I think the interesting thing about these start ups is how ambitious they are. The promise is always a nonsensical "You can have anything you want from anywhere you want, faster than is reasonably possible". I'm surprised that there isn't a bigger focus on the actual technical limitations of what is possible.
By making your offering "You can have anything" you draw in a load of customers who are ordering things that actually aren't that urgent, and therefore they have extreme price elasticity, whilst also making the problem you're solving the most expansive version of the problem possible. The second you start charging for the fast delivery they're just going to go elsewhere. You're just acquiring really shitty customers.
The thing to learn from is Amazon, Amazon don't make money on delivery, it was a differentiator to attract customers to their shop which makes money, and it was built on top of a difficult but possible technical problem - building a much more efficient warehouse.
In my view, there's only 1 area where people will pay a premium for time, and that's food delivery, and everything else people will settle for a longer wait (really, we're talking here 15mins vs 24 hours). The smart thing to do maybe is to find a way to utilize the non-peak hours of the food delivery companies to do grocery delivery in a less time-sensitive, but cheaper way.
Delivery networks operate most efficiently with a mix of priorities of goods. That way, every time a truck moves, it is guaranteed to be full.
These apps seem to be trying to build a network of only high priority goods, which will never work. Their vehicles and workers spend most of their time moving with just a few items for just one customer. There's no way to make that cheap.
>> Their vehicles and workers spend most of their time moving with just a few items for just one customer.
This was the main reason many delivery apps/startups went under during the first dot com crash. Lots of VC money floating around with too little common sense. I'm puzzled why companies think "Oh no, WE can make this work now!" and are trying pretty much the same thing.
I thought we all learned this wasn't a profitable business model some 20 years ago?
Additionally, these startups play the good old game of "who has enough cash to stay afloat the longest" against each other since none have any technological or logistical advantages
"There's no way to make that cheap" doesn't lead to "will never work".
It means it's at most a niche product, but it surely can work. There are plenty of people that transport only high-priority products. But yes, those companies promising to do it cheap will fail.
I'm visiting Southeast Asia right now and Grab is a popular service.
It seems to me you can order anything (reasonable) from Grab, but it seems 95%+ of the orders are for food
I think the other thing that makes delivery here simple (and I'm guessing, profitable) is the proliferation of scooters. They're everywhere and everyone has one. I suspect decent gas mileage and simple to park convenience makes them the obvious vehicle for instant delivery.
It also helps to have a lower wage and higher unemployment rate.
In the US when you have Taco Bell paying $15/hr, you would need to pay a fair bit more for someone with a clean driving record and a car. And at that point, is it really worth $20 to get a single toy from the store?
I'm also in southeast Asia at the moment. Grab got big during the lockdowns and over the past few years of the pandemic. You would see the Grab-branded motorbike riders everywhere. But now it seems like I don't see them on the street as much anymore because they've hit a big speed bump: fuel costs for the motorbikes. As long as fuel was relatively cheap they could get employees here, especially since there's high unemployment, wages are low, and there are not a lot of jobs in provincial towns. But now they're struggling to scale.
I think it's because everyone in SEA has a scooter, so using Grab Taxi isn't super important. Although, I do see it used more often at night, for going out.
But Grab Food, Grab Mart and so on are spectacular services, and I find them way better and faster than Uber Eats in many places.
> The promise is always a nonsensical "You can have anything you want from anywhere you want, faster than is reasonably possible".
Importantly, this kind of infrastructure quickly leads to bottlenecks because of hot zone times. Amazon with their 'overnight' delivery has got it right, having drivers do delivery in extreme early hours when they have to confront rather little traffic. Well, I guess it's good for everyone except the drivers who are forced to lead an unhealthy nocturnal lifestyle :(.
> I think the interesting thing about these start ups is how ambitious they are. The promise is always a nonsensical "You can have anything you want from anywhere you want, faster than is reasonably possible". I'm surprised that there isn't a bigger focus on the actual technical limitations of what is possible.
A lot of people would reject that focus on limitations and realism as "negativity" and maybe even get hostile. It's stupid, but it might have been how we got to where we are.
> I think the interesting thing about these start ups is how ambitious they are.
They have to, to satisfy investors.
