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Will delivery companies ever be profitable? That’s the million-dollar question going into 2021. In this episode, you’ll hear a replay from a conference I helped put on called Curbivore. I coordinated this panel and think you’ll find it fascinating, as we will cover how delivery companies could become profitable in the future… or not. This panel discussion may surprise you!
- Introduction to Amir, Vignesh, Peter, Kelly and Mark (Show Notes below for more information)
- Is there a clear path for delivery companies to make a profit?
- Examples around the world: China, for example
- Criticism is that delivery could be exploitative
- Size of a company does determine profitable, but it’s not that simple
- Flywheel system – more restaurants on an app, more customers, able to do more deliveries in shorter amount of time
- Is it exploitative? Larger conversation about the relationship of labor + companies
- Question also ignores how one career is not always enough – many people need gig jobs to make ends meet
Can Delivery Be Profitable?
- It will be very, very difficult
- Higher end customers – potential for profitability
- Unless there is a monopoly, it will be difficult for these companies to become profitable
Changes for Restaurants
- Pandemic upended everything for restaurants
- The opportunity to get more couriers in a restaurant, helps make up for lost revenue
- Restaurants have needed to become more creative and flexible – delivery is a part of that
- Drivers are looking for consistency, as much as possible
- Don’t necessarily want to deliver 4 orders at once, but goal is to deliver more in less time
- Opportunity for platforms to take earnings and subsidize the unprofitable orders
- Driver earnings must be low in order to provide cheaper costs to customers – customers unwilling to pay more for convenience, so drivers must accept less
The Future of Delivery
- Companies need to focus, not pivot to something new and shiny
- Comparisons with Amazon – things got cheaper over time instead of shifting dramatically
- Drivers don’t necessarily want to be jack of all trades, either
- Virtual dining concepts changes how restaurants will function, too – makes it easier for restaurants to focus on what they’re good at
- Thanks for listening to this Curbivore panel on delivery
- Make sure to follow Curbivore (links below) and sign up for our newsletter
- Planning big things for a Curbivore conference in 2021 – stay tuned!