids, time is worth a lot.

I'm talking about 20 something tech bros, they had plenty of time.

Also, you can call the place in advance and just come to pick it up, no wait time

I understand that time is important but as some point you still have to go through life. Otherwise what's the ultimate goal ? Matrix style pod with automatic feeding, that's what peak efficiency would look like

Making a pizza with your kids can also be quite a nice experience, better than putting them in front of candy crush while you do unpaid extra hours for mega_corp_of_the_day

> Also, you can call the place in advance and just come to pick it up, no wait time

Two way drive time, plus, depending on parenting situation, possibly needing to pile kids in and out and both ends, is not negligible time.

> I understand that time is important but as some point you still have to go through life.

Yes, and personally prepping every meal, or picking it up, is not the experience of life everyone wants to focus on. There's time to prep meals with the kids, or while they are home doing something else. There's time to pick something up for them. And there's time to schedule a pizza delivery that arrives about the same time as the babysitter. And lots of other things, that are sometimes right for some people.

> Making a pizza with your kids can also be quite a nice experience

Sure. But it is not necessarily the right choice every time you or they want to eat pizza.

> better than putting them in front of candy crush while you do unpaid extra hours for mega_corp_of_the_day

That's hardly the only reason to order pizza; holy false dichotomy, Batman.

Not everyone enjoys cooking. Not everyone enjoys food. And not everyone has oodles of spare time all the time. I love food, and I like cooking it sometimes. I also don’t get instant delivery, but mostly because the quality sucks. I get food delivered all the time because calling a place, picking it up and then going back home to eat it is a lot of time I would prefer to spend working or reading or doing literally anything else.

> Making a pizza with your kids can also be quite a nice experience,

Maybe the people who order pizza[1] have better experiences with their kid due to the time saved by ordering pizza.

If you're making pizza with the kid (or muffins, or anything really), it's not a 15m prep, it's at least 30m, usually more. You cannot rush things with kids.

[1] I make things with my kid, but I'm not snobbish about people who buy things to save time, and then spend their time with their kids differently.

> Making a pizza with your kids can also be quite a nice experience, better than putting them in front of candy crush while you do unpaid extra hours for mega_corp_of_the_day

Agreed, the problem is that making pizza with kids or just with your partner tends to be a lot of work and especially mess: preparing dough, wait until it rises, spreading the dough, slicing toppings, placing toppings while preventing the cats from snacking off the ham, put it in the oven, clean everything because EVERYTHING will be covered in flour, oil and tomato juice, eat, put out wastes to the compost bin...

It's one thing to do such a meal on a weekend where you actually have time, but after nine hours of work (8h+lunch break) and two hours average commute? Shit no, who got time for that?

(Side rant, we need lower working hours. 20 or 30 hours, not the 40 hours that were only made possible by having women as house keepers)

> preparing dough, wait until it rises, spreading the dough, slicing toppings, placing toppings

you can buy prepared dought and sliced ham. Beyong that either you have time to spend with kids or you don't - this couod one way to so that.

> preventing the cats from snacking off the ham

Thats the fun part

Not to forget that you need to be pretty sure you want to use the ham and cheese in next couple weeks... And if you don't it is pretty much wasted. Inventory management is restaurants problem. Which again makes life simpler.

> Also, you can call the place in advance and just come to pick it up, no wait time

I suspect both the orderer and order-taker are both a bit happier to have orders come in online instead of taking calls. It enables a bit more asynchrony and batching, and removes the potential for miscommunication.

Big advantage of moving food ordering online is that it's gotten rid of trying to read off an order through the phone to someone who barely speaks English, standing next to the phone in a loud kitchen with dishes clinking and people yelling in the background.

The order taker may not be all that much happier - those online front-ends see to charge sizeable fees.

I certainly hope you aren't getting delivery from a pizza place 50m from your door. Just order takeout, and it'll take 3-5 minutes instead of 1 if it's really that close.

For every parent stuck at home with the kids, there's got to be a quite large number of people who could go out and get stuff, but instead do not - and some percentage of them aren't doing "something useful" with the time beyond Netflix. I doubt delivery services could survive only catering to those who "need" or can "really use the time".

