The biggest reason food delivery companies are losing money is because they are giving it to the diners as incentives, they are giving it to their engineers to make innovative services, and they are spending it on marketing and advertising. All of this is to increase market share, which means as (if anticipated) the industry expands to cover more of the total addressable market, geometrically more future profit is made if the profit margin can be tweaked then as opposed to now. Any of them could be profitably cash flowing to investors within a month if they wanted to be.
They're not making money simply because they want to try to make even more money in the future, not because they couldn't make money if they wanted to.
Wow. So, basically, their priority is to build service and marketshare out at the expense of the two most critical operating parts of the service long term - restaurants and drivers, and can't possibly imagine being profitable short or long term doing anything but spending money on advertising, paying their in-house engineers, and artificially deflate delivery costs for the end users in a desperate effort to monopolize a service area and build brand loyalty? Those values are certainly reflected in their day to day operations thus far, and completely believable.
If it's so easy for them to turn that around on a month's notice, why are they in such financial trouble to begin with, and why were there even talks of Uber potentially buying out Grubhub not six months ago due to Grubhub's value and business plunging?
This is some of the most short-sighted, backwards nonsense logic I've seen peddled in a while. But then, that's the kind of out of touch thinking you get from middlemen who believe they're more valuable than they really are.
The drivers aren't getting paid more because paying them more isn't showing increases in the metrics that the execs believe will make them all more money in the future, and they aren't getting paid less because it actually hurts profits when too many drivers reject lower paying orders.
That's a real fancy way of saying they're refusing to pay their drivers a living wage and are doing everything they can to pay them as little as they can literally get away with without causing open revolt. But then, somehow expecting better than that from businesses who average well over 90% annual driver attrition rates is a bit silly. If it was really about deferring profits to build marketshare, they'd spend money and treat the two most critical components of their service far better than they do. They'd actually pay their drivers well and wouldn't gouge participating restaurants 20-30% of the delivery order, whether the restaurant has the food delivered by the service or their own in-house delivery staff. Instead, you have both drivers and restaurants using these outfits out of desperation with a hope of financially surviving, something near impossible to do given the cut the restaurants have to pay and how little the drivers get compensated.
Sorry, I don't buy it. This sounds like the sort of internal staff propaganda that gets spun to quell dissent among the ranks than congruent with the reality of the situation.
On the topic of driver incentives and pay - any idiot with a handful of functioning brain cells and a means of transportation can deliver food - the barrier to entry is pretty much nil and metrics needed to determine if certain delivery drivers are responsible for more future profit are really hard to create. In addition, you don't have a boss who can tell you to go clean the shit of the walls in the bathroom, can pick whatever hours you want, and have to fail extremely hard to be told not to come back. It's better than working on the kitchen side of things for many people, let alone fast food.
That's incredibly condescending and elitist, and truly spoken from a place of privileged ignorance with a life that's never had to actually work in the trenches outside of some sort of Pulp
Common People tourist delusion.
I've been the pizza delivery driver. I know what living in grinding poverty is like and being desperate for money and work. I know how these gig economy outfits operate. There's more dignity, better treatment, and greater perks slinging dough and cleaning public restrooms than trying to stitch a full-time job together by trying to be one of the expendable sub-minimum wage contract car jockies for a mess of these Silicon Valley screwjobs. At least Dominos kept you fed, met minimum wage if your tips sucked, and kept a look out for you if you had to deliver to a dangerous neighborhood/address.