![]() ![]() Next, let’s break down how pricing works. For the purposes of this analysis, we also decided to add Caviar to the mix - a more “premium” option available in larger markets that was sold to Square in 2014 and is now owned by DoorDash. are DoorDash, Uber Eats, Postmates and Grubhub (which owns Seamless). The biggest names in food delivery apps in the U.S. To understand how the food delivery ecosystem prices the same items from the same restaurants so differently, we decided to do some research to see if we could shed some light on what you’re really paying for when you open that delivery app.īefore diving into the data, first let’s set the stage. The ultimate winners will be those companies that achieve profitability and market leadership through the delivery of not just food, but better products, better services and transparent pricing. ![]() In spite of the billions already invested into the food delivery sector by venture capitalists and massive growth projected in the years ahead, we believe that the industry is still in its infancy, and remains ripe for innovation. Buying stocks? Ordering a razor? Getting a prescription filled? From Robinhood to Dollar Shave Club to PillPack and beyond, today’s leading consumer companies have won through innovation and pricing transparency.Ĭompetition between delivery companies with billions in funding is fierce, and with so much of that capital going toward chasing top-line growth through promos, discounts and other give-aways, innovation on core product has fallen by the wayside. Over the past decade, we have seen a new wave of industry-leading technology companies emerge by focusing on innovation in otherwise commoditized markets, from financial services to consumer products. Aside from a handful of exclusive delivery partnerships with a few premium restaurants, consumers are instead faced with a delivery market where the services are virtually indistinguishable, yet the price they pay for exact same item from the exact same restaurant can vary by 20% or more depending on the app they use. In their quest to achieve profitability, today’s leading food delivery apps have thus far focused their innovation around new ways to charge consumers for the same items instead of innovating on differentiated products or services. And the implicit trade-off we all make as consumers is that we are willing to pay a little extra for the convenience of having things delivered to our doorstep.īut while consumers have signed on to pay a premium for convenience, the food delivery ecosystem suffers from a lack of differentiation, compounded by an opaque and confusing web of markups and fees. Thanks to technology (and VC funding) we can get a ride, laundry service, car wash and even booze or marijuana delivered to our home or office at the push of a button. With the food delivery sector rocketing toward a projected $365 billion by the end of the decade, I’m clearly not the only one turning to delivery apps even before the pandemic hit. With the growing coronavirus pandemic closing restaurants and consumers self-isolating, it is likely we will see a spike in food delivery much like the 20% jump China reported during the peak of its crisis. There are dozens of great dining options within a few blocks of my home, yet I still end up ordering food through delivery apps four or five times per week. ![]() I’ll admit it: When it comes to food, I’m lazy.
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