If there are 5 companies, doesn’t that count as “competition”?
If not, how many companies does there have to be to have “competition”?
If there were only 1 or 2 companies, that would seem much more of a problem.
Five companies now control over 90% of the restaurant food delivery market
171–180 of 350 posts
Re: Five companies now control over 90% of the restaurant food delivery market
#172This is essentially the story of tech companies across nearly every industry where they have come to dominate. This is one reason that I see most tech companies as essentially a net negative for society at large, as the goal is nearly always to control a large monopoly (and this is fully admitted by many tech leaders, e.g. Thiel) which the Internet makes possible. Pre-Internet you would see the same dynamics, but usu…
There's a George Carlin bit about politicians. The punchline is "the problem isn't the politicians, it's the people." His point is that nothing emerges from a vaccuum. Politicians are people just like everyone else, they're just responding to incentives created by a majority vote. Tech companies are just like any other company, except a lot more people are willing to pay for their goods and services. If Carlin were a…
George Carlin also said:
"'cause they own this fucking place. It's a big club, and you ain’t in it" (https://www.goodreads.com/quotes/964648-but-there-s-a-reason...).
I think there's a power dynamic that it seems like you are ignoring, that big companies take advantage of. Amazon gets cheap goods to your doorstep, and removes all competition while doing it. You think those goods are going to stay cheap,i don't. This is a playbook that wallmarts followed for years. Amazon also gets sellers, by selling amazon versions of their products. Google makes billions by showing you ads, they got you there with free services, but now they enshittify.
>There's an air of let's go back to the good old days when we were hunter gatherers to the whole thing
I think my concern is not going back to the bad old gilded age days, where wealth inequality lead to most humans having a terrible life while a few had a great life.
Re: Five companies now control over 90% of the restaurant food delivery market
#173Earlier quoted context omitted.
And the alternative to restaurant delivery service is really the way we get the other 98% of our food. Anything I can ignore without being at some sort of disadvantage I don’t really get worked up about consolidation. I wish we had more than 3 cell phone networks, this could all be one and I’ll just drive to the restaurant.
There was a discourse prior to the last election about how cost of living was out of control based on people sharing delivery bills from their "burrito taxi". I do get that this article isn't "about" that discourse, it's about an investment thesis, but my real point is just: there is no reason to believe any part of this market has settled to the point where you could make reliable predictions. Everything is very new…
Yeah I remember Jeff Bezos saying something very much like that at the launch of the kindle phone. Something like “smart phones have only been around for seven years there’s no reason to think the two platforms in the lead now will always be the only two.”
Sometimes a market has already ossified five years in. I guess we’ll see.
Re: Five companies now control over 90% of the restaurant food delivery market
#174Earlier quoted context omitted.
I generally agree with your point, but would like to mention in my opinion Amazon (not AWS) makes billions because they've captured the market and prevent any meaningful competition from arising due to their "Fair Pricing" policy rules. I'll be happy when there are meaningful alternatives to Amazon that don't have inflated prices due to price parity which have an excessive return cost built in...
Amazon.com has 12% market share in global e-commerce and 38% in the United States. I think they have plenty of competition.
Amazon 38%
Walmart 6%
Apple 3.5%
Ebay 3%
https://grok.com/share/bGVnYWN5_bc9cd328-15d3-4047-bde6-d57a...
Re: Five companies now control over 90% of the restaurant food delivery market
#175This is essentially the story of tech companies across nearly every industry where they have come to dominate. This is one reason that I see most tech companies as essentially a net negative for society at large, as the goal is nearly always to control a large monopoly (and this is fully admitted by many tech leaders, e.g. Thiel) which the Internet makes possible. Pre-Internet you would see the same dynamics, but usu…
There's a George Carlin bit about politicians. The punchline is "the problem isn't the politicians, it's the people." His point is that nothing emerges from a vaccuum. Politicians are people just like everyone else, they're just responding to incentives created by a majority vote. Tech companies are just like any other company, except a lot more people are willing to pay for their goods and services. If Carlin were a…
> There's an air of let's go back to the good old days when we were hunter gatherers to the whole thing.
I strongly disagree. On the contrary, I see the arch of many technological advancements in that, in the beginning, they solve a crucial need, but then once they solve that problem they attempt to hijack the positive feedback systems of humans (e.g. addiction systems) to stay in power.