(Amusingly enough some customers of delivery service are the very workers for delivery services, I presume.)

It doesn't buy you any time when the delivery driver gets lost. This seemed to happen at least a third of the time. I gave up on delivery drivers. I order take out and pick it up myself.

I can confirm this happens. I used to cook, but even when I didn’t cook I would make a simple sandwich or pasta sometimes. But a huge number of people have forgotten how easy it is to prepare something simple since they became reliant on these apps.

It makes perfect sense when you need something quick, but can't leave the home.

Eg, you're working from home, cooking your own food, but are missing something. You have enough of a lunch break to cook something simple like pasta, but not enough to run to a shop, buy, then cook the pasta. Ordering it online means you can keep on working while it's coming.

Another scenario is where something else is expected to arrive. Eg, you have an important package from Amazon coming. You don't want the delivery person to try leave $2000 worth of hardware on your porch, so it's not comfortable leave the house for food.

Or when you have another schedule to keep. I have regular meetings with a trainer, and on those days it's great to have predictable deliveries, rather than "during the day".

Or you can buy an extra bag of rice and a few tomato sauce cans for these rare events instead of paying $15 for $2 worth of groceries

My grandparents had full time jobs and five kids, they managed just fine. This is a first world problem coupled with an edge case you can easily avoid

> You don't want the delivery person to try leave $2000 worth of hardware on your porch, so it's not comfortable leave the house for food.

Delaying or skipping a meal never killed anyone.

I feel like people completely lost their mind and make up semi fake scenarios to justify their crazy way of life. Either way I don't see how it justifies a multi billion $ industry

In my experience the dark stores were identically priced to my nearest supermarkets. The bigger issue is they didn't have the cheap brands. None of the $1 Barilla pasta sauces, instead it was the $5 brands.

Not so identically priced then, eh? Looks like they do need those higher margins.

> You have enough of a lunch break to cook something simple like pasta, but not enough to run to a shop, buy, then cook the pasta. Ordering it online means you can keep on working while it's coming.

Or you could do what most sane people do and buy the pasta and sauce in advance so you can prepare it whenever you want, for a fraction of the cost. Dry pasta and bottled sauce last approximately forever, so it's easy to keep an inventory at hand.

You've never ever been without an ingredient for a recipe? They're not saying it's their weekday routine to forget ingredients. But don't act like it's never happened to you.

Sure. And sometimes I forget something, and then don't want to sit for the rest of the work day annoyed and hungry, when I could just pay for my mistake with a bit of money and get over with it.

There's also the rare cases that don't work out sensibly otherwise in one's particular situation.

Eg, one time I ordered a pumpkin spice latte from Starbucks because I've never actually tried one. The closest Starbucks to me is an hour by foot, half an hour by public transport and 8 minutes by a car I don't have. It's also in an industrial area I have no reason to visit otherwise.

So win-win-win in that case I figure. I got my curiosity satisfied, Starbucks got money from somebody who'd otherwise never buy there, and some delivery person made a bit of cash.

At one point I spent two weeks ordering stuff from every restaurant around because I had a bunch of stuff to do and going all around the town would consume a lot of it, but I still got to try what everyone around is cooking.

The problem with a lot of these services, at least in western countries, whether rapid delivery of low profit goods, refrigerated meal kits, laundry pickup and delivery, and for that matter housekeeping, etc. is that most middle class-ish people are not willing to pay what it costs as a percentage of their own income. Some things work on the margins in dense enough areas and other things people will pay for as something of a luxury but for the most part it doesn't work, especially as a VC-scale business with a bunch of expensive engineers and other employees.

I consider my not-frequent-enough housekeeper sort of a splurge. I definitely wouldn't have them if I had to be paying the cost of a back-end business as well.

It is kinda middle-class trap in West. You earn how many times what lower-class service worker earns? 2-3x? Maybe 5x. Now your taxation and living cost take what at least half? Meaning that on low end for hour you worked you can maybe pay hour of someone else work. And hi-end maybe 3?

