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Uber, Postmates Agree on $2.65B All-Stock Deal

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Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#201

Post by YawningAngel »

marvin wrote: post #191
TheSpiceIsLife wrote: post #186

Earlier quoted context omitted.

It's a wealth transfer scheme. Wealth is transferred from ordinary folk via the IPO-retirement-fund axis to the plethora of agents involved in the whole scheme, from the employees bashing out code and UX, right through to everyone involved the M&A and IPO and the whole tax / tax agent / government tax agency cadre. It's not trickledown . It's deluge-up economics.

Huh. That's a novel use of stupid index fund money. Just get your shitty investments listed on the stock exchange and cash out. Index fund buyers don't care, they'll swallow it right up and it's free to crash and burn at their expense. You could even do it deliberately, as long as it follows securities regulations. Being a pure momentum strategy, index investing has no intelligence. At one point this would make index…

Indices don't include unprofitable companies for exactly this reason.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#202

Post by puranjay »

godzillabrennus wrote: post #39
tyre wrote: post #24

Food delivery is a terrible business. M&A won’t make it better. I worked at LivingSocial in 2012/2013. We used to joke that “we lose money on every transaction but make it up in scale.” Takeout and Delivery was one of the last bets the company made. Basically food delivery. The customer service load is huge, the services aren’t really differentiated, and you have to both pay the driver enough for it to be worth it an…

Until we have robots to do the labor I agree.

For that to happen, we have to first:

- Create robots capable of handling pickup and delivery automatically - a very hard technical problem that were far from solving

- Manufacture these robots at scale

- Purchase and deploy these robots at scale

The timeline for all of these things together is years, even decades into the future. Even if you get the tech down, creating factories that can churn out hundreds of thousands of these robots will take years (see Tesla's example - and that's for tech we already understand, like cars). It will also require massive amounts of cash to buy and deploy all these robots.

Robot-led delivery isn't happening for a long time.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#203

Post by rm445 »

WrtCdEvrydy wrote: post #165
randomsearch wrote: post #160

Earlier quoted context omitted.

Perhaps we’ll look back and say “food delivery was the pet food of the 2020 startup boom/bust.” I think these businesses are awful and probably unethical, but from the outside it would surprise me if a single winner could not make this business model work, once they had so much of the market that delivery schedules could reach high utilisation.

The issue is mostly limited by requirements to get food there quickly. If we knew what we wanted ahead of time, scheduling delivery ahead of time would make it easy... since you could use a delivery route (to deliver 2-3 items nearby). A single winner may be able to make it work since you can do 1-2 pickups and deliver to two nearby homes.

Yeah, that's why the churn of food-delivery companies isn't going to end unless external factors cut off the flow of investment. It's conceivable that one winner could be massively profitable, at enormous scale, with all the efficiencies of a significant proportion of the population being bought-in and everything from schedules to menus to delivery vehicles optimised to make the service effective. (Here is your daily PrimeMeal, valued PrimeCitizen). Until then everyone is making huge losses with ad-hoc restaurant collection.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#204

Post by hef19898 »

squeaky-clean wrote: post #106
MattGaiser wrote: post #83

Earlier quoted context omitted.

Yeah, but the delivery companies take 20-30% of the gross food order. So while they aren’t technically vertically integrated, they have the pricing of vertical integration (assuming typical restaurant margins).

> assuming typical restaurant margins I think Domino's margins blow typical restaurant margins out of the water. I don't have hard numbers, but worked a variety of delivery jobs from 2010-2014. Domino's was the only place with the attitude that their food was worth pennies to produce. Most places didn't offer discounts to their employees, not even for food that was mistakenly made and had to be trashed. Domino's was…

Routing optimization only really works at massive scale, otherwise waiting times are just getting too long. Chain's like Dominos or Pizza Hut have the advantage of a single source, all managed by the same company, using the same tools, systems an processes. Companies like Uber Eat or Deliveroo are using multiple small sources (restaurants) to deliver multiple small destinations with small order numbers. Can work, once everythig is automated as ch as possible (near impossible without an operating system for small restaurants) and at huge scale (locally, within normal delivery driver's ops radius). All despite competition. Without taking expenses like marketing and so on into account. Not sure how these companies are going to make money.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#205

Post by erispoe »

marvin wrote: post #191
TheSpiceIsLife wrote: post #186

Earlier quoted context omitted.

It's a wealth transfer scheme. Wealth is transferred from ordinary folk via the IPO-retirement-fund axis to the plethora of agents involved in the whole scheme, from the employees bashing out code and UX, right through to everyone involved the M&A and IPO and the whole tax / tax agent / government tax agency cadre. It's not trickledown . It's deluge-up economics.