Investors have declared rapid delivery to be a winner-takes-all market, where the winner captures the customers through an app (customers can only have so many apps on their phone, and prefer to use a single app for their rapid delivery needs). So rapid growth is the only option. Grow or die. That's why we see so many of these startups going down.
I really doubt that take. Then again I'm extremely price sensitive customer... And will always look at cheapest option or even pass if the delivery is a few euros more... And I can't be only one.
Very few people need many groceries within 15 minutes (or several hours or even same day).
What I am surprised we have not yet seen is "Trader Joes online". Not for Trader Joes to do it (they seem disinterested and very focused on an in-store experience/model). But for some startup or legacy company to make such an offering. Limited SKUs, terrific value, optimized for online ordering/storage/deliervy, etc.
There are a number of subscription grocery delivery companies in the UK that work on a fixed delivery day model. i.e. you sign up and based on your address you're given a day that all deliveries will happen on.
This works by having fixed routes, known ahead of time, which optimise for local driver knowledge (it's supposed to be the same driver every week), and therefore can afford to be really quite cheap for delivery.
I like the model and I'd like to see it applied to more types of food delivery.
If you are talking about actual Trader Joe's stock, I suspect you'd be locked up in a lawsuit pretty fast. IIRC, they (TJ's) successfully shut down a store-front operation like this in Vancouver (or some other Canadian city?) by a mix of lawsuits and identifying all the buyers then banning them - game of whack-a-mole but one they were willing to play. You could argue no harm as they didn't even operate or plan to operate in the country (and I think they did argue that).
Because it's not about starting out with a sustainable business model.
It's about taking a massive wad of cash and using it to block other entrants into your marketplace. Keep out competition as long as possible, and then once no one is looking, raise prices.
People will pay a premium for non-food items that they need today. For example: you’re hosting a party and have run out of wine or plastic cups or a wine ipener or whatever.
Tampons, toilet paper, razors, diapers, etc. are also things people often need right now and can’t easily get them (any parent with young children knows how much it sucks to run out of something at a point where the child is asleep - do you wake them to go to the store?)
Even random stuff like home improvement items - it really sucks to be covered in paint and then realize you need some sandpaper or whatever - having to clean off and go to the store in the middle if a project is a real pain.
Well people will pay premium as you describe but those are very few people. For vast number of middle class folks all these things are basic planning.
I am surprised, with all the notes / planning/ calendar/ reminder software being there along with incredible array of personal devices to store them, people can't combine these basic requirements with regular store trips.
That sounds good on paper but doesn’t work in reality.
To deliver products quickly, you need inventory close at hand, aka “dark stores”. To justify the massive upfront investment in dark stores, you need either need massive volume, or you need high average order value.
Massive volume doesn’t work because rapid delivery is niche and delivery fees means that people can’t use them as frequently. Plus, dark stores simply can’t carry enough inventory to do large volumes.
The only option is to increase the average order size. But because dark stores carry limited inventory, you can’t upsell much.
You are describing bad planning as emergencies. They are just bad planning and there is a cost associated with it. That cost is not reflected in the price paid, so these startups run at a loss.
>Even random stuff like home improvement items - it really sucks to be covered in paint and then realize you need some sandpaper or whatever - having to clean off and go to the store in the middle if a project is a real pain.
How many people are going to pay $25 or whatever to get that sandpaper delivered?
Many technical innovations went into Amazon warehouses. They pioneered random placement of items to load balance the aisles and workers, and rely more heavily on robotics than previous warehouses did. These things weren't feasible in the mid 90s.
I suspect the reason it is so terrible to work at one is that designing a fulfillment scheduling algorthm that can handle 10% variance in human throughput is really hard. (The main complaints the workers have involve bathroom breaks!)
They realize they are running out of people they have not burned out yet, and are looking into fixing it before exhausting the entire US labor pool, so clearly they've created a massive quality of life issue for the workers.
All those platforms sound nice when you are on the receiving end of things and not the one delivering. I used to go to a local McDonald's in London once in a while and when you see 15 Deliveroo guys queuing up with helmets, completely exhausted and miserable, then you realise the cost of that burger being delivered whilst you sit on a sofa. Or Amazon prime delivery, where the guy has to do so many drop offs that he literally runs from the van to your apartment...
