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Five companies now control over 90% of the restaurant food delivery market

marketsaintefficient.substack.com

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Re: Five companies now control over 90% of the restaurant food delivery market

#41

Post by asdff »

Reason077 wrote: post #12

Less competition would certainly be bad for consumers and drivers. But has that actually happened here? Doordash and Deliveroo do not operate in the same markets, so their merger would not reduce competition in any given market. Prosus is a big conglomerate with its fingers in many different industries. But unless it starts buying multiple delivery companies that operate in the same markets, its acquisition of Just E…

I think tech companies that are in sectors like this with a great deal of money moving around a few different entities tend to inadvertently operate as de facto cartels in a lot of ways. They tend to mirror business decisions due to poaching eachother for the same talent and consulting with the same agencies who are giving them the same information and findings. The way they set up their companies and operate is all pretty much the same and designed to be similar so as to be useful for investors looking to compare businesses in the sector. ux patterns are the same or similar enough. How they pay their drivers also the same or similar enough. When there is this much similarity of behavior in the sector one has to ask if there would even be a difference for the consumer between having all delivery under 1 company or 10000 companies all operating the same business model? No different than a small town restaurant scene lost to 15 different chain fast food restaurants all operating the same franchise model: customers have diversity of business on paper, but not really since it is all just more or less the same sort of business with marginally different offerings.

Re: Five companies now control over 90% of the restaurant food delivery market

#42

Post by fabian2k »

koakuma-chan wrote: post #35
hn_throwaway_99 wrote: post #11

This 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…

And why is a large monopoly a net negative? I read his book and he says that monopolies are 10x better products, and if monopolies are 10x better then why are they bad? Are you arguing that it would be better to keep using 10x worse products, for the sake of there not being any monopolies?

How can a company make delivery 10x better?

The expected result of a monopoly are rising prices and at best indifferent service and quality.

Re: Five companies now control over 90% of the restaurant food delivery market

#43

Post by teddyh »

koakuma-chan wrote: post #35
hn_throwaway_99 wrote: post #11

This 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…

And why is a large monopoly a net negative? I read his book and he says that monopolies are 10x better products, and if monopolies are 10x better then why are they bad? Are you arguing that it would be better to keep using 10x worse products, for the sake of there not being any monopolies?

A monopoly could be 10 times as good, but what is their incentive to be 10 times as good?

Re: Five companies now control over 90% of the restaurant food delivery market

#44

Post by paulryanrogers »

koakuma-chan wrote: post #35
hn_throwaway_99 wrote: post #11

This 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…

And why is a large monopoly a net negative? I read his book and he says that monopolies are 10x better products, and if monopolies are 10x better then why are they bad? Are you arguing that it would be better to keep using 10x worse products, for the sake of there not being any monopolies?

Large and dominant companies can be a net good, at least in theory. In practice they become corrupted because of incentives to maximize profit by any means possible, with few who can oppose them.

When well regulated one can have most of the benefits without many of the downsides. Sadly, even the regulators become captured.

Re: Five companies now control over 90% of the restaurant food delivery market

#45

Post by nomadygnt »

koakuma-chan wrote: post #35
hn_throwaway_99 wrote: post #11

This 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…

And why is a large monopoly a net negative? I read his book and he says that monopolies are 10x better products, and if monopolies are 10x better then why are they bad? Are you arguing that it would be better to keep using 10x worse products, for the sake of there not being any monopolies?

Monopolies are anti-competitive. Without competition there is no incentive for innovation, lowering prices, not price-gouging etc. Is a 10x better product really 10x better if it is also 10x more expensive and there is no alternative?

Re: Five companies now control over 90% of the restaurant food delivery market

#47

Post by tiahura »

hn_throwaway_99 wrote: post #11

This 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…

What tech companies? These are food delivery brokers that have an app.

Re: Five companies now control over 90% of the restaurant food delivery market

#48

Post by sroussey »

JumpCrisscross wrote: post #20
hn_throwaway_99 wrote: post #11

This 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…

It’s the story of most mature industries. Food delivery also remains cutthroat enough that this is a strange place to launch this complaint from.

It is also weird that there isn't a company with 2/3 of the market. Eventually it will happen i guess.

Re: Five companies now control over 90% of the restaurant food delivery market

#50

Post by afavour »

bawolff wrote: post #49

5 companies dominate a market that 5-10 years ago didn't even exist. That doesn't exactly sound terrible.

Of course it did. People have been ordering delivery food for decades. They just called up the restaurant to do it.
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