Ultra-Fast Delivery

The Lempert Report
July 14, 2022

Phil:  I hate to say this, but we told you so. We told you repeatedly over the past three years that these rapid delivery companies, these food delivery companies that promised delivery in 15 minutes, we're going to fail. There is no question about it. You can't deliver even in midtown Manhattan in 15 minutes, even with a motorized bike. It just doesn't make sense.

Phil:  I'm not even talking about the shopper who doesn't need something in 15 minutes because within walking distance there's a bodega on just about every street corner that that exists. There's been a lot of accidents, traffic accidents, fatalities, because these people rushing to do this 15 minute delivery, there's even been stick ups, hold ups, where people are stealing these delivery people's electric bikes because they're worth about two grand each.

Phil: So, you know, a new theft has has it has hit the statistics that we never had before. So the bottom line is, when we see this report that just came out of courts that, you know, nearly 30% of delivery orders from Gopuff, which is the biggest ultra fast delivery player here in the U.S., were discounted as of April.

Phil: What they also found is outside the U.S. Gitter, which is a Turkish ultrafast startup, has over 80% of its orders discounted in countries including Germany and France. Basically, venture capitalists last year alone invested $28 billion into rapid delivery globally, and that's more than double the amount, you know, the previous year, according to Pitchbook. So Sally, when we look at the ultra fast delivery companies, you know, should we just have, you know, memorial services for them now and put them out of their pain?

Sally: I think that, you know, people thought this was going to be really big, obviously, you know, dumping a bunch of money into these these businesses. But do do consumers really need to get their food delivered that quickly? I don't know. You know, I think the the fast food restaurants with drive thrus already kind of have that covered as like if you want something, you know, in a few minutes, you know, you drive and go through a drive through and get it.

Sally: But having something delivered to your home or your office in in 15 minutes or less, I'm not sure consumers really want that.

Phil: I agree with it. I'm not sure consumers want it. I don't think it's a sustainable business. And the only people that have gotten any benefit from this are the people that got rich off of all this venture capital money that's just going to see their money be flushed down the toilet.