This article is part of the On Tech newsletter. Here is a collection of past columns.
Many of the delivery businesses that have sprung up in the last few years make no financial sense and may be turning us into monsters.
I’m talking about app-based companies including Uber, DoorDash, Gopuff and many others around the world. They aim to bring us groceries, cooked meals, a home cleaner, cases of beer or a trip across town — all better, faster and cheaper than how we’ve always done things.
I’ve tried to be open minded about these app companies. They are the logical next step in our consumer culture, and they create new types of jobs. Deliveries of anything under the sun might also put the power of Amazon into the hands of local businesses and preserve what we like about Main Street with handy, 21st-century twists.
But any shred of optimism I had is fading. These app delivery services are at best an economic mirage and at worst expanding misery by making it too easy to ignore their true cost — financial, human and community — in the name of convenience.
For years, my question about companies like Uber was … how? How did it make sense to take a 20-minute trip across San Francisco for the price of a sandwich? How was it possible for an app to connect me with a courier and a local restaurant and get a burger delivered for what seemed like peanuts?
The answer in many cases was that it did not make sense. Uber has been in business since 2009 and so far this year it spent so much to stay afloat that it effectively set on fire 14 cents of its cash for each dollar of revenue. That is not what healthy businesses tend to do, and this was an improvement for Uber. The food-delivery companies in the United States are mostly unprofitable, too.
As my colleague Kevin Roose wrote in June, young