[pedrocr]

Delivery services work very well in places with very high income inequality. You need to pay a small amount to the courier and then sell an expensive service to someone that's price insensitive. Simply adjusting by PPP doesn't guarantee the model works elsewhere. You need to adjust by demographics of who is buying and who is providing the service in each country to figure out if you can balance it out. So far it seems most Western countries can't make that work and investment money is filling in the gap.

[zxcmx]

Maybe the gig economy is just "too early". Like maybe the whole industry is actually a giant bet on income inequality getting worse :(

That seems incredibly grim, and I hope most investors are just waiting to see if anyone can pull a rabbit out of a hat somewhere (bootstrapping economies of scale, automation, etc).

[blaser-waffle]

The whole industry was a bet on automation -- self driving cars -- and broke-ass uber drivers are just a way to grab market share until that happens. Uber is explicitly betting on self-driving cars, and it's why they're okay hemorrhaging money in the short-to-middle term.

[ghaff]

>Delivery services work very well in places with very high income inequality.

This is true of any personal services that depend on relatively low-skill labor. Being able to "timeshare" (e.g. Uber/private cars vs. full-time driver) helps to a degree. But, in general, until you get to quite high wealth levels, relatively few people can really afford to constantly shell out for cooks, cleaners, handymen, nannies, etc. on a day-to-day basis in the West.

[pedrocr]

I agree with that. But the market expectation is very different. In businesses like groceries there is a general expectation that deliveries will continue to grow even though there's no reasonable expectation that the unit economics will improve dramatically. The market keeps growing though, with all those deliveries subsidized by the regular store sales.

[ghaff]

>The market keeps growing though, with all those deliveries subsidized by the regular store sales.

You can only grow subsidies so far. I expect as things hopefully get back to come semblance of normal and VC subsidies evaporate, a lot of these delivery options evaporate as most people decide they'd just as soon keep their money and spend a few minutes picking up their own groceries or their own takeout.

Given the failure of businesses like Webvan--and the fairly limited growth of Peapod--I'm not sure I see the continuing growth.

[pedrocr]

> I'm not sure I see the continuing growth.

You're probably thinking of startups only. Traditional retailers are growing their delivery services pretty much everywhere in the world.

[ghaff]

Not so much startups only but, yeah, I was thinking primarily of fast local deliveries of perishables of various types.

For delivery more broadly I agree outside of some categories. While online shopping is still a fairly low percentage, it's growing. One also suspects that many will come out of the current situation thinking "That delivery stuff worked pretty well. Maybe I don't need to run some of those errands I normally do."

[JumpCrisscross]

> Delivery services work very well in places with very high income inequality

It needs density more than inequality. This is true for many professional services.

[pedrocr]

Density helps if you're delivering a bunch of small things that you can easily batch together. The kinds of things being tried by these VC funded attempts are not where density helps the most as you either have a delivery that requires too much interaction (e.g., groceries with a fixed time slot) or are aiming for speed (e.g., hot food quick delivery). So there's no reason you can't have a postal service in a very equal society as delivering mail and small packages in urban areas is efficient and you can cross-subsidize nationally. Once you get into multi-temperature deliveries in fixed slots and very fast fulfillment and delivery really cheap labor in comparison to the service price is needed to balance the books. Some of that could be fixed by cutting an order of magnitude from the delivery time by use of lockers and other unattended delivery methods but then you have a chicken-and-egg infrastructure problem.

[ghaff]

Densities help for deliveries because they're more efficient in denser areas. But there are a lot of personal services that aren't all that dependent on density.

[marmaduke]

Doesn't this create a perverse incentive to increase income inequality? And more so it is self reinforcing: if the entire economy was built on ubereats there would be an inescapable difference between the service provider and consumer. Maybe this is at odds with the idea that these schemes can scale.

[eanzenberg]

I don’t know. I think it’s saying that personal delivery services are not viable in more equal societies. The US would be one of those, where every party is losing money from the transaction.