Food delivery is simply a terrible business. People must have seen how much waiters on wheels charges, and how much pizza places charge and said if we get costs down to pizza delivery and charge less than waiters on wheels, we'll make a bunch of money.

The problem is restaurants with enough delivery volume to justify their own delivery service can send a driver out with several orders, and can schedule the next round of orders to be ready just as the driver gets back. That's hard to do in the order whatever from wherever model, and one order per delivery run ends up with costs high enough that a lot of people would rather pick things up themselves.

The lure of more business for local restaurants. An uptick in orders and free advertising could certainly help!

The lure of a weekend job for drivers. I've done it and made out pretty well on my motorcycle for a few hours on the weekend.

consumers love apps and they love being able to have visibility into the status of their orders. They want to shop online for food and have it appear without of phone call, or to discover new restaurants around them. Sometimes they have favorite sit down restaurants that aren't take out spots - but know they might have a listing on a fancier food delivery service.

App creators: take a cut off of everything on the top without actually inventing or doing anything. A logistics company elsewhere caught charging this much would be laughed out of the room but in a new and exciting field there's a lot of room for markup.

Cheers!

> A logistics company elsewhere caught charging this much would be laughed out of the room but in a new and exciting field there's a lot of room for markup.

I would argue that they are also the owner of many of the customers. DoorDash owns me as a customer simply because when I am hungry, I turn on the app and select from one of the offerings.

Grubhub’s CEO said on an earnings call that customers are “promiscuous” and not demonstrating loyalty to a single dining app, so while you have your anecdote, it doesn’t appear to apply across larger sample sizes.

https://www.reuters.com/article/us-grubhub-results/grubhub-b...

Sure, but are they also promiscuous about ordering from the restaurants themselves or just across apps?

I am also promiscuous across apps (DoorDash just because I got the DashPass for during the pandemic), but it has been years since I ordered anything other than pizza directly.

So the industry as a whole just owns the customers rather than the restaurant.

I have a bit of a different take on things than you're voicing.

Right now we have a bunch of (dine-in restaurant) businesses whose models have been disrupted by both the pandemic and government action; many of these restaurants have responded by emulating an adjacent type of business (delivery restaurants). The real problem is that the dine-in restaurants have a cost structure which does not allow them to compete with the delivery restaurants. Dine-in restaurants rely on fewer customers with higher average bills, and more profitable items on orders (especially liquor). Dine-in restaurants also have expensive facilities, due to rent, tax, and maintenance expenses.

You cannot successfully transform a dine-in restaurant into a delivery (or take-out) restaurant by simply putting the food in bags.

> a search for profit

You may search, but you may not find. Usually the problem a business faces is that nobody wants what they are selling.

In this case, there is the very interesting element of an enormous number of people wanting the product, but only at a money losing pricepoint.

I think the famous line is “the market can remain irrational longer than you can remain solvent”.

Fact: They can’t lose money forever.

It's venture capitalism, I guess. Enough cash became available for high-risk, high-reward ventures at a massive scale. The result has been this experimentation with platforms that undercut competitors using VC cash and have some vague plan to make a profit in the future when they've grabbed all the market share. In the meantime, plenty of individuals are making money off the scheme, while the competing businesses and the shareholders left holding the bag at the end will be the ones screwed.