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Comment by ereckers | Hacker News Reader

Why are Silicon Valley startups continually trying to get into the food and grocery delivery business? Is there research somewhere that shows that this is a lucrative market?

I'm old enough to remember Webvan, I'm seeing COSTCO cede their delivery service to Google, and I realize that most food delivery business is minimum wage work. I don't see the money in it.

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I think a lot of Silicon Valley startups cannot see beyond their Bay Area bubble where everyone earns $150k, treats their time like gold dust, and will pay a premium for menial services.

There isn't much money in grocery delivery services at scale.

"I think a lot of Silicon Valley startups cannot see beyond their Bay Area bubble where everyone earns $150k, treats their time like gold dust, and will pay a premium for menial services."

Couldn't agree more. Amazing how tunnel visioned they are.

>I'm old enough to remember Webvan,

I see it as very different from something like, say, Instacart not because of the core idea of grocery delivery, but because Webvan made some mistakes that seem made-up when read today. Recall they had their IPO just 60 days after their first webstore which in turn was something like one month after their beta launch.

So they went from beta with 1000 users to IPO in like 90 days. That's, what, the time Instacart spent just in Y Combinator growing and learning?

Also wasn't WebVan running warehouses? That is so totally different than InstaCart and Google Shopping Express. Your long memory is, IMO, working against you here.

AmazonFresh is doing something along the lines of what WebVan was trying, with the capitalization to make a real go of it.

>Your long memory is, IMO, working against you here.

What you wrote and what I wrote I don't think conflict at all, so I don't know why you'd say it is working against me. Also I have found references to what I wrote in writing[0] so I'm not completely crazy.

Now, an anecdote that I might screw up because my memory is fuzzy about it, is that the founder of Instacart was given a copy of Webvan's business plan on a floppy as a sort of "Good luck!" token.

[0]: http://www.amazon.com/The-Startup-Owners-Manual-Step-By-Step...

Sorry, my reply was to GP.

I think for two reasons: Food delivery is essentially rent-taking, since once someone begins to use it, they'll use it indefinitely (until a better service or format comes along); and secondly, I see grocery delivery as a way to trojan horse in to same-day parcel delivery, since if a person is delivering your groceries, the marginal cost of having them also deliver a package is tiny in comparison to the cost of delivering just the package.

It's a time consuming and often inconvenient thing that almost everyone has to do on a regular basis. Everyone is a large market and if you can find a small percentage of that market willing to employ your services, that's still significant.

I assume the idea is to give their drivers something useful to do with downtime. If all drivers could be closer to 100% utilized by taking a delivery when there are no passengers, they could have more drivers and happier/wealthier drivers.

Similar to AWS, really. Originally the AWS idea was that Amazon needed those extra servers and a way to manage them anyway, might as well do something valuable with the excess capacity.

I can see that thought process. However, I think there's a big difference between racks of servers and racks of people. People skip work, crash into things, ask for raises, unionize, sleep in, etc.. I don't know much about commoditizing things, but I'd much rather invest in a warehouse full of machines, then a low wage and potentially uninspired human workforce.

I really wonder why as well. Grocery is a super low margin, super competitive business.

Uber outsources most all their costs. It's lucrative for Uber

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