My only theory on what the VCs are thinking is something like: "eventually, efficiencies in delivery costs will occur, perhaps due to the number of participants shrinking allowing better driver routing or new technology coming available (drones, automated delivery vehicles, who knows) - at that time, the dominant players will become massively profitable".

But I don't really get it.

To be clear, the people doing well out of this are the delivery customers who are receiving a subsidy from all other participants.