I'd counter that Pizza hut has a key logistical advantage of vertical integration. A delivery service is a very different business than a restaurant chain that does its own delivery.

I agree that GrubHub, Doordash, and to some extent Uber seem bloated when considering the sum total of the markets they play in. That doesn't mean these business models aren't sustainable, though. Some companies allocate resources to a few areas that turn into profit centers, some don't. The ones that don't will be sold off or parted out. And the cycle will continue. I'd wager that one of these companies will survive and turn out to be a profitable, healthy business in the next few years. The rest will probably be sold off or slowly downsized.

More broadly, to your criticism of SV's investment strategy, resource allocation is a hard problem. If you want to direct large sums of capital at certain business verticals, do you want to grow slowly and steadily over a 20+ year period only to find that the economics don't work, or do you want to fail fast with some extra waste in the middle? Failing fast has some upside to it, though I understand why I consistently hear this criticism on this site. It feels like the last decade has seen the pendulum swing towards fast money and back a little. I don't think were as far off from a healthy middle ground as some might argue.

The traditional silicon valley approach would be to fund new ways of doing delivery. And behind the most click-worthy headlines, that is what is happening! [1].

[1] https://techcrunch.com/2020/04/09/starship-technologies-is-s...

I also don't think that food delivery is something that needs to happen at a global scale. The market is local enough that you can have one player for every city or region that can grow organically, charge lower rates, and be beneficial for everyone involved.

>Maybe food delivery services isn't solvable using the Silicon Valley method -- use insane amounts of rich people's money to subsidize product hyper-growth to only later monopolize said market to re-coop earlier losses.

I tend to agree, and also because I don't think food delivery can be easily decoupled from the preparation (for ready-to-eat orders). I mean, restaurants have done it profitably for ages, but whenever one of these SV companies tries it, I hear all kinds of stories about how, unless everything goes right, the whole process becomes tedious an frustrating.

Like, the order's wrong, and it has to restart through Uber's whole system. And the runners can't look inside to verify the order because (legitimate) health regulations. And it just ends with an unsatisfied customer who has some credit on the app.

But I do think there is a way to SV-ize food delivery, like if they could get economies of scale to work for food delivery. Imagine this:

A restaurant knows at least one customer needs their dish to start prep at 5:30pm. The website indicates they're starting one then anyway, so you get a discount for ordering the same food to start at the same time.

Meals can be batched easily -- it costs them much less than N times to scale up the order to N servings or customers.

Ditto for (in urban areas) delivering to the same building or block. If they only have to stop once, they can offer a discount to anyone ordering the same thing in the same building.

This is exactly the kind of thing where it pays to be a broad platform that everyone's on, and has kinds of monopoly profits, and provides legit consumer value.

(Disclaimer: I registered a domain name suitable for this kind of service but haven't otherwise advanced it.)

In reality, there is no choice between:

A) Silicon Valley-style hyper growth

or

B) Slow and steady growth

Choice B is not actually an option if you want to change human behavior and actually benefit from economies of scale. This is because of the nature of competition and the power of habit. If it takes you 20 years to go national, then competitors will have cemented themselves in each region you try to operate.

And because humans are creatures of habit, it will be ridiculously expensive to get them to change their behavior even if you offer a comparatively better service.

The Bay Area’s dual refusal of housing and transportation made the delivery apps necessary in the first place, so I agree it may not be a great place to look for a solution. If housing and retail space were more abundant there would be more options within my immediate area, and if transportation were better my “area” would be even larger than it is now with what’s comfortable to reach on foot.

Are you sure Dominos actually profits on the delivery itself, or do they just offer it at/below cost to sell more pizzas?

Dominos is famous for charging more for delivery than for takeaway. Their "$4 delivery" is no more accurate to the true cost of delivering a pizza than the "delivery fee" of their competitors.

I think it's not solvable with human delivery workers. Hopefully someone tries to do it with robots when we get there.