Re:Ask HN: Why are delivery apps so expensive?
by kazinator on Thursday July 28, 2022 @05:32PM
(#32270358)
If I were to guess: there is likely some margin to make delivery cheaper. However, the volume won't be there to make up for it.
The volume won't be there to make up for it because all non-free delivery is too expensive for a good many people. Quite likely there is a price point at/below which delivery will start to appeal to larger segment; perhaps at that price, almost everyone will opt for delivery instead of going there. That price is likely below the costs of providing delivery.
It's probably better to just focus on and capture the market segment that forks up for delivery (because it's worth it to them) rather than chasing an elusive volume increase at lower margins.
If they could knock a dollar off delivery but triple the volume by doing that, they probably would; and likely they've already done that sort of price optimization.
Another thing to consider is order size. If you had a big group of people and had 10 of these meals delivered, maybe the economics would be better?
The volume won't be there to make up for it because all non-free delivery is too expensive for a good many people. Quite likely there is a price point at/below which delivery will start to appeal to larger segment; perhaps at that price, almost everyone will opt for delivery instead of going there. That price is likely below the costs of providing delivery.
It's probably better to just focus on and capture the market segment that forks up for delivery (because it's worth it to them) rather than chasing an elusive volume increase at lower margins.
If they could knock a dollar off delivery but triple the volume by doing that, they probably would; and likely they've already done that sort of price optimization.
Another thing to consider is order size. If you had a big group of people and had 10 of these meals delivered, maybe the economics would be better?