Why I left Google to join Grab

Right now, what we have are the first generation of delivery restaurants which is basically "restaurants, only it's delivery". We won't start seeing the real revolution until we start seeing formats built natively around the assumptions of delivery. The second generation of "delivery, only it happens to be restaurants" format is going to look radically different from what we have today.

For example, right now, restaurants are naturally incentivized to disperse around the city to take advantage of foot traffic. But this turns logistics into a N x M challenge which is expensive. Delivery restaurants are instead incentivized to cluster together because 1 x M logistics is so much more efficient.

Once they cluster, further efficiencies can be unlocked. For example, right now, if there are 10 Asian restaurants in a block, each of them offers steamed rice and each of them owns a rice cooker. If you exist in a cluster and all your orders come from delivery, it no longer makes sense for you to be a "jack of all trades" restaurant, you can just have one restaurant make the 3 - 4 types of rice required for all Asian cuisines and it gets added on as a side for your order. Similar with like, mashed potatoes for Western restaurants, just have one restaurant focus on making the best damn mashed potatoes possible with all sorts of customized mixins and all the other restaurants don't have to deal with mashed potatoes. Prior to delivery restaurants, a "rice and mashed potatoes restaurant" would be totally non-viable. But with the disaggregating effects of delivery, it's now a possibility.

Probably the closest analogy I can think of is the Singaporean Hawker centers. Each stall is only responsible for making 2 - 3 things and they make the best damn version of that thing possible. America, for whatever reason, has never managed to produce truly decent food courts so it's a totally different paradigm.

On top of that, clustered delivery allows for the sharing of a lot of common infrastructure (HVAC, refrigeration, suppliers, dishwashing services, cleaning services, etc.) in a way that makes the entire enterprise more plug and play. Think AWS instead of dedicated servers. Rather than each kitchen having to hire a cleaning crew or worrying about what happens if the walk in is on the fritz, dedicated teams who specialize in each respective task can deploy it as a service scalably across the entire set of restaurants. Instead of incurring $X00,000 in startup costs, you can instead just lease at $X,000 a month and scale up your spend as you scale up your revenue.

All of this requires delivery as a format to get over certain scale humps so that efficiencies can start to be unlocked. But once they do (as they're currently reaching in Asia), we're going to start seeing much more interesting, innovative business models that take delivery as a premise and innovate from there.

Strictly speaking though, the rides aren't what is being subsidised by VC money, that is, the company aren't losing more money with each additional booking. The rates are pretty competitive with existing taxi business, and their entrance to a market hasn't exactly brought down ride prices.

I think most of the VC money are used on the "war" to gain dominance. Tech, marketing, lobbying, and such.

They have higher income as the number of jobs available through apps is orders of magnitude higher than was available before they came along. Parcel Delivery, Shopping, Food delivery - all in addition to the increase in regular commuters due to the superior service.

They are all burning through cash of course, as each attempts to increase market share of drivers and reduce prices for users.

I completely agree on how it will lead to innovations on the restaurant side. Sharing infrastructure and bringing down costs.

The question really is on the app side - today they might be in making say $X from 3-4 places serving steamed rice. But tomorrow as you pointed out this might reduce down to $x/3 because all 3-4 can band together to pay for the same delivery. It will affect the food delivery app's bottom line.

So, the question remains is - how do food delivery apps deliver long term profits from this?

So, working for an Uber clone that underpays its workers and exists to further enrich its billionaire shareholders is the most exciting thing this guy could find to do with his life? After already making millions off of his past career?

This is why people hate tech workers.