[whoisjuan]

He did very little analysis on how the actual Prime subscription price contributes to the profitability of Prime Now.

You cannot evaluate Prime related services in isolation because the whole point of Prime is that you get a bundle of services that make your life easier and allow you to get a bunch of things for a flat subscription rate. Some of those services could be forever unprofitable, but if you remove them from the bundle, you could be destroying more value and making the whole program unprofitable.

The author fails to evaluate at least two key points:

1) Prime is still in its infancy. It's clear that Amazon's goal is to reach a total share of the market that can only be compared to paying for your phone bill, except in this case the phone bill is Prime, and Amazon is the only provider. That changes the whole picture regarding economies of scale and flywheel effects.

2) The author did his pseudo-experiments (asking Prime Now drivers how many deliveries they did last hour ) in Seattle (I presume since he mentions he is a PM at Amazon).

Of course Prime Now it's not going to be profitable in all markets but it's also not that far from breaking even. The real profitability will come from highly concentrated markets like NYC and Singapore.