DeliverEats Unveils Latest Strategy!
Smart VCs to invest additional billions in companies that lose more money the bigger they grow!
Much to the astonishment of really smart and stable genius investors, this month Deliveroo announced a loss of $309 million for its 2020 financial year. Their problem: delivering food is a loss-making business and can only exist for as long as really smart and super-clever VCs keep throwing money down the drain. Even better: the more customers Deliveroo and Fooby and DoorDash and UberEats gain, the more money they all lose!
Some of us may wonder how such amazingly clever super-smart VCs manage to burn so much of other people’s money by investing it in companies that have business models dedicated to avoiding breaking even at any time between now and when our sun goes supernova in five billion years. But hey, VCs are super-smart and hyper-clever so it must just be bad luck that they invest in companies that have no hope at all of ever being profitable.
Investors, who are nearly as amazingly clever as VCs, are just now beginning to wake up to the fact that serving food to customers is a very low-margin business. Most restaurants fail in their first year of operation because eking out a tiny profit is often impossible even without adding in the cost of delivering food to customers who aren’t actually in the restaurant. Apparently all the super-smart investors were so excited by the idea that our fashionable media-driven coronapanic would lead to everyone on Earth ordering takeouts three times a day for the next five hundred years that it never occurred to anyone how making a loss on every delivery was actually a non-sustainable business model.
Now these amazingly brilliant investors and the glib-tongued CEOs they’ve backed are rubbing their foreheads and furrowing their brows and trying to come up with a model that — gasp — could actually generate slightly more revenue than the cost of providing the service! What a truly novel concept. It’s amazing no one has ever thought of this before in the entire history of business.
The problem is that when your fundamental model is loss-making it’s going to be very difficult to turn things around. The food delivery companies can’t screw the restaurants any more, because restaurants are on the ropes. The food delivery companies can’t charge customers directly in the amount necessary to at least break even if not actually make any profit because fickle customers will simply turn to whichever delivery company is last to raise its rates. And as these companies don’t pay their delivery personnel very much, they can’t slash costs there either.
So what’s a delivery company that’s already burned through billions of dollars going to do?
Maybe they should look to motorsports. Every F1 car is plastered with ads. Why not rent out ad space on the jackets of the delivery personnel? What could possibly be more appealing than receiving a rapidly-cooling pizza from someone wearing ads for McSlop and Kentucky Fried Cancer that convince them they chose the wrong option when they placed their order twenty minutes earlier? This brilliant strategy could generate as much as $10 per month per delivery person, and thus cut losses by up to 0.1%.
Which leaves 99.9% still to go.
Another astoundingly clever idea would be to fit dynamos on the front and back wheels of the delivery bikes, thus generating electricity with every mile laboriously peddled. The electricity could be stored in cellphone batteries and then sold to the utility grid, yielding a few dollars per month per delivery person and thus reducing losses by another 0.1%.
Only 99.8% to go! Clearly we’re onto a winner here with this brainstorming — at least, more of a winner than the actual business model of these companies.
Maybe when the delivery people get hit by cars or die from over-exhaustion, their bodies could be sold to food-processing companies to be turned into burgers? Joe and Sally up in Legal say this would be against the law but Uber and the others could pool their cash and hire some really sharp lawyers to lobby for and persuade some Republican wackos to get behind the idea. Going into the meat supply business would reduce their losses by another 0.1%.
Only 99.7% left to cover!
Is there any way to generate more revenue from a fundamentally brain-dead business concept? Well, they could stop trying to solve the problem and simply double-down. Instead of using humans to deliver food on bicycles the fearless delivery companies could invest tens of billions of dollars into making autonomous deliver robots. By cutting out the horrific expense of paying humans a few dollars an hour and replacing them with million-dollar robots, they can reduce the net loss of each delivery — provided everyone agrees to ignore the huge additional Capex this will incur. As we’re talking about super-modern and trendy tech companies, we’re not talking about land-bound robots. No sirree! We’re talking about autonomous aerial delivery drones! Just imagine: the customer can leave a window open so the drone can fly right into their home and hover over them as they sit slumped on the sofa and it can gracefully slide the food right into the customer’s open mouth! How cool is that?
Sure, there’s that pesky Capex. And the servicing costs. And the energy costs. And the legal liability. But those are small details and we all know that great businesses don’t sweat the small stuff.
So instead of attempting to eke out a slender profit, the food delivery companies can do what Uber did: keep expanding into ever-less-plausible services as a way to justify never-ending multi-billion-dollar losses. Because, if you lose money on everything you do, well hey, you can just make it up in volume. And as long as VCs and investors keep on being as super hyper intelligent and amazingly smart as before, everything will be just fine.