Huh. That's a novel use of stupid index fund money. Just get your shitty investments listed on the stock exchange and cash out. Index fund buyers don't care, they'll swallow it right up and it's free to crash and burn at their expense. You could even do it deliberately, as long as it follows securities regulations. Being a pure momentum strategy, index investing has no intelligence. At one point this would make index…

Uber is not in the S&P500. And no fund manager is consistently doing better than the market. "Stupid index fund money" looks pretty smart in that regard.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#206

Post by baxtr »

WrtCdEvrydy wrote: post #165
randomsearch wrote: post #160

Earlier quoted context omitted.

Perhaps we’ll look back and say “food delivery was the pet food of the 2020 startup boom/bust.” I think these businesses are awful and probably unethical, but from the outside it would surprise me if a single winner could not make this business model work, once they had so much of the market that delivery schedules could reach high utilisation.

The issue is mostly limited by requirements to get food there quickly. If we knew what we wanted ahead of time, scheduling delivery ahead of time would make it easy... since you could use a delivery route (to deliver 2-3 items nearby). A single winner may be able to make it work since you can do 1-2 pickups and deliver to two nearby homes.

Huh. Interesting! How about a food truck with a kitchen that drives a pre-defined route to delivers pre-ordered food?

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#207

Post by rswail »

Jommi wrote: post #33
uber473453 wrote: post #19

Earlier quoted context omitted.

The CEO is a banker. Naturally he sees M&A, not innovation, as the company's future.

It's been an M&A company for years now. Just look at its portfolio of ownerships in competing local leaders like Didi, Yandex and Grab. It's a perfect food delivery ride hailing super app investment fund!

Didi and Grab weren't M&A to Uber, Uber in their cities/countries were acquired by Didi/Grab via stock.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#208

Post by rswail »

AndrewUnmuted wrote: post #135
viburnum wrote: post #79

Clearly private industry has run out of profitable investments. Better to shift spending to public investments (science, education, err, the current public health emergency) than to waste more money on delivery boondoggles.

Unfortunately the recent trend of tearing down public statues probably doesn’t instill confidence that these kinds of corporate investments will be properly protected.

Hmm, perhaps Wall St M&A activities pumping stock prices isn't considered "core" to Main St's society and economies.

It might be time to divest it from society's operations to allow us to focus on our core competencies and comparative advantages?

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#209

Post by jon-wood »

tyre wrote: post #24

Food delivery is a terrible business. M&A won’t make it better. I worked at LivingSocial in 2012/2013. We used to joke that “we lose money on every transaction but make it up in scale.” Takeout and Delivery was one of the last bets the company made. Basically food delivery. The customer service load is huge, the services aren’t really differentiated, and you have to both pay the driver enough for it to be worth it an…

I worked for five years at a grocery delivery company, and even there it was a nightmare trying to keep delivery routes profitable - that was with at least 5 hour's notice on what people had ordered, and pre-selected delivery slots, which meant we could peak at each driver doing 10-12 drops an hour if they were in an area with a high customer density. I have no idea how companies like Deliveroo expect to make a consistent profit when they get 25 minute's notice, no delivery slots, and therefore little to no ability to batch a driver's work. Everything I've read indicates a single Deliveroo driver would expect to do 1-3 drops an hour, which is just wildly inefficient.

Having said that, I do now wonder if you could make the model work by offering very cheap, or even free, delivery on the condition that you place the order a few hours in advance for a pre-selected delivery time. I'm not sure what the market is like for customers who want to order takeout food, but also know they'll want to do that in advance, but I think there's probably a niche there if anyone fancies taking a pass at it.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#210

Post by nightfly »

bhl wrote: post #66
tyre wrote: post #24

Food delivery is a terrible business. M&A won’t make it better. I worked at LivingSocial in 2012/2013. We used to joke that “we lose money on every transaction but make it up in scale.” Takeout and Delivery was one of the last bets the company made. Basically food delivery. The customer service load is huge, the services aren’t really differentiated, and you have to both pay the driver enough for it to be worth it an…

I think a questions that’s going to pop up is, why does delivery work for a company like Dominos’s (vertical integration) but not Postmates (horizontal)?

If I buy from Domino's I pay the fixed price for my pizza + delivery fee + tip for the driver.

If I buy food from $local_restaurant via $delivery_service I pay original cost of food + whatever the food deliver service adds to the cost of the food + the delivery services fee + tip to the restaurant + tip to the driver.

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