Delivery apps hit a cultural roadblock

Future. Delivery apps, which in recent years were seen as a nonstop growth engine, have fallen sharply in both reputation and revenue. With the environment that led to the rise of these companies seemingly ending (thanks to inflation, The Great Recession, and tech stock stumbles) expect many but the top delivery services to hang up the keys.

Few returns
Delivery apps are quickly making a lot of enemies, according to Insider.

• Investors. Burning through a lot more cash than they make, companies like Uber and Lyft have lost 60-70% of their value since IPOing, while Instacart lost 40% of its value after people started going back to grocery stores.
• All require so many funding infusions to stay afloat that Goldman Sachs started listing delivery companies under an index called “unprofitable tech.”
• Customers. Delivery prices are becoming unsustainable, with customers saddled with price hikes 80% above pre-pandemic levels.
• The biggest culprits are extra service fees, higher prices for food, and now splitting the fuel cost with the driver.
• Workers. Unfortunately, even though these companies spend a lot, very little of it makes its way to their employees — they have no health insurance, retirement-savings plans, or consistent pay (it is gig work after all).
• The high fees also cut into restaurants’ already-tight margins, making it harder for workers.

Considering that an unsustainable amount of startups, including Gorillas, Zapp, Getir, Gopuff, raised a combined $14 billion during the pandemic, expect a lot of that money to already be drained.