# article: Food Delivery Looks Like Another Gig-Economy Dead End



## jeanocelot (Sep 2, 2016)

https://www.bloomberg.com/opinion/a...a-dead-end-for-grubhub-doordash-and-postmates


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## Uberdriver2710 (Jul 15, 2015)

jeanocelot said:


> https://www.bloomberg.com/opinion/a...a-dead-end-for-grubhub-doordash-and-postmates


pay wall:thumbdown:


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## jeanocelot (Sep 2, 2016)

Uberdriver2710 said:


> pay wall:thumbdown:


You need to delete the Bloomberg cookie. An easy way to delete any website cookie in Firefox is to click on the lock icon in the URL textbox, selecting the item "Clear cookie and site data ...", and then after a dialog pops up, you hit the "Remove" button, and then refresh.


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## Uberdriver2710 (Jul 15, 2015)

I just consulted with Mr. Cook E. Monster. He say, don't delete cookies.


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## Johnny Mnemonic (Sep 24, 2019)

Uberdriver2710 said:


> pay wall:thumbdown:


[Via Bloomberg]
As third-quarter earnings season rolls on, a paradox confronts the restaurant industry. On the one hand, restaurant companies are touting the rise of off-premise and digital sales, which includes delivery, as an increasingly important source of growth. On the other, GrubHub Inc. just announced disappointing quarterly results and said that food delivery is only a means to an end, unlikely to ever be profitable on its own. The risk heading into 2020 is that the inevitable reckoning for the food-delivery businesses will spread to the broader restaurant industry.

Restaurants have based much of their recent growth on consumer deliveries and rely heavily on just four companies - GrubHub, DoorDash Inc., Postmates Inc. and Uber Eats - which combined have about 95% of the market. That's what makes GrubHub's latest quarter so ominous. In a letter to investors, it said it didn't believe "that a company can generate significant profits on just the logistics component of the business." In other words, delivery will always be a low-margin business at best. GrubHub also reported some troubling trends: new customers tend to order fewer deliveries than earlier users; customers are losing their brand loyalty, and are more willing to switch to rival services; and those rival services now tend to offer delivery from a wider ranges of restaurants than GrubHub. All told, the bottom line was net income of just $1 million versus $22.7 million in the same period a year ago.

But GrubHub also made the argument that its value to restaurants lies in its potential as an online advertising partner, and that delivery services are really just a vehicle for generating ad sales.

This should not be reassuring news for DoorDash and Postmates -- which have almost half the market for meal delivery -- their investors, or their restaurant partners. The context, of course, is that GrubHub, which actually is profitable, says that meal delivery isn't where the money is. So where does that leave DoorDash or Postmates, both of which are unprofitable and have a sky-high combined valuation of $15 billion, based on rounds of private investment funding earlier this year? Both now must cope with the long odds of going forward with initial public offerings this year after the botched IPO of WeWork parent We Co. And why would anyone bother putting more money into those unprofitable companies when investors can simply buy shares for much less in GrubHub, which now has a market value of $3 billion?

It doesn't seem all that far-fetched to imagine these two companies undergoing the same kind of brutal retrenchment that WeWork is facing; reducing advertising spending, cutting coupons and incentives, raising prices and exiting unprofitable markets. Uber Eats, of course, is a slightly different case because it's part of a much larger operation, theoretically one with more access to capital. Yet it faces similar funding constraints; parent Uber Technologies Inc. is a huge money loser, its shares have declined by almost 30% since the company went public in May and investors are looking for signs of profitability.

If the food-delivery services start cutting back, it's likely to show up in restaurant earnings reports during the next several quarters. Just by way of example: On Tuesday evening in a conference call to discuss its latest quarterly results, Cheesecake Factory Inc. said that off-premise sales now comprise 16% of revenue, with delivery being 35% of that amount, or 5.6% of total sales. The company uses DoorDash for deliveries. If this relationship is typical, and there's every reason to think it is, it means restaurants are dependent on companies with a good deal of downside risk, in much the same way that owners of commercial properties are at risk from having WeWork as a major tenant.

For now, GrubHub's bad news has only hurt its own stock. But to the extent its warning proves prescient, the restaurant industry could be in for a painful 2020.


