> Delivery apps are an interesting industry because it seems that no one is making money.
There are a lot of potential industries that have to start out like this.
Suppose you have a downtown where there are a dozen restaurants within a few blocks of each other, and then customers in a residential area on the other side of town. If you try to hire someone to go pick up the food for one person and deliver it to one customer on the other side of town, it's totally hopeless and you'll never make any money.
But if you could get the same driver to pick up meals for a dozen people at once and then deliver them to customers who all live near each other, now you have a chance of turning a profit. That's a chicken and egg problem, because the first customer isn't going to pay the full price of the trip, so you have no first customer and never get enough business going to reach the level of efficiency required.
Now suppose they operate by burning VC money for a while until they get enough usage to turn a profit.
You've simplified the problem too much. If there was one central cafeteria and orders were limited to certain neighborhoods with largeish time windows, then maybe, but that is not really what it looks like. You can easily sign up to drive for one of these services and see the reality of it, but be prepared to stand around waiting for peoples' orders for around minimum wage once you factor in all the expenses and dead-heading time.
Frequently there is a section of town with a bunch of takeout restaurants in the same block. And people want to order takeout for lunch around noon and dinner in the early evening. The app could then assign drivers the customers in the same area as one another, if there were more of them.
The people making deliveries are doing unskilled labor. It was never expected to pay well. The question is if it can work at all.
The apps absolutely already do merge any orders they can. They can't control conditions at the restaurant or on the road however and so a lot of the job is really being a flunky and waiting in line and in traffic which are both quite high around lunch and early evening. It scales very poorly and you probably don't want your order sitting in someone's car for half an hour while they wait for another customer's order.
As far as paying well, I don't think that was ever really expected, but these companies just seem like losers for all but those who managed to cash out in the IPO.
All the food delivery riders I see have carrying capacity for 2 or 3 orders at most - there's no way it's a dozen. Most of the time I'm pretty sure they're only carrying a single order.
But how would they get to that sort of carrying capacity? They almost never use cars around here and I doubt it would be viable (parking issues, cost of vehicle ownership/maintenance etc.).
And if battery prices continue to decline, electric "motorcycles" (i.e. 3-wheeled cars) with low maintenance costs will be available for similar prices.
If that were a feasible option I'd think we'd be seeing at least some already in use (actually the postal service here does use vehicles not unlike that). They still take up a lot more space to park and are subject more to traffic congestion than the e-bikes/scooters actually used.
> If that were a feasible option I'd think we'd be seeing at least some already in use
First you'd need enough customer traffic to fill the vehicle. There is no point in buying a vehicle that can serve 12 customers if you never get more than 4 at once.
Space to park doesn't seem like a huge problem when they're making deliveries. The mail truck is bigger than these things. Buildings with tight parking commonly have a loading zone or a space with a 15 minute limit specifically for deliveries, and it's big enough for a light truck.
It absolutely is for pick ups though, many restaurants in our area have almost no parking available at peak times. The delivery riders just leave their bikes on the footpath/sidewalk.
Larger delivery vehicles can make use of loading zones but even then it'd only be feasible for a very small number of them. My point is there's no sign these delivery companies are expecting to be able to significantly educe costs by combining deliveries and using larger vehicles, and it's hard to see how it would be feasible.
There are a lot of potential industries that have to start out like this.
Suppose you have a downtown where there are a dozen restaurants within a few blocks of each other, and then customers in a residential area on the other side of town. If you try to hire someone to go pick up the food for one person and deliver it to one customer on the other side of town, it's totally hopeless and you'll never make any money.
But if you could get the same driver to pick up meals for a dozen people at once and then deliver them to customers who all live near each other, now you have a chance of turning a profit. That's a chicken and egg problem, because the first customer isn't going to pay the full price of the trip, so you have no first customer and never get enough business going to reach the level of efficiency required.
Now suppose they operate by burning VC money for a while until they get enough usage to turn a profit.