Consider the food industry. Many people were under pretty constant threat of starvation through much of human history. So in the 19th and 20th centuries we essentially solved that problem in the Western world with the modern food industry. But we didn't stop there. Once people had all they needed to eat, food companies had to figure out how to get them to eat more, and they were highly successful. Saying that much of modern food science is a net negative for humanity doesn't mean I think we should go back to being hunter gatherers, but at this point every new "innovation" in the industry is really just an attempt to try to get people to eat/drink more.
I think much of the modern Internet/Web has been on that "net negative" slide for at least the past 10 years. Are people at large to blame for this? In one sense, sure. But I have no problem laying the blame at tech leaders who are essentially in the role of drug dealers for much of the industry. I mean, sure, drug users are ultimately at fault too, but we look down pretty harshly at drug dealers for their role in the process.
Re: Five companies now control over 90% of the restaurant food delivery market
#176and? network effects. what's so surprising.
Re: Five companies now control over 90% of the restaurant food delivery market
#177Earlier quoted context omitted.
There's a George Carlin bit about politicians. The punchline is "the problem isn't the politicians, it's the people." His point is that nothing emerges from a vaccuum. Politicians are people just like everyone else, they're just responding to incentives created by a majority vote. Tech companies are just like any other company, except a lot more people are willing to pay for their goods and services. If Carlin were a…
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Instead of citing an AI, why don't you cite an actual reputable source? Those facts it ingested and regurgitated no doubt came from somewhere, and you're clearly attempting to use the facts to prove a point. An authoritative source is more helpful than attributing it to [insert ai bot here].
Re: Five companies now control over 90% of the restaurant food delivery market
#178Earlier quoted context omitted.
> My theory is that if you're extremely pessimistic about technology or politics, you probably won't like anything that happens when large groups of humans make collective decisions. There's an air of let's go back to the good old days when we were hunter gatherers to the whole thing. Hunter gatherer is the only alternative to a society under total dominance by mega-corps? This reminds me of individual stories from l…
"Local communities" existed for millennia and didn't manage to reduce the child mortality rate and extreme poverty rate to effectively zero. I know neoliberalism is a dirty word, and there are plenty of problems with the modern world, but I would rather live in a neoliberal global society than the "local" world of 200 years ago.
Again, you have many more options than just 2.
Re: Five companies now control over 90% of the restaurant food delivery market
#179If there are 5 companies, doesn’t that count as “competition”? If not, how many companies does there have to be to have “competition”? If there were only 1 or 2 companies, that would seem much more of a problem.
Great question! And a great example of why the central question in any antitrust issue is defining the market.
Define it narrowly enough, and Firm A buying Firm B might create a monopoly - the regulator cannot approve that.
Define it broadly, and Firm A buying Firm B takes the market from 21 firms to 20 - the regulator is unlikely to stand in the way.
(In practice the market definition question in the US will often happen in front of a judge and the two sides are the merging parties vs. the regulator (FTC or DOJ).)
In this case, is the relevant market “restaurant delivery service via an app” ?
In that case five firms is (likely) moderately concentrated at last. (If you have the market shares of the five firms, you can compute an index called the HHI to get a rough sense of how much more concentrated the market will be before and after a merger.)
However… “app based food delivery” doesn’t seem like a credible market to me. The firms are unlikely to have pricing power either over restaurants or customers.
Candidate competing markets:
- going to the restaurant directly
- making food at home
- delivery provided by the restaurant
Any one of the five firms currently in the market who wanted to buy another would argue to include all three as the “relevant market” in which case their share (both before and after) is tiny.
The regulator will argue for a narrower definition.
When you see commentary on this website about “X is a monopolist” or strong claims like that (which are made frequently!), almost never is there any appeal to a market definition!
Fortunately judges get better input than HN commentators.
Re: Five companies now control over 90% of the restaurant food delivery market
#180This is essentially the story of tech companies across nearly every industry where they have come to dominate. This is one reason that I see most tech companies as essentially a net negative for society at large, as the goal is nearly always to control a large monopoly (and this is fully admitted by many tech leaders, e.g. Thiel) which the Internet makes possible. Pre-Internet you would see the same dynamics, but usu…
> the story of tech companies across nearly every industry I don’t think this is limited to tech companies. Most industries are controlled by a few companies in those sectors. Such as Steel, railwood, pharma, grocery, etc.
Surely we're understanding that VCs are playing a stronger game in the software industry.
Cost of goods is lower, overhead is lower in software than in all the items you mentioned and VCs starve out other players by reducing their costs, capturing the market and increasing cost once captured.