Just to push back against this view a bit with one anecdote -- I'm still in contact with an ex-colleague of mine, who I used to work with in retail. He now works for various delivery apps. And according to him it's vastly superior to any retail job he worked previously and whenever I mention any of the negative press these apps receive and query for his opinion he usually just rolls his eyes. He gets to control when and how long he works, he gets to ride his bike (which he loves) and pay is much better than any retail job he would get in london (and he would be looking at retail manager considering his experience).
So in that picture of local McDonald's in London, consider that perhaps those guys are actually much happier than everyone else working in that store (including the McDonald's managers).
Obviously that's just an anecdote of one person, I don't actually have a strong opinion on this.
...until the day he gets injured, bike stolen, etc etc etc - and these jobs are also unsustainable because they're not saving enough for retirement, i.e. when your body is no longer able to compete with younger bodies.
I absolutely believe what your ex colleague says/thinks of his job is exactly what he means, however he's comparing it with a retail job,which,in most cases are pretty crap. I also understand that even if the job may look crap, it can still be a huge improvement for the person who's doing the job. I've done enough crappy and good jobs in my life to know the difference, but I appreciate not everyone would have such a perspective.
delivery guy i know has to, well, deliver and thete was nowhere to lock the bike. bike got stolen, 1 grand down the drain. he us borrowing a bike from a friend as otherwise he can't earn
My (now ex) brother-in-law had to pivot from waiting tables to a delivery job. A positive benefit for him is that when he has the kids, he can bring them along and spend some time with them.
That’s something that you’d take for for granted if you work at a laptop all day.
That job is arguably nicer than e.g. flipping the burgers or cleaning the kitchen at that McDonald's. The service industry has a lot of hidden jobs performed by hard working people that just aren't very glamorous. We're in a market with very low unemployment rate: people can choose what they do within some reason. Lots of people are choosing to take gigs like this rather than work as a dishwasher, or waiting tables. IMHO that's basically people voting with their feet.
Of course things in the US are a bit worse than in Europe. People have to work multiple jobs there just to pay the rent. That shitty job at McDonald's is not enough. So you have fully employed people that do that that find it necessary to take some gigs on top of that because their regular job just isn't paying enough. That's not the gig economy that caused that; something else was broken there long before that became a thing. Like the lack of a minimum wage, the erosion of the middle class, etc. Things looked pretty grim the last time I visited San Francisco. Abject poverty right next to extreme wealth. Whatever caused that, it's not Uber or delivery companies.
Here in Berlin, Uber drivers are just normal taxi drivers. There are a lot of people on bikes delivering stuff and they seem to be OK with that. Seems popular with mostly younger people. And of course Amazon Prime and other deliveries are a huge thing here as well.
The gig economy is definitely putting some pressure on the social insurance system and some countries are better than others at forcing these companies to treat their people fairly. Unions certainly don't like it that there people earning money outside of sectors they control. But overall, I think it's a system that could work longer term and not just a fad. We just need to figure out how to get these people insured against the inevitabilities in life: sickness, retirement, and unemployment.
This is not a fast-delivery problem though, this is a governmental/cultural problem.
If we could have fast delivery with rested, happy workers, then I see no problem with the fast delivery itself.
The question is, why are people doing these jobs if they are exhausted and miserable? Is the pay good? Are the (flexible?) working hours better than elsewhere? Why is it preferable to other jobs?
This is the big issue. All of these "businesses" ignore the human cost and just assume an exploitable population begging to not lose their housing.
This is a problem that exists all the way through the product lifecycle with these services and leads to GrubHub offering free lunches in NYC but not telling any restaurants so an already stretched to breaking industry gets slammed with no warning.
All these companies are designed around an exit not a viable business.
Regulators are fighting back though, which some of these companies also note as a reason for getting out of the market. In the Netherlands Amsterdam is banishing dark stores from residential zones, one or two of these locusts specifically mentioned that development upon suspending their efforts.
This sounds like a moral concern? Lazy people who want a burger should be required to walk down and get it themselves? I mean, it's not like this is some kind of new thing, where people with money choose to pay other people to do some unpleasant bit of work they themselves don't want to do.
Surely the whole point of these delivery unicorns with insanely non-functional economics was always to appear to demonstrate rapid growth in order to bilk the greater fools in the investment market, never to realistically make it in the real world. I confidently predict that when this market squeezes out the greater fools (leaving fewer and more conservative investors), any delivery companies that haven't heavily adjusted their logistics and economics to reality (and still kept enough paying customers to validly continue to exist), will be defunct. Which will be most all of them.