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## Launchpad McQuack (Jan 8, 2019)

Johnny Mnemonic said:


> ...the restaurant industry could be in for a painful 2020.


Boy was this spot on..........just not for the reasons that were anticipated.


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## tohunt4me (Nov 23, 2015)

Johnny Mnemonic said:


> [Via Bloomberg]
> As third-quarter earnings season rolls on, a paradox confronts the restaurant industry. On the one hand, restaurant companies are touting the rise of off-premise and digital sales, which includes delivery, as an increasingly important source of growth. On the other, GrubHub Inc. just announced disappointing quarterly results and said that food delivery is only a means to an end, unlikely to ever be profitable on its own. The risk heading into 2020 is that the inevitable reckoning for the food-delivery businesses will spread to the broader restaurant industry.
> 
> Restaurants have based much of their recent growth on consumer deliveries and rely heavily on just four companies - GrubHub, DoorDash Inc., Postmates Inc. and Uber Eats - which combined have about 95% of the market. That's what makes GrubHub's latest quarter so ominous. In a letter to investors, it said it didn't believe "that a company can generate significant profits on just the logistics component of the business." In other words, delivery will always be a low-margin business at best. GrubHub also reported some troubling trends: new customers tend to order fewer deliveries than earlier users; customers are losing their brand loyalty, and are more willing to switch to rival services; and those rival services now tend to offer delivery from a wider ranges of restaurants than GrubHub. All told, the bottom line was net income of just $1 million versus $22.7 million in the same period a year ago.
> ...


EVERY NIGHT HAS BEEN LIKE " GAME NIGHT" AT MY PIZZA STORES !

RUNNING WIDE OPEN FOR OVER 3 MONTHS.


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## KevinJohnson (Mar 23, 2020)

People will want food delivered for the next 18-24 months. This pandemic has changed the landscape. If delivery companies can cut overhead the profits are there.


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## Seamus (Jun 21, 2018)

Anyone can see that food delivery can't be profitable the way they are doing it. I once got $27 to deliver 1 milkshake, think about how much they lost on that. We all regularly get small dollar orders to deliver where the delivery pay is more than the order is worth. Don't need a degree from the Harvard School of Business to understand the losses in those transactions.

If they really want to make money they have to cut out the delivery of small dollar orders and charge a delivery fee. The problem they all have is when they aren't offering discounts or free delivery the customers order a lot less. I can tell every time the are giving out delivery promos because the amount of deliveries spike.


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## jeanocelot (Sep 2, 2016)

KevinJohnson said:


> People will want food delivered for the next 18-24 months. This pandemic has changed the landscape. If delivery companies can cut overhead the profits are there.





Seamus said:


> Anyone can see that food delivery can't be profitable the way they are doing it. I once got $27 to deliver 1 milkshake, think about how much they lost on that.


It seems that there should be a way to bundle orders so that an ant stops at a few places to pick up multiple orders and then goes to on a delivery route to the multiple destinations. Of course, once the autonomous delivery drones get going, the price for the current single point-to-point method will become very small as it it lot cheaper to fly a 10 pound drone.


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## Seamus (Jun 21, 2018)

jeanocelot said:


> as it it lot cheaper to fly a 10 pound drone.


Doubtful. You would have to actually buy, fly and maintain drones. Large Capital expenditure. Right now they get free use of a car and maintenance.


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## jeanocelot (Sep 2, 2016)

Seamus said:


> Doubtful. You would have to actually buy, fly and maintain drones. Large Capital expenditure. Right now they get free use of a car and maintenance.


But that drone is only going to cost a few hundred bucks, and the maintenance will be similarly cheap - much cheaper per mile than the federal rate for a car, and the distance will even be less as it will be "as the crow flies".


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## tohunt4me (Nov 23, 2015)

jeanocelot said:


> It seems that there should be a way to bundle orders so that an ant stops at a few places to pick up multiple orders and then goes to on a delivery route to the multiple destinations. Of course, once the autonomous delivery drones get going, the price for the current single point-to-point method will become very small as it it lot cheaper to fly a 10 pound drone.


Drone Injury Lawyer commercials.

They will flood t.v.
1-800- Sue Noww !


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