The math just doesn't look too good. And thus actual market is pretty small making it even worse as now the person you are hiring doesn't have full utilization.

Right. Even at 5x, that would be 20% of your pre-tax income to full-time employ someone which wouldn't be sustainable for most people. Even if you're paying out more per hour, it makes far more sense to have a lawn service come by every couple of weeks, get a cab or schedule a limo, etc. Of course, modern lifestyles and automation require much less of the Downton Abbey levels of staffing.

> most middle class-ish people are not willing to pay what it costs as a percentage of their own income.

Especially when the economy starts to studder. I used to rideshare and do food delivery fairly regularly when times were good, but I cut it all out as soon as I started reading about layoffs and I'm sure I'm not the only one.

A common characteristic of a lot of delivery services--as well as lot of content subscription services, etc.--is that, for most people, they're pretty optional. As you suggest, they're probably among the first things that people will trim if they're looking to cut costs.

Another factor to consider is that the economics make more sense in a dense environment. Most Americans are 10~20 minutes (by car) from the nearest pizza, whereas most Koreans are only 5 minutes from the restaurant (by motorbike). The difference in delivery prices is a full order of magnitude. (Food delivery in Seoul adds about $2 to the bill at current exchange rates.)

But the density of Korean cities also means that the real estate costs of running a dark store are much higher.

A 600sqft tiny warehouse space in Atlanta would be substantially cheaper than a similar space in Seoul.

In my opinion these are the three things that can't really be all achieved under current technology/infrastructure: cheap delivery, fast delivery, and delivery workers that are not miserable.

The illusion of all three being achieved at some point is because they are running at a loss of VC's investment money. Eventually investors will demand profitability, and one of the following happens: fees go up, deliveries get slower, workers become miserable.

This is also what bothers me with this new "hire others to run errands for you" industry. These are things you might find bothersome (go out to buy food, buy groceries, etc), but their perceived value as compared to the things you're buying is so incredibly small, that any "fair" compensation for the person doing it would discourage most people from paying for the service in the first place.

At its core, the amazement of "wow, the delivery of my groceries is so fast and cheap" is not at the shiny technology that makes it possible, but rather the amazement at "wow, there are people willing to do this for such a small amount of money".

I think you could get all three (the holy trinity) in some cases - but those would be pretty small areas (think: the five-ten minute walkable area around a grocery store - basically the distance you could get a bagger to run something over to you on his break for a fiver if you knew them well).

Once you're trying to pay for gas, maintenance, capital expense on a vehicle even if it is scooter, you're going to have to have delivery charges that rival the cost of what is being delivered.

Dominos perfected it (though they also depend on "customer tips" to offset the delivery costs for the driver); I'm not sure groceries are a high-enough margin business to sustain it for the long run (outside of perhaps a mile or so around a grocery store).

I like how the big grocery chains in the UK handle this.

you book a 1 hour slot. and get your deliveries delivered in that slot. Tesco drivers are always happy, they don't seem exhausted because I reckon delivery conditions tend to be better compared to the Deliveroo / startup guys. in the US I reckon it's the same with HEB pickup compared to instacart

In Canada (well, Vancouver), big box deliveries are handled by scheduling a day and being given a four hour window on that day when the delivery might be made. The actual time is frequently within that window, but often enough not that the selected day (typically a weekend day) is kind of a lowkey on-duty day for you because you have to make sure you’re available to let them in when they could buzz anytime. The system works, but like most systems, it presses against the customer’s annoyance threshold for slack in the system.

What you describe above is how Amazon Fresh schedules deliveries too. I know that regular Amazon delivery drivers are notoriously overworked and stressed out; I have no idea whether Amazon Fresh delivery (which seems to be mostly regular people in their own vehicles, rather than liveried Sprinter vans) is a better job. Hope so. But, there may be more to it than just the schedule.

It's all getting more integrated i.e. Grocery chains are using companies like Deliveroo/Uber to fulfil orders.

In the Netherlands, these services tried to disrupt the supermarket market by basically ignoring zoning laws. As the externalities dark stores create have been disrupting enough for residents to complain en masse, cities are clamping down hard. Which means that 15-minute delivery promise is increasingly impossible to achieve.