Anecdotally, most of these startups also don’t seem to have a frugal culture. Which is fitting because they came about in an era of easy money.
People don’t talk enough about Amazon and its culture of frugality. If Amazon wasn’t a frugal company right from the very get go, I doubt it would have survived the dot com crash.
From European perspective it seems massive spending on every level. Losing money on product itself, very high pay, very high head count and so on... But then again I don't just understand software business.
Isn't this just another race to become the dominant party in any given market? Not to dupe investors, but to burn money until the competition has folded. They want to be the next Uber or Airbnb, and will break laws and regulations to get there. It's easier to negotiate with lawmakers when many consumers find you indispensable.
I either need something really quick, or I can wait. If I need something really quick, they basically need to be very close to me. If they are close to me, I can be just as quick myself. These service only work in dense urban areas. I have 3 supermarkets in 5 minute walking distance.
The non-rapid delivery service in the other hand is a godsend - that's how I got me food when I had COVID. And I guess there are a lot of people sick, injured, old or somewhat indisposed for which this service can be a real life saver. In these situations, I'm also happy to pay for this kind of service.
The rapid delivery part of it always made me feel bad for the delivery people. One time I happened to wait for the delivery on the stairs, he took 15 minute instead if 10 minutes, I was enjoying the sun in the meantime. He apologized for being late and was really stressed about it.
I think they're trying to rewire teen/young adults brain to reach for them before even thinking to step out.
Kind of like food delivery companies do/did. I know people who get pizza delivered from literally 50 meters from their front door. Or buy basic pasta with tomato sauce/cheese for 15 euros when you can do the same thing at home for 15% of the price and 15% of the time
Don't forget that it literally buys you time. Even if the pizza place is 50m from your door, you still have to put on clothes, wait in line to order and then wait for the pizza to be ready. Delivery on the other hand takes 1 minute out of your day.
If you have kids, time is worth a lot.
Pizza is simple enough that you can easily make it at home and it would probably be better and cheaper than delivery chain quality. But this will take even more time.
I can confirm this happens. I used to cook, but even when I didn’t cook I would make a simple sandwich or pasta sometimes. But a huge number of people have forgotten how easy it is to prepare something simple since they became reliant on these apps.
It makes perfect sense when you need something quick, but can't leave the home.
Eg, you're working from home, cooking your own food, but are missing something. You have enough of a lunch break to cook something simple like pasta, but not enough to run to a shop, buy, then cook the pasta. Ordering it online means you can keep on working while it's coming.
Another scenario is where something else is expected to arrive. Eg, you have an important package from Amazon coming. You don't want the delivery person to try leave $2000 worth of hardware on your porch, so it's not comfortable leave the house for food.
Or when you have another schedule to keep. I have regular meetings with a trainer, and on those days it's great to have predictable deliveries, rather than "during the day".
Or you can buy an extra bag of rice and a few tomato sauce cans for these rare events instead of paying $15 for $2 worth of groceries
My grandparents had full time jobs and five kids, they managed just fine. This is a first world problem coupled with an edge case you can easily avoid
> You don't want the delivery person to try leave $2000 worth of hardware on your porch, so it's not comfortable leave the house for food.
Delaying or skipping a meal never killed anyone.
I feel like people completely lost their mind and make up semi fake scenarios to justify their crazy way of life. Either way I don't see how it justifies a multi billion $ industry
> You have enough of a lunch break to cook something simple like pasta, but not enough to run to a shop, buy, then cook the pasta. Ordering it online means you can keep on working while it's coming.
Or you could do what most sane people do and buy the pasta and sauce in advance so you can prepare it whenever you want, for a fraction of the cost. Dry pasta and bottled sauce last approximately forever, so it's easy to keep an inventory at hand.
The problem with a lot of these services, at least in western countries, whether rapid delivery of low profit goods, refrigerated meal kits, laundry pickup and delivery, and for that matter housekeeping, etc. is that most middle class-ish people are not willing to pay what it costs as a percentage of their own income. Some things work on the margins in dense enough areas and other things people will pay for as something of a luxury but for the most part it doesn't work, especially as a VC-scale business with a bunch of expensive engineers and other employees.
