Eli5: why are there soo many Uber/ubereats like apps?

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How do these firms even compete with each other?

I understand that different taxi apps in an attempt to attract drivers simply pay more than others apps but how do they even secure the funding to launch an app like that in the first place? Same thing for food delivery apps

Imagine you were an investor, and someone told you, “I’m going to compete directly with Uber Eats, our competitive advantage is that we pay out delivery guys more”. Why would anyone fund that? That’s not a strong competitive advantage.

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4 Answers

Anonymous 0 Comments

It’s a relatively low barrier to entry compared to some other businesses.

If I tried to start my own Airbnb tomorrow, it would take a LOT to get people to trust me putting strangers in their homes.

If I tried to start my own Uber, I’d need a massive army of drivers before it had much value to users because the whole idea is that a ride is quick to get going a lot of places.

But delivery is largely between two places relatively close together. I don’t need that many delivery drivers to serve an area. Delivery people can easily hop on to work for multiple delivery apps to maximize their income and you can take advantage of people who self trained using other apps.

And the other thing is that the established options kind of suck. They’re expensive with weirdly hidden fees and a risk of unreliable weirdo delivery people. So a lot of people who use them are looking for alternatives.

The other end of the transaction- the places stuff is coming from are well established, so users can open a brand new app with lots of logos of companies they more or less know and trust doing their part of fulfilment.

Also, companies that already are somewhat related keep trying to take advantage of what they already do to make a delivery service. Grocery stores have their own because they already have the groceries. Uber has their own because they already have a ton of people driving around.

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