Why on earth is it illegal to have a grocery store closer than 15 minutes from your home?

It isn't. Most places in the Netherlands - and definitely in larger cities - are rarely more than 10-minute stroll from any grocery store. Anecdata, but as an example there are four supermarkets within a 10-minute stroll from my place of residence, and about two dozen smaller grocery stores.

However, the cities are arguing that dark stores aren't actually stores. You can't buy anything by going to them. The cities argue they are distribution centers. And distribution centers are not typically located in quiet residential areas.

Noise. Trucks, delivery guys having their breaks, and so on. Dutch residential areas are quiet and densely populated, and designed to be comfortable for the residents. Dark stores are about as attractive as neighbours as pubs.

It's not a grocery store, it's a dark store. I.e. just a small warehouse of food that has delivery drivers coming and going 24 hours a day to make local deliveries faster.

If you read some prior discussions on this you'll find that in many cases the people operating them are disruptive to the neighborhood and really aggressive towards anybody who dares complain about it. So it gets escalated to the city and eventually they clamp down. As they should.

Who is demanding 15-minute grocery delivery? That's not how people buy groceries. People are accustomed to building up a list over the course of a week and going to the store to buy it on the weekend. This is just not a need anyone has.

People have been trying to do this since 1999 with kozmo.com and it's just not worthwhile to pay a human being to hand deliver low value items.

Meanwhile, grocery pick-up has revolutionized the process. All the convenience of ordering online (including the ability to repeat your last order) with none of the expense of delivery to factor into the offering. Plus coupons!

I’ve been in a grocery store a handful of times in the last two years and it’s beyond aggravating how long it takes to find things, to roam around the store, and to deal with checkout.

It’s also interesting to see how often my parents “pop over” to the store for a single item. Not having that option (its a 2-hr trip now) has made me plan much better than I used to.

Product shortages have made grocery delivery/pickup a complete waste of time where I live. I did quite a few of them during the height of the Covid restrictions, and kept at it for a little while after they eased up. But for those serval months, I received the shopping list that I had ordered exactly 0 times. Which makes planning what to cook infinitely frustrating. The food shortages are still there when you go into the store yourself, but if you find some key ingredients missing you can at least pick some sensible combination of ingredients for alternative meals, instead of discovering after the fact that somebody at your local grocery store though radishes were a reasonable alternative to the sold-out spinach.

I haven't used grocery delivery in ages, but the one time I did because I was on crutches so doing a full grocery shopping was really awkward that was my issue: they didn't make reasonable substitutions, made unreasonable substitutions, or fresh goods didn't look great.

We have those issues with delivery in the UK but it’s not so much for these fast delivery services here in Germany: if it’s not in stock you can’t even order it, and the fresh stuff is actually pretty high quality (definitely past Lidl quality)

Yeah, if you're cooking tonight something with critical ingredients I might not rely on the pickup for that, but they email me what is out so I'm not caught unaware. It's basically just like if I went to the store to get organic chickpeas and they didn't have them, except I know that _without going to the store_. Plus I just got two weeks of groceries so it's all good.

Depends where you live. In many places in Europe people shop for 1/2/3 days only because of the close proximity to the shops.

This is a really interesting point and it resonates with my experience. When I moved to the US from Europe I was suddenly in a world where people had enormous fridges and freezers and could buy a massive amount of food at a time. They would never have fit in dinky little European apartment before!

This is also my experience for folks that live in NY.

Large fridges are available here; I think there's a lot more to it than fridge size. I suspect that big fridges are popular in the US because in much of the US shopping is extremely inconvenient, rather than shopping being inconvenient _because big fridges are popular_.

Shopping is always inconvenient. Even if the shopping is online and delivered, it’s pretty inconvenient to have to find stuff and schedule a time and take the delivered groceries in when they arrive. One of the features some of the newer 15 minute delivery shops have is allowing you to select only items in stock, which saves all of the actual store time, since you don’t have to be glued to your phone for the inevitable questions.

