Business Wars Food Delivery Wars | Can Food Apps Ever Deliver Profits? | 5
Jun 21, 2021
Preetika Rana, a technology reporter at The Wall Street Journal, dives into the fierce competition in the food delivery app sector. She highlights how companies like DoorDash and Uber grapple with profitability despite soaring demand. Topics include the financial struggles due to high costs, the challenges of maintaining relationships with restaurants, and navigating regulatory hurdles. Preetika also sheds light on labor issues facing gig workers and the potential impact of automation on the future of the industry.
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Profitability Challenges
- Food delivery apps struggle with profitability due to high costs like restaurant fees, driver payments, and advertising.
- They aim for scale, hoping to become profitable by capturing a large market share.
Pandemic Impact
- The pandemic increased demand but didn't solve profitability issues, leading companies to explore other avenues.
- DoorDash and Uber Eats are expanding into grocery, convenience items, and alcohol delivery to increase basket sizes.
Uber Eats' Add-on Strategy
- Uber Eats plans to suggest add-on items from nearby stores during checkout to increase order values.
- This strategy aims to convert a $20 burrito order into a $70 order by adding groceries or other items.