[scep12]

> You have insanely large pools of capital creating an incredibly inefficient money-losing business model. It's used to subsidize an untenable customer expectation. You leverage a broken workforce to minimize your genuine labor expenses. The companies unload their capital cannons on customer acquisition, while this week’s Uber-Grubhub news reminds us, the only viable endgame is a promise of monopoly concentration and increased prices. But is that even viable?

Are there historical examples of this strategy working? I can't think of any off the top of my head.

Uber's bet is that the desirable customer experience (quick, cheap delivery) is tenable with both 1) scale and 2) new technology that drives prices down. In the long run, I think they're right:

For #1: When you consolidate two (or more) local delivery operations that do the same thing, you can increase the efficiency of your operation as a whole.

For #2: The big question is: can they stay solvent long enough to see autonomy or other delivery technology come to fruition? I have serious doubts about this. I expect we'll see Uber slowly raise prices to keep the business sustainable.

[agacera]

In Germany, Takeaway [1] bought most of the competion and the small players quit (like Deliveroo) since they couldnt compete... well looks like this is actually working:

https://corporate.takeaway.com/investors/results-and-reports

Prices were raised and I doubt restaurants and delivery guys are making more money in this scenario than they used to.

[1] https://corporate.takeaway.com/

[samtp]

> For #1: When you consolidate two (or more) local delivery operations that do the same thing, you can increase the efficiency of your operation as a whole.

The problem with that is delivery services have a fixed cost per order that does not significantly decrease just because you are fulfilling more orders, especially across multiple regions. You can group multiple orders per delivery, but the amount you pay the driver can only go so low before it is not viable for them to work for you.

[scep12]

> You can group multiple orders per delivery

Isn't this the reason that cost per order isn't fixed? The more orders a single delivery can fulfill, the lower the cost-per-order becomes.