I walk past two supermarkets and a bunch of smaller shops on my way home from work; shopping is fairly convenient, so I shop basically on demand. What _would_ be inconvenient is doing a "weekly shop"; I don't have a car, and even if I did, the nearby supermarkets don't have parking. So, no need for a big fridge.

I live 100 metres from a store that sells pretty much anything from food to alcohol and then some more. Within 10 min walk I've got access to see much stuff that I would die before trying it all. If I jump in a car, I've got access to enough shopping that I could buy anything from a cake to a sofa. it can be convenient but yes, not everyone would have such access to products.

In Helsinki, my grocery store (~Safeway) is in the building across the street, and open 24/7. In BC, the store was a 10-minute car drive away, and open 9am-9pm.

Yeah, I walk past two smallish supermarkets on the way home from work, and I'm a 30 min walk from a couple of big ones. I never shop for a week.

That said, I also have no use for 15 minute grocery delivery because of this. And it seems like it would only work in urban/inner suburban areas; it's not going to be practical to provide this sort of service in outer suburbs/exurbs, and they're the only ones who'd have a use for it.

I just wanted to say that when I had been alone at home recovering from a surgery, I thought it would be bloody fucking nice to have such a service, even at a premium.

I ended up paying a premium anyway — for taxi rides to the supermarket and back anyway. Not to mention how exhausted it had made me.

Sounds pretty useful to me.

People were accustomed to just having a dumb phone and using a desktop computer for things before - no one needs a smartphone! Of course that totally changed.

I order all my groceries online and have them delivered on a regular basis and yes I build up a list but there are always (always! every-week always) things that are needed ad hoc, and other things that wont last between weekly shops (e.g. fresh fruit often wont last a week so you have strawberries for a couple of days then none the rest of the week)

So classic example of where this on-demand delivery is useful could be you've planned a big meal and forgot one key ingredient, or that key ingredient has gone off, or (as often happens) the online grocery delivery didn't have that ingredient on the day of delivery then what do you do? Just not eat that day? Throw out the rest of the fresh ingredients you were going to use to cook that meal that you now cannot cook? Perhaps try another recipe only then to realise that you are missing other things you need for that other thing you are going to cook? Or what if you just forgot to order something you need? Or you have surprise guests and no coffee left? Or unexpectedly ran out of something - e.g. ran out of baby nappies/diapers because the poor kid got diarrhoea and is using them up at 4x the speed of usual .... these aren't the sort of things you can just wait a few days for the next big shop for!

For me right now I just drive 10 mins to the nearest supermarket and pick up any bits (and if I am going there are almost always other things I can get at the same time while there - e.g. more fresh fruit or whatever), but I would certainly use one of these services more in the future if they continue to exist. I personally can wait a few days for new avocados to arrive if mine have gone bad before I've eaten them (the Avocado Lottery is always cruel), but some stuff simple cannot wait (e.g. nappies, baby food, personal hygiene stuff etc)

I do agree though that for the frivolous/impulse use is kinda silly - e.g. you decide you just want an ice cream or a can of coke or something.

Sounds like a small market and not a very good business.

Well the demand is clearly there as these things took off and people use them.

The profitability is the question here though - the market clearly wants this service, but at what price? To make it so that it is profitable for the business while also offering a fair wage to the workers will probably increase prices to the point where it is no longer desirable from users.

I would love if someone could run me some numbers. What is a realistic price for delivery of groceries where employee and business are both happy? 10 bucks per delivery? 20? Right now most of these rapid delivery services charge some crazy low fee, like under 2 bucks, and of course that doesn't work in the long run. But what is a real price for delivery?

Peapod has been around since pre-Web 1.0 in the US. It's owned by a grocery chain which probably changes the economics somewhat. But they charge a $10 base price (non rapid delivery) so I assume at least the breakeven for a fairly low overhead business is somewhere in that range.

Hannaford's pickup service is $5--which COVID aside seems like it would be mostly useful only in specific cases.

Whatever the living wage is for that area. Business would be happy with literal slaves. Thus, their opinion should never matter.

I don't know a lot about the business, but Zapp says its delivery people are employees.

