The Price of On-Demand

From merchandise to taxis to clothing and food, there is almost nothing that cannot be ordered through the iPhone. Companies such as Uber, Lyft, PostMates and DoorDash are among the leading on-demand service apps available today. In our ever-increasingly busy lives, the instantaneous ordering of different services can seem affordable and time-saving, especially for urban college students at a school like USF. However, what many people fail to recognize are the negative consequences that come along with these services, and how on-demand apps are affecting the community, economy, and how we view service.

CB insights described the food delivery market as “overcrowded” in a recent November 2015 article, and stated that today one-third of all US-based food delivery companies received their first round of funding in just the past year. Furthermore 25 US-based companies are using the same two business models -- delivering “cooking boxes” or prepared meals. CB Insights created a graphic using their research to display the chronological similarity between the most popular food-delivery services.

Bloomberg Business has described food delivery companies as “attractive acquisition targets”, naming Sequoia Capital as one of the leading investors in these companies. As food-delivery apps are passing billion dollar values, some, such as DoorDash, are continuing forth in their expansion unfavorably. DoorDash, currently valued at over $600 million, is facing a lawsuit issued by In-N-Out for delivering their food and using their trademark without any form of agreement with the company.

Many people do not realize the price difference between using an instant-delivery app and shopping for themselves. A recent New York Times article pointed out some of the complex fees added to instant-delivery services, such as fluctuating delivery fees, required memberships, or automatic tips.  According to Forbes, it is because the company is only making profit through the delivery fees. As a low-budget college student, I believe I can fairly say that luxury comes with a price, and often times the price for on-demand service outweighs the benefits of convenience.

It is important for the demographics that these delivery services are targeting to recognize the positive and negative aspects of their purchases. These San Francisco delivery apps are often used by young adults and college students due to their connections with technology and on-demand services. However, these demographics are the ones that should be investigating what they are paying for and watching their money. It is important for consumers to question quality, price, and need vs. desire as the on-demand delivery industry continues to expand and thrive.

http://www.bloomberg.com/news/articles/2015-11-23/in-overcrowded-food-delivery-market-venture-capitalists-are-still-hungry-for-more

https://www.cbinsights.com/blog/food-delivery-startups-crowded-market/