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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

#91

Post by Tostino »

ks2048 wrote: post #15
ro_bit wrote: post #3

The title scared me a bit before I opened the article and realized it was talking about restaurant->consumer food delivery services. While that isn't great, I was initially thinking was that the companies that facilitate the food delivery supply chains around the world were massively consolidated (I sure hope they aren't)

I'm pretty sure the food supply sources are massively consolidated. I don't know about the delivery part or why that would matter more than the actual food production. A quick search will lead to quotes like "Four companies now control more than half of the market in chicken processing (Tyson, JBS, Perdue, and Sanderson), close to 70 percent in pork (Smithfield, JBS, Tyson, and Hormel), and nearly three quarters in b…

I've worked in the industry for over a decade and food distributors can squeeze the manufacturers more than the other way around. That's a very silly statement if you read it with any knowledge of the space.

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

#92

Post by Tostino »

Reason077 wrote: post #18
ro_bit wrote: post #3

The title scared me a bit before I opened the article and realized it was talking about restaurant->consumer food delivery services. While that isn't great, I was initially thinking was that the companies that facilitate the food delivery supply chains around the world were massively consolidated (I sure hope they aren't)

The food service industry certainly has some major global players too. Names like Bidfood, Sysco, PFG, etc. In some cases, these same companies cater/supply everything from prison, school, and hospital kitchens through to fancy airline lounges and high-end restaurants!

As somebody that built a TPM product for the industry, I hate prison and school bids. It's so fucking dystopian.

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

#93

Post by readthenotes1 »

paxys wrote: post #84

I can't think of a single industry or segment, whether consumer or enterprise, where 90%+ of the market isn't controlled by 1-5 companies. That's just how business works.

Chinese food restaurant? Lawn service

If I spent more than 2 seconds I could probably think of others

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

#94

Post by pizza »

b112 wrote: post #61
asdf6969 wrote: post #59

Earlier quoted context omitted.

Everyone hates calling and apps give customers a list of restaurants with menus to browse. Restaurants also do all of their in-restaurant management with software (why not paper? ask them idk) which I assume has some integration with the app. I can imagine some type of open protocol that lets them self-host an order service though, or at least an open solution that’s hosted by many providers and many separate apps. T…

Maybe we should all make the world a better place, suck it up, and just call? Maybe making the world a better place, means human interaction and less automation.

Say what you will but customers pay to not suck it up

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

#95

Post by bravesoul2 »

> As long as food delivery is better than other ways of consuming food, like cooking, takeaways, or dining out, it will be able to keep customers in the network.

Made me laugh out loud. It's strictly the worst option. Only use it if my job wants to pay, or if very sick.

Cold food. Unpredictable delivery times. More expensive than eating out. Usually less nutritious than cooking yourself. And of course expensive as hell.

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

#96

Post by teddyh »

miki123211 wrote: post #76
teddyh wrote: post #43

Earlier quoted context omitted.

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

We have to distinguish between monopolies that keep their status by being great versus monopolies that have something else going on. Google (search) is an example of the former. Search is a very expensive business to be in, but most of the costs are in scraping, indexing and software development, not actual query execution. The more users you have, the more you can spend while still keeping margins constant, and the…

> monopolies that keep their status by being great

What I am asking is what incentive those monopolies have to continue being great. Even if Google did not use Chrome to steer people to Google Search, Google Search is an established habit for most people, and it would have to become significantly worse than any competitor in order for people to consider switching.

You pointing out that a competitor to Google can only exist because Microsoft is pumping huge amounts of money into it, is not the great argument you seem to think it is. If Microsoft does not have a good chance of making money with Bing, what chances does a startup search company have?

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

#97

Post by vlovich123 »

cjbgkagh wrote: post #57
nomadygnt wrote: post #45

Earlier quoted context omitted.

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?

Not innovating, maintaining high prices, and price-gouging are unstable activities for a monopoly, as in it would open up a void for effective competition. The real anti-competitive actions is that it becomes cost effective to do regulatory capture / pay bribes to politicians. A monopoly can pay to play in a way that fledging competitors cannot. Once the industry has been captured then they can do rent seeking behavi…

How many desktop OSes can you choose from walking into BestBuy? And this is decades after MS was convicted of being a monopoly and illegally paying computer manufacturers money to keep competitors off.

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

#98

Post by bravesoul2 »

tiahura wrote: post #47
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.

Have an app is doing a lot of work there. Uber eats at least is fairly sophisticated back and front end and certainly not a weekend project or something say Domino's Pizza can outsource to a team to get it to that quality.

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

#99

Post by dinfinity »

astrange wrote: post #88
koakuma-chan wrote: post #35

Earlier quoted context omitted.

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?

Five companies in an industry isn't a monopoly. That's very competitive actually.

Depends on the geographic distribution of the companies. Meituan is huge, but they don't do shit in Europe or the US.

There are probably areas where these companies operate as effective monopolies or two-company oligopolies.

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

#100

Post by bravesoul2 »

astrange wrote: post #88
koakuma-chan wrote: post #35

Earlier quoted context omitted.

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?

Five companies in an industry isn't a monopoly. That's very competitive actually.

Split the world us/china/other and ignore minor players and there are 1/3/1.

In a given are there is competition but the local competition is likely to be pushed out by Uber Eats who could undercut them out of business for a while. Or just have better tech / customer experience due to scale (looking at you Menulog)

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