If a supermarket can be profitable while it employs people to stack the shelves, man the checkouts etc., why can't you just move those people out into the neighborhood as delivery people?

Of course demand for groceries delivered in 15 minutes for the same price as you going to get them yourself is there. Add in the true costs, remove the VC subsidy, and see how well demand holds up.

I run to the store during the week to pick up 3/4 things or whatever I need to make a meal at the last minute.

Sounds like a good fit. People that only go to the store every 1 or 2 weeks would be my parents or grandparents.

I occasionally use these services when I realize I've forgotten to buy something and I'm up against a deadline so I can't leave the house (guests coming over, child sick, etc). But this happens a couple of times per year tops, vs my regular bulk grocery delivery every few days.

> People are accustomed to building up a list over the course of a week and going to the store to buy it on the weekend.

I go to the supermarket everyday and buy what I need for this specific day, going shopping once every weekend is kind of a boomer thing here

Lots of people use grocery delivery here too (Berlin), but I find that extremely weird given the abundance of supermarkets. It rubs me the wrong way to pay modern slaves to get toilet paper and veggies delivered to my door when I can walk down the street and get it for 20% less

Interestingly in the UK grocery deliveries are very popular but they are still a weekly thing: people buy £100 of it and it comes in 8 plastic bags or something. Very good for old people or people who are busy with children. You have to book the slot quite far in advanced though. You also get to reject stuff at the door if you don’t like the look of it and you get refunded. But as you say Europeans are generally more used to frequent small shops, so it makes sense that the delivery services are more fast paced and based around smaller shops. Fruit and veg are also far more expensive (at least 1.5 to 2x) in Germany than in the uk by weight, so people end up with less of such heavy items

I have stuff delivered because it's a whole thing taking a toddler shopping. Getting dressed, getting there, being bombarded with ads and product placement that is geared to reel in kids. I tip well and try to not make use of the rapid delivery services too much (instead I choose to use the delivery service of the big supermarket chains that deliver after a few hours or next day). Not having to go to actual shops when you have kids is a true God's end. (also Berlin).

The thing that caught me was how bad the engineering quality was for these companies. It's laughably easy to get thousands of new customer discounts (usually $20-$30 worth of food each).

Other industries seemed to have solved this issue long ago (AWS even has a cloud service if you're completely clueless)

This[1] is just one story from Reddit, but I've seen it happen with Gorillas, Getir, and some of the companies that have already shut down

[1] https://www.reddit.com/r/GoPuffDrivers/comments/scb23p/fraud...

As usual, the various priorities are not aligned. The programmers "moved fast and broke things" in order to get the website up quickly. The delivery companies go to their VCs and boast they had thousands of new customers sign up. The VCs can go to their backers and boast of exponential growth curves. The backers are flush with money and desperate for returns and so will fund anything that looks like a growth area. Everyone got what they wanted (for a while).

A lot of these businesses are fine with that transaction. It's not bad engineering for sure. Business is weird when you're goal is to grow instead of make money.

The idea is that it should be like pizza delivery. Fast. Clearly, it was achievable by pizza shops and profitable for ages, so what went wrong?

I think the answer is that huge numbers of large engineering salaries really need to have a payoff. GoPuff was hiring in my area for years. During that time, I don't think I ever saw substantial changes in their app - which I know was originally designed for cheap by an overseas team in Ukraine or Russia from conversations with their recruiters. Meanwhile they had multiple bugs preventing checkout in their apps - that's the one thing you have to get right if you're selling products. Additionally, they had a poor system of estimating delivery time. Then they were often out of the desired products - you can't run out of your most popular products. Meanwhile they would have drivers lined up for several blocks around their warehouses - such an obvious inefficiency, but they seemingly haven't connected the "drivers are unhappy with waiting" and the "customers are unhappy with waiting", and I suspect they just don't give a shit about driver complaints. On two occasions, I had my order canceled because they couldn't fulfill it in time. I'm a few blocks away from their warehouse and half a mile from their corporate HQ. Yikes. If you can't get it right in your own backyard, how can you get it right anywhere?

