BI: $UBER $LYFT $DASH etc Denied Business Basics

The graphic accompanying this long piece is excellent.

This is a very critical and overdue look at delivery apps such as $UBER $LYFT $DASH $GRUB etc.

Business Insider headline: Delivery apps ignored business basics to supercharge growth — and now they’re facing layoffs, stock crashes, and a brutal war for survival

Subheadline: Delivery apps ran on an unsustainable business for years, but the tech industry crash and economic slowdown may finally spell their doom.

But in pursuit of grand ideals — from the “future of transportation” to the “future of grocery” — and grander funding, these businesses hemorrhage money as they’ve relentlessly chased growth: burning cash, customers, and vendors along the way. Now, as tech valuations crumble and investors ditch their stakes in unprofitable startups, these companies face a reckoning of their own making.


While Uber wasn’t the first gig economy platform, its rise in 2009 emboldened a generation of entrepreneurs to try their hand at founding companies reliant on contract work and mobile apps. These companies got cheap financing as investors, forced by a decade of near-zero interest rates, searched for yield in ever riskier propositions. Tech financiers piled into these unprofitable but buzzy startups, hoping that the temporary sacrifice of cash flow and huge losses in the present would lead to explosive growth and, eventually, superior returns. The boom continued for over a decade, culminating in a dizzying array of “instant grocery” startups — Gorillas, Zapp, Getir, Weezy, Jiffy, Gopuff, Yango Deli, Buyk, Fridge No More, Jokr, Voly, Market Kurly, and Instacart — that seized on the disruption of the pandemic to raise a combined $14 billion.

Although they provide a wide array of services, these gig economy companies generally share a dubious connection to profitability. For example, between 2018 and the first quarter of 2022, Uber’s users have spent $53 billion on the platform while Uber has burned roughly $73 billion on costs – including erecting offices with a boatload of perks. In order to stem the tide of quarterly losses, Uber relies on frequent sales of stock, debt, and convertible notes to outside investors. Put simply, gig and delivery companies like Uber require regular infusions of cash from the public in order to remain in business. There are so many unprofitable companies staying afloat through investor cash that Goldman Sachs even created a separate index to track the performance of the “unprofitable tech” sector.

Charts for $UBER $LYFT and $DASH show how hard they have fallen.