I came across a tweet that said : “Food delivery co's are the AWS of the restaurant business”. The AWS comparison suggests that one could build a food business on top of food delivery networks the way software business could be built on top of AWS. It’s a conceptually simple to grasp. But, I am not sure that the delivery networks are likely going to be the AWS of food businesses. Competition in the delivery market is heating up. Revenue and market share broken by regions don’t seem to be the right metrics long term to evaluate them. Those numbers can distort our understanding because of their cheap access to capital. It’s likely going to be a combination of acquisition cost, frequency and size of orders, retention period and gross & operating margins that will determine the winners in the long run. I am more bullish on players like Caviar and Uber Eats because they are well run and are not standalone businesses. Food delivery businesses, in my mind, are like media businesses. They are great strategic product units that feed into a bigger cash machine. Due to the heated competition, we have seen everyone from Postmates and Caviar to DoorDash and Uber Eats experiment with
AWS for food
AWS for food
AWS for food
I came across a tweet that said : “Food delivery co's are the AWS of the restaurant business”. The AWS comparison suggests that one could build a food business on top of food delivery networks the way software business could be built on top of AWS. It’s a conceptually simple to grasp. But, I am not sure that the delivery networks are likely going to be the AWS of food businesses. Competition in the delivery market is heating up. Revenue and market share broken by regions don’t seem to be the right metrics long term to evaluate them. Those numbers can distort our understanding because of their cheap access to capital. It’s likely going to be a combination of acquisition cost, frequency and size of orders, retention period and gross & operating margins that will determine the winners in the long run. I am more bullish on players like Caviar and Uber Eats because they are well run and are not standalone businesses. Food delivery businesses, in my mind, are like media businesses. They are great strategic product units that feed into a bigger cash machine. Due to the heated competition, we have seen everyone from Postmates and Caviar to DoorDash and Uber Eats experiment with