Comment by naravara

It only works if you have an easy path to monopoly once you price your competitors out. A company like WalMart or Amazon can leverage their returns to scale on logistics to actually price out Mom&Pops. That way, even after the drive the small stores out of business it’s just not worth it for anyone else to try to cut in unless they can also operate at WalMart scale and afford to bleed money for a while until WalMart gets tired of undercutting them.

But there are no appreciable logistical or operational efficiencies in how these delivery services operate. And there aren’t any barriers to entry. The workforce is completely fungible so they aren’t locked in. And just the fact that delivery services are popping up like mushrooms suggests it doesn’t take much to start one up.

In theory they could eke put some advantages to scale that keep out upstarts by using machine learning to optimize delivery routes or something. But I doubt that gets them the kind of efficiency gains they would need to actually turn a profit. From what I’ve seen, it looks like their main attempt to freeze out competition is just coming from flooding your search engine hits. I don’t know how sustainable that is either.