[sbacic]

I'm curious - why is there no open source solution to replace these apps? If not with full functionality, then at least with 80% of the features?

The day to day running of the system for each particular market could be handled by an NGO, a cooperative or something of the sort.

[jsmith99]

Because it would not be competitive? Most of these apps are loss making. An open source solution wouldn't involve VCs subsidising your deliveries.

[sbacic]

So let me get this straight - it's a bad deal for the restaurants, it's an increasingly bad deal for the deliverymen and it depends on VCs subsidizing it to even work?

How did something like this even get funded? I mean, I could understand if the development costs were being funded by VC money, but actual deliveries? Even if one company were to actually dominate the market, it would still need to continue subsidizing variable costs and there is no moat to protect them from competition.

[kragen]

Operating a two-sided marketplace is one hell of a moat. Nobody's displacing eBay, Amazon, or the Google Play Store anytime soon; even Craigslist seems to be getting by. Here in Argentina, MercadoLibre established an eBay clone before eBay moved in; the consequence was that eBay just bought shares instead of even trying to compete. The VCs are betting that a similar thing will happen with delivery apps: one of them will win, and then they'll be in a position to dictate Apple-like 30% terms to diners and restaurants.

(And, as eru points out, they might be able to establish a regulatory moat to prevent any new entrants from arising once they're established, like the drug and medical device companies. Did you know the first clinical implantation of a cardiac pacemaker was in 01958, only two years after the transistor was invented? The patient died—in 02001, 43 years later. How long do you think it takes an incrementally improved new pacemaker design to get regulatory approval today? Much less a totally new kind of medical device?)

Keep in mind, though, that "VCs are betting" doesn't mean that the VCs think this is the most likely outcome, even the ones who did invest. It just means they think it's sufficiently plausible that if it does happen they want to own a piece of it.

[sbacic]

> Operating a two-sided marketplace is one hell of a moat. Nobody's displacing eBay, Amazon, or the Google Play Store anytime soon; even Craigslist seems to be getting by. Here in Argentina, MercadoLibre established an eBay clone before eBay moved in; the consequence was that eBay just bought shares instead of even trying to compete.

That's due to network effects, not because they're operating a two-sided marketplace. And then you list an example where that moat failed (Argentina - and it's not just Argentina).

I suspect that on this particular market, network effects won't have as strong of an effect and the local players have better market insight since they're far closer to the customer.

[kragen]

Yes, that's because of network effects, but that doesn't mean it's not because they're operating a two-sided marketplace. Operating a two-sided marketplace often provides extremely strong network effects; for example, listing a one-of-a-kind product for auction on eBay means you can't list it for auction on MercadoLibre. (Though now most MercadoLibre listings are mass merchants, not people cleaning out their storage space.) And I don't think MercadoLibre's survival is an example of where that moat failed; it was just outside eBay's moat.

Two-sided markets are kind of like Willie Sutton's banks. The buyers have to go to, say, Amazon, because that's where the products are. The sellers have to go to Amazon because that's where the buyers are. Amazon does whatever they think they can get away with to keep those relationships exclusive, which is the genius of Fulfilled by Amazon.

I suspect that you're right about the food delivery market. Probably most of the VCs investing in it also suspect you're right. They just aren't sure.

BTW I had to upvote your comment because some dumb fuck downvoted it.

[jpalomaki]

Some people must believe this model can be made to work.

I think it might happen via ghost kitchens. Distributed food preparation and couriers picking from small restaurants is inefficient. Larger kitchens, optimized for quick pickups, same people preparing food under many different brands.

Maybe one can also rethink how the apps work, to bring bit more efficiency (if you control the larger part of the production chain). Most of the time when using these apps I'm hungry and I just want to eat. I would be actually quite happy, if the app could provide some decent recommendations on what could be delivered quickly.

[timdaub]

IMO this branch of the thread signifies the core of the issue.

I'd argue that if we went down the rabbit hole of delivery startups to find where the thought originated that these kinds of businesses "must work somehow", we'd find irrationality.

Recently, I've come to realize that maybe all that's bad in the world is simply that at one point in the value supply chain someone favored an irrational over a rational thought. In case that person was very influental, we get cases like this where food is delivered through a permanently unprofitable strategy.

I wish we could just further rationalize the whole business to find the actual product's value and its market fit. Intuitively, it probably lays within canibalizing the actual business heavily and by e.g. not really delivering food on demand anymore. People just want the convenice of getting food quickl yand a wide variety + a threshold of quality.

Delivery drivers are one option to a huge solution space.

But those companies and investors can't afford to backtrack anymore. They now have to die to make space for a more adjusted solution. It's absurd.

[eru]

> [...] and there is no moat to protect them from competition.

The moat might come: there's always pressure for more regulation. Once a company is established, it can yield to that pressure and even actively invite more regulation.

Thanks to regulatory capture, regulation often acts as a moat for incumbents.

[yetihehe]

> How did something like this even get funded?

I believe that it's "too much money sloshing around".

[hutzlibu]

And this is so weird. There are so many awesome projects struggling for funding and then there is "too much money sloshing around".

[yetihehe]

Because those awesome projects have low possible returns, or are not "web scale". VC's invest in projects that have high potential returns and growth possibilities.

[Macha]

The hope for most of the investors is to undercut the competition out of business, build customer loyalty and then hike prices as far as I can tell.

Which seems to miss that even if they succeed at doing that to the incumbents, they're then vulnerable to the next investor's subsidised business doing the same to them.

[modo_mario]

>they're then vulnerable to the next investor's subsidised business doing the same to them

It happens rarely nowadays unless they change something notably about their offering or the next investor is a major corporation that couldn't buy out the smaller player.

[d0mr]

There is, https://coopcycle.org

[throw_m239339]

Interesting, is the client or the server open source? Who finances that?

[irtigor]

I also got interested, there's a link to the github page near the bottom of the site: server is source available, commercial use is only allowed to co-ops and a few other entities, the client is opensource (MIT license).

[rualca]

> I'm curious - why is there no open source solution to replace these apps? If not with full functionality, then at least with 80% of the features?

Who would benefit from that? Delivery companies offer a simple and practical way to process orders and payments. Restaurant chains can and do provide their own in-house delivery services. The added-value is not the software infrastructure but the service that's provided.

What exactly is the value proposition of open-sourcing a platform?

[ahepp]

If the market operated more efficiently, everyone would benefit. The question is, would it be more efficient?

I can imagine some kind of federated system where restaurants put out a contract in response to a customer order, workers bid on it. Maybe there's even blockchain based reviews.

It seems that efficiently connecting buyers and sellers in the delivery labor market, without an middle party to collect huge fees, would be beneficial to everyone.

[brundolf]

You're asking two different questions: an open source app is not an organization, and the organization does more than zero here (as another commenter said, you need cooperation)

Secondly you suggest a co-op, which could maybe work if this were actually a profitable sector. Currently it's still loss-leading

[bjackman]

I have actually thought about this a lot. I think the answer to your actual question (why not?) is obvious: people with the capital+skills to start this up do not have a solid profit motive. People who would benefit from it don't have capital+skills.

However I think setting up something like a worker-owned cooperative to replace various gig economy companies would be a really cool project. Honestly if such a service existed, and my friends continued to use the (cheaper) VC-subsidised option, I'd ostracize them for it.

[solnyshok]

by Guild (by Union)?

[CryptoPunk]

These applications will 100% be decentralized, but cryptocurrency needs better scalability first. You can't be paying $20 in gas fees to place an order.