The past couple years maybe you can blame supply chain issues in part. You could also blame low unemployment and rising wages - raising your highest costs while making it hard to hire and deliver on time. But at least with my local example, there seems to have been near-total stagnation on the tech side for the past 5 years, which you can't have with a fledgling product. As a software engineer, I'd never have let that happen, even if I had to rip the whole damn app apart and rebuild it.

Pizza delivery isn't profitable, it maybe breaks even. Pizza selling is profitable. Pizza delivery expands your range for pizza selling.

That's more about the pizza than the delivery. Pizza scales really well. If you order chinese food for 10 people you're getting a lot of different things. For pizza you're getting pizzas. They go in a standard stackable box that sits nicely in the front seat. If it's a busy time you can stack multiple orders of pizza together. Pizzas are higher margin than most foods, requiring not a lot of labor or expensive ingredients. People tend to order more pizza than they need because it saves pretty well. Pizza is pretty clean, at least to the extent that even the greasier ones won't leak through a good box. It's a common party food meaning you'll get more big group orders. It doesn't come with expensive ingredients. It's easy to package. If you start an order of 5 pizzas they should all be done at about the same time. And in some fiction your delivery workers work under threat of death from the mob itself.

Funny enough, the Chinese and Japanese restaurants in my area are basically always on point and have the fastest delivery, despite having the most complex preparation. Why can I order sushi faster than I can order a few items that are pulled off a shelf and thrown in a bag? Especially when the cost of delivery as well as margins seem to be higher for the latter. You can't tell me it's harder to delivery a bag of snacks than a sushi roll.

Sushi is pretty quick to make, and maki rolls moreso. It tends to be a high margin item due to a high price. A sushi order with $10 of profit can be delivered for $5. A few snacks with a profit of $1 cannot be delivered for $5. Maybe you can shrug and just pay a higher delivery cost : item ratio to make it happen anyway. But in my area the reason the asian restaurants are only faster is because they have their own dedicated delivery staff. That would just not work for random convenience stores because the order volume is low due to stupid prices.

Margin $, Margin %, Transportability and Order Volume are the big ones in my guesstimate. Pizza is the ultimate choice across those 4. I don't think asian restaurants are better at this across the board consistently.

Maybe in the 90's and early 2000's. Pizza delivery has gotten to the point where I don't even try it anymore.

Sometimes I'll see a deal - you know, 2 for 20 or something. Great. By the time you add tax, delivery fee(now around $4), and mandatory-but-not-really-mandatory 15% tip, it's up to 30. And half the places put a tip line on the receipt even when picking up...I leave 0, but assume they think I'm a tightwad(maybe I am, but what am I tipping for here?).

Dominos even has deals carry out only to try to keep people from ordering delivery, it would seem.

> so what went wrong?

Low market diversification with companies competing on price, not quality, and offshoring the kernel of their work.

Actually, things went surprisingly well. I expected much worse outcomes.

At least around here delivery is often not that fast. I can usually do the pickup myself in half the time.

Same here. There is less opportunity for error picking it up yourself.

> The company still operates in cities like São Paolo, Mexico City, and Bogotá.

The article kind of glosses over this, but delivery is much more viable in cities where labor is cheap. Delivery is hugely popular in eg China and South-East Asia, where the few dollars of unsubsidized delivery fees paid by the middle class can actually sum up to a living wage for the poor doing the jobs.

More accurately, this is much more viable in cities with a big wage gap between the lower class and middle class. The upper class uses different services and there's simply not much of them to make a scalable business; but if a middle-class worker earns 10 times more than a poor worker, that means that service jobs will be much more used than in the West.

Like, almost no Western doctors, lawyers or engineers afford a chauffeur or a full-time domestic servant, but there are areas of the world where that is quite plausible, just as it was in the West hundred+ years ago with minimum wages that were proportionally much lower than now.

That's a really good way of putting it.

Essentially, there is this whole class of businesses that are fundamentally trying to make services available to (some definition of) middle class consumers who mostly couldn't/wouldn't afford them previously except as an occasional treat or a special case situation.

The problem is that technology doesn't make the labor cost cheaper and adds costs of its own.