I consider my not-frequent-enough housekeeper sort of a splurge. I definitely wouldn't have them if I had to be paying the cost of a back-end business as well.
It is kinda middle-class trap in West. You earn how many times what lower-class service worker earns? 2-3x? Maybe 5x. Now your taxation and living cost take what at least half? Meaning that on low end for hour you worked you can maybe pay hour of someone else work. And hi-end maybe 3?
The math just doesn't look too good. And thus actual market is pretty small making it even worse as now the person you are hiring doesn't have full utilization.
Right. Even at 5x, that would be 20% of your pre-tax income to full-time employ someone which wouldn't be sustainable for most people. Even if you're paying out more per hour, it makes far more sense to have a lawn service come by every couple of weeks, get a cab or schedule a limo, etc. Of course, modern lifestyles and automation require much less of the Downton Abbey levels of staffing.
> most middle class-ish people are not willing to pay what it costs as a percentage of their own income.
Especially when the economy starts to studder. I used to rideshare and do food delivery fairly regularly when times were good, but I cut it all out as soon as I started reading about layoffs and I'm sure I'm not the only one.
A common characteristic of a lot of delivery services--as well as lot of content subscription services, etc.--is that, for most people, they're pretty optional. As you suggest, they're probably among the first things that people will trim if they're looking to cut costs.
Another factor to consider is that the economics make more sense in a dense environment. Most Americans are 10~20 minutes (by car) from the nearest pizza, whereas most Koreans are only 5 minutes from the restaurant (by motorbike). The difference in delivery prices is a full order of magnitude. (Food delivery in Seoul adds about $2 to the bill at current exchange rates.)
In my opinion these are the three things that can't really be all achieved under current technology/infrastructure: cheap delivery, fast delivery, and delivery workers that are not miserable.
The illusion of all three being achieved at some point is because they are running at a loss of VC's investment money. Eventually investors will demand profitability, and one of the following happens: fees go up, deliveries get slower, workers become miserable.
This is also what bothers me with this new "hire others to run errands for you" industry. These are things you might find bothersome (go out to buy food, buy groceries, etc), but their perceived value as compared to the things you're buying is so incredibly small, that any "fair" compensation for the person doing it would discourage most people from paying for the service in the first place.
At its core, the amazement of "wow, the delivery of my groceries is so fast and cheap" is not at the shiny technology that makes it possible, but rather the amazement at "wow, there are people willing to do this for such a small amount of money".
I think you could get all three (the holy trinity) in some cases - but those would be pretty small areas (think: the five-ten minute walkable area around a grocery store - basically the distance you could get a bagger to run something over to you on his break for a fiver if you knew them well).
Once you're trying to pay for gas, maintenance, capital expense on a vehicle even if it is scooter, you're going to have to have delivery charges that rival the cost of what is being delivered.
Dominos perfected it (though they also depend on "customer tips" to offset the delivery costs for the driver); I'm not sure groceries are a high-enough margin business to sustain it for the long run (outside of perhaps a mile or so around a grocery store).
I like how the big grocery chains in the UK handle this.
you book a 1 hour slot. and get your deliveries delivered in that slot. Tesco drivers are always happy, they don't seem exhausted because I reckon delivery conditions tend to be better compared to the Deliveroo / startup guys.
in the US I reckon it's the same with HEB pickup compared to instacart
In Canada (well, Vancouver), big box deliveries are handled by scheduling a day and being given a four hour window on that day when the delivery might be made. The actual time is frequently within that window, but often enough not that the selected day (typically a weekend day) is kind of a lowkey on-duty day for you because you have to make sure you’re available to let them in when they could buzz anytime. The system works, but like most systems, it presses against the customer’s annoyance threshold for slack in the system.
What you describe above is how Amazon Fresh schedules deliveries too. I know that regular Amazon delivery drivers are notoriously overworked and stressed out; I have no idea whether Amazon Fresh delivery (which seems to be mostly regular people in their own vehicles, rather than liveried Sprinter vans) is a better job. Hope so. But, there may be more to it than just the schedule.
In the Netherlands, these services tried to disrupt the supermarket market by basically ignoring zoning laws. As the externalities dark stores create have been disrupting enough for residents to complain en masse, cities are clamping down hard. Which means that 15-minute delivery promise is increasingly impossible to achieve.
