RSG157: Will Delivery Companies Ever Be Profitable?

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!

Listen to this episode on your phone here.

Panel Discussion

  • 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

Considerations

  • 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

Driver Goals

  • 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

Outro

  • 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!

Show Notes