> Delivery is hugely popular in eg China and South-East Asia, where the few dollars of unsubsidized delivery fees paid by the middle class can actually sum up to a living wage for the poor doing the jobs.

I don't think you're using "living wage" in the same sense as it's typically used in the US. IIRC, those delivery people in China work very long hours to live extremely precariously. They're also often treated extremely unfairly (e.g. having to eat the cost of a failed delivery that was in no way their fault).

I lived in Colombia for a while and you can use the Rappi app to have anything delivered, usually pretty quickly. They'll even bring you cash (like an ATM) or go to any store and buy a specific thing you ask for. And delivery costs are so incredibly cheap that locals can easily afford it (in the city at least).

I used the Zapp service (https://tryzapp.com/) while staying in London last year - it seemed to work OK.

The thing I liked the most is that it had real-time stock management, so it could tell you if something was in stock when you place your order, and guarantee that you get everything you ordered.

Ordering groceries online from the major supermarkets in the UK can be frustrating, because they simultaneously stop you ordering items they think will be out of stock on your delivery date (regardless of whether that's the case), and they have no idea what will be in stock until the day of the delivery.

I think grocery delivery through services like Uber Eats and Deliveroo suffers from the same problem - if your item is out of stock, or the driver can't find it, you won't get it.

In terms of the market, there are probably just too many companies trying to do the same or similar things.

By far my worst experience of any delivery was a recent deliveroo order.

Our household were down with covid and therefore trying our best to isolate while at the same time we were running out of painkillers.

All the supermarkets couldn't do same day delivery.

Out of desperation we tried deliveroo.

Ordered paracetemol, ibuprofen, strepsils and to make up the delivery some comfort food like cake, cokes and a few other essentials like milk, bread.

Over half our order was "unavailable". We got none of the painkillers whatsoever, got a different loaf of bread. Only thing that actually arrived correct to order was the cokes.

Tried to complain to deliveroo but never got passed the automated bots which gave us a pathetic amount off our "next order" which is useless because I'm never going to order from them again.

If it weren't for an introductory offer we'd have ended up spending a vast amount on essentially nothing between the delivery fee and the price gouging that's baked into the quoted prices.

If _one_ bad experience turns you into a lost customer, then this business model purely operates on the happy-path and hopes for the best.

I am highly sceptical that the core promise “anything, anytime“ is really what people need: they use it, because it’s possible, not because they want to use it.

The alternative to your problem would be asking a friend/relative to do the shopping, using the in-house delivery service or simply make do without. All more secure options than ordering something and not being sure, you’ll actually get it.

I say good riddance for this petty excuse of a business!

The thing I liked most about Zapp is that they've given me £100 in discounts on £200 worth of shopping. The cost of revenue for all these rapid delivery companies must be insane.

Wow! VCs trying to destroy the market again... What could go wrong?

Archived mirror: https://archive.ph/qjNoG

It’s like no one remembers Kosmo.com

And Urban Fetch. Yes, I remember very well. I think these delivery startups may become a leading indicator of tech startup bubbles.

And webvan.

Lots of them raised billions here in India. The business model is fundamentally unsound and rests on everyone, investors and founders included, riding that magic fairy tale called “scale” to make money.

I think that it is likely these rise again (well maybe as different businesses) as delivery technology improves via more automation across the whole network.

anyone else notice truly horrific driving by prime delivery vans. I almost got ran over by a prime van making a rash right turn without checking the bike lane.

Some of my friends have experienced this too here in chicago.

Entirely expected. The rate of deliveries they are expected to do is very high. And then there is draconian surveillance involved. Though the later should avoid such cases as you had...

Seems to work fine in Mexico City

Same here in Hamburg, Germany. People seem to love it, but maybe the problems are just invisible to me. I only used it once when I had COVID. I was surprised because some beers were actually cheaper than the supermarket. If you buy 10 you’ll make up the delivery fee while getting the beer cheaper than you would usually. I was surprised that they have a fresh bakery too

The only downside was that the milk and bread were going out of date arguably too soon, about 4 days, while in the shop I could easily find ones for 10 or even 15 days

I still miss Kozmo.

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