It isn't. Most places in the Netherlands - and definitely in larger cities - are rarely more than 10-minute stroll from any grocery store. Anecdata, but as an example there are four supermarkets within a 10-minute stroll from my place of residence, and about two dozen smaller grocery stores.
However, the cities are arguing that dark stores aren't actually stores. You can't buy anything by going to them. The cities argue they are distribution centers. And distribution centers are not typically located in quiet residential areas.
Noise. Trucks, delivery guys having their breaks, and so on. Dutch residential areas are quiet and densely populated, and designed to be comfortable for the residents. Dark stores are about as attractive as neighbours as pubs.
It's not a grocery store, it's a dark store. I.e. just a small warehouse of food that has delivery drivers coming and going 24 hours a day to make local deliveries faster.
If you read some prior discussions on this you'll find that in many cases the people operating them are disruptive to the neighborhood and really aggressive towards anybody who dares complain about it. So it gets escalated to the city and eventually they clamp down. As they should.
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By making your offering "You can have anything" you draw in a load of customers who are ordering things that actually aren't that urgent, and therefore they have extreme price elasticity, whilst also making the problem you're solving the most expansive version of the problem possible. The second you start charging for the fast delivery they're just going to go elsewhere. You're just acquiring really shitty customers.
The thing to learn from is Amazon, Amazon don't make money on delivery, it was a differentiator to attract customers to their shop which makes money, and it was built on top of a difficult but possible technical problem - building a much more efficient warehouse.
In my view, there's only 1 area where people will pay a premium for time, and that's food delivery, and everything else people will settle for a longer wait (really, we're talking here 15mins vs 24 hours). The smart thing to do maybe is to find a way to utilize the non-peak hours of the food delivery companies to do grocery delivery in a less time-sensitive, but cheaper way.
These apps seem to be trying to build a network of only high priority goods, which will never work. Their vehicles and workers spend most of their time moving with just a few items for just one customer. There's no way to make that cheap.
This was the main reason many delivery apps/startups went under during the first dot com crash. Lots of VC money floating around with too little common sense. I'm puzzled why companies think "Oh no, WE can make this work now!" and are trying pretty much the same thing.
I thought we all learned this wasn't a profitable business model some 20 years ago?
So for the upper 5% of Sao Paulo, this might fly.
A lot of places like that.
It means it's at most a niche product, but it surely can work. There are plenty of people that transport only high-priority products. But yes, those companies promising to do it cheap will fail.
I'm visiting Southeast Asia right now and Grab is a popular service.
It seems to me you can order anything (reasonable) from Grab, but it seems 95%+ of the orders are for food
I think the other thing that makes delivery here simple (and I'm guessing, profitable) is the proliferation of scooters. They're everywhere and everyone has one. I suspect decent gas mileage and simple to park convenience makes them the obvious vehicle for instant delivery.
In the US when you have Taco Bell paying $15/hr, you would need to pay a fair bit more for someone with a clean driving record and a car. And at that point, is it really worth $20 to get a single toy from the store?
But Grab Food, Grab Mart and so on are spectacular services, and I find them way better and faster than Uber Eats in many places.
Importantly, this kind of infrastructure quickly leads to bottlenecks because of hot zone times. Amazon with their 'overnight' delivery has got it right, having drivers do delivery in extreme early hours when they have to confront rather little traffic. Well, I guess it's good for everyone except the drivers who are forced to lead an unhealthy nocturnal lifestyle :(.
A lot of people would reject that focus on limitations and realism as "negativity" and maybe even get hostile. It's stupid, but it might have been how we got to where we are.
We would've had this the entire time if we didn't have minimum wage laws, that these companies are skirting.
They have to, to satisfy investors.
Investors have declared rapid delivery to be a winner-takes-all market, where the winner captures the customers through an app (customers can only have so many apps on their phone, and prefer to use a single app for their rapid delivery needs). So rapid growth is the only option. Grow or die. That's why we see so many of these startups going down.
What I am surprised we have not yet seen is "Trader Joes online". Not for Trader Joes to do it (they seem disinterested and very focused on an in-store experience/model). But for some startup or legacy company to make such an offering. Limited SKUs, terrific value, optimized for online ordering/storage/deliervy, etc.
This works by having fixed routes, known ahead of time, which optimise for local driver knowledge (it's supposed to be the same driver every week), and therefore can afford to be really quite cheap for delivery.
I like the model and I'd like to see it applied to more types of food delivery.
(disclaimer: work for DoorDash, but in an unrelated org)
It's about taking a massive wad of cash and using it to block other entrants into your marketplace. Keep out competition as long as possible, and then once no one is looking, raise prices.
(Honestly, it seems kind of short-signed to me.)
Tampons, toilet paper, razors, diapers, etc. are also things people often need right now and can’t easily get them (any parent with young children knows how much it sucks to run out of something at a point where the child is asleep - do you wake them to go to the store?)
Even random stuff like home improvement items - it really sucks to be covered in paint and then realize you need some sandpaper or whatever - having to clean off and go to the store in the middle if a project is a real pain.
I am surprised, with all the notes / planning/ calendar/ reminder software being there along with incredible array of personal devices to store them, people can't combine these basic requirements with regular store trips.
To deliver products quickly, you need inventory close at hand, aka “dark stores”. To justify the massive upfront investment in dark stores, you need either need massive volume, or you need high average order value.
Massive volume doesn’t work because rapid delivery is niche and delivery fees means that people can’t use them as frequently. Plus, dark stores simply can’t carry enough inventory to do large volumes.
The only option is to increase the average order size. But because dark stores carry limited inventory, you can’t upsell much.
"Just in time life" is a bad idea.
How many people are going to pay $25 or whatever to get that sandpaper delivered?
Amazon did not solve this via technical means. Amazon relies on worker exploitation for this.
I suspect the reason it is so terrible to work at one is that designing a fulfillment scheduling algorthm that can handle 10% variance in human throughput is really hard. (The main complaints the workers have involve bathroom breaks!)
They realize they are running out of people they have not burned out yet, and are looking into fixing it before exhausting the entire US labor pool, so clearly they've created a massive quality of life issue for the workers.
delivery guy i know has to, well, deliver and thete was nowhere to lock the bike. bike got stolen, 1 grand down the drain. he us borrowing a bike from a friend as otherwise he can't earn
That’s something that you’d take for for granted if you work at a laptop all day.
Of course things in the US are a bit worse than in Europe. People have to work multiple jobs there just to pay the rent. That shitty job at McDonald's is not enough. So you have fully employed people that do that that find it necessary to take some gigs on top of that because their regular job just isn't paying enough. That's not the gig economy that caused that; something else was broken there long before that became a thing. Like the lack of a minimum wage, the erosion of the middle class, etc. Things looked pretty grim the last time I visited San Francisco. Abject poverty right next to extreme wealth. Whatever caused that, it's not Uber or delivery companies.
Here in Berlin, Uber drivers are just normal taxi drivers. There are a lot of people on bikes delivering stuff and they seem to be OK with that. Seems popular with mostly younger people. And of course Amazon Prime and other deliveries are a huge thing here as well.
The gig economy is definitely putting some pressure on the social insurance system and some countries are better than others at forcing these companies to treat their people fairly. Unions certainly don't like it that there people earning money outside of sectors they control. But overall, I think it's a system that could work longer term and not just a fad. We just need to figure out how to get these people insured against the inevitabilities in life: sickness, retirement, and unemployment.
If we could have fast delivery with rested, happy workers, then I see no problem with the fast delivery itself.
The question is, why are people doing these jobs if they are exhausted and miserable? Is the pay good? Are the (flexible?) working hours better than elsewhere? Why is it preferable to other jobs?
This is a problem that exists all the way through the product lifecycle with these services and leads to GrubHub offering free lunches in NYC but not telling any restaurants so an already stretched to breaking industry gets slammed with no warning.
All these companies are designed around an exit not a viable business.
People don’t talk enough about Amazon and its culture of frugality. If Amazon wasn’t a frugal company right from the very get go, I doubt it would have survived the dot com crash.
It doesn't seem to work out here though.
So it's still entirely based on a greater fool theory of economics.
I either need something really quick, or I can wait. If I need something really quick, they basically need to be very close to me. If they are close to me, I can be just as quick myself. These service only work in dense urban areas. I have 3 supermarkets in 5 minute walking distance.
The non-rapid delivery service in the other hand is a godsend - that's how I got me food when I had COVID. And I guess there are a lot of people sick, injured, old or somewhat indisposed for which this service can be a real life saver. In these situations, I'm also happy to pay for this kind of service.
The rapid delivery part of it always made me feel bad for the delivery people. One time I happened to wait for the delivery on the stairs, he took 15 minute instead if 10 minutes, I was enjoying the sun in the meantime. He apologized for being late and was really stressed about it.
Kind of like food delivery companies do/did. I know people who get pizza delivered from literally 50 meters from their front door. Or buy basic pasta with tomato sauce/cheese for 15 euros when you can do the same thing at home for 15% of the price and 15% of the time
If you have kids, time is worth a lot.
Pizza is simple enough that you can easily make it at home and it would probably be better and cheaper than delivery chain quality. But this will take even more time.
Eg, you're working from home, cooking your own food, but are missing something. You have enough of a lunch break to cook something simple like pasta, but not enough to run to a shop, buy, then cook the pasta. Ordering it online means you can keep on working while it's coming.
Another scenario is where something else is expected to arrive. Eg, you have an important package from Amazon coming. You don't want the delivery person to try leave $2000 worth of hardware on your porch, so it's not comfortable leave the house for food.
Or when you have another schedule to keep. I have regular meetings with a trainer, and on those days it's great to have predictable deliveries, rather than "during the day".
My grandparents had full time jobs and five kids, they managed just fine. This is a first world problem coupled with an edge case you can easily avoid
> You don't want the delivery person to try leave $2000 worth of hardware on your porch, so it's not comfortable leave the house for food.
Delaying or skipping a meal never killed anyone.
I feel like people completely lost their mind and make up semi fake scenarios to justify their crazy way of life. Either way I don't see how it justifies a multi billion $ industry
Or you could do what most sane people do and buy the pasta and sauce in advance so you can prepare it whenever you want, for a fraction of the cost. Dry pasta and bottled sauce last approximately forever, so it's easy to keep an inventory at hand.
I consider my not-frequent-enough housekeeper sort of a splurge. I definitely wouldn't have them if I had to be paying the cost of a back-end business as well.
The math just doesn't look too good. And thus actual market is pretty small making it even worse as now the person you are hiring doesn't have full utilization.
Especially when the economy starts to studder. I used to rideshare and do food delivery fairly regularly when times were good, but I cut it all out as soon as I started reading about layoffs and I'm sure I'm not the only one.
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A 600sqft tiny warehouse space in Atlanta would be substantially cheaper than a similar space in Seoul.
The illusion of all three being achieved at some point is because they are running at a loss of VC's investment money. Eventually investors will demand profitability, and one of the following happens: fees go up, deliveries get slower, workers become miserable.
This is also what bothers me with this new "hire others to run errands for you" industry. These are things you might find bothersome (go out to buy food, buy groceries, etc), but their perceived value as compared to the things you're buying is so incredibly small, that any "fair" compensation for the person doing it would discourage most people from paying for the service in the first place.
At its core, the amazement of "wow, the delivery of my groceries is so fast and cheap" is not at the shiny technology that makes it possible, but rather the amazement at "wow, there are people willing to do this for such a small amount of money".
Once you're trying to pay for gas, maintenance, capital expense on a vehicle even if it is scooter, you're going to have to have delivery charges that rival the cost of what is being delivered.
Dominos perfected it (though they also depend on "customer tips" to offset the delivery costs for the driver); I'm not sure groceries are a high-enough margin business to sustain it for the long run (outside of perhaps a mile or so around a grocery store).
you book a 1 hour slot. and get your deliveries delivered in that slot. Tesco drivers are always happy, they don't seem exhausted because I reckon delivery conditions tend to be better compared to the Deliveroo / startup guys. in the US I reckon it's the same with HEB pickup compared to instacart
However, the cities are arguing that dark stores aren't actually stores. You can't buy anything by going to them. The cities argue they are distribution centers. And distribution centers are not typically located in quiet residential areas.
If you read some prior discussions on this you'll find that in many cases the people operating them are disruptive to the neighborhood and really aggressive towards anybody who dares complain about it. So it gets escalated to the city and eventually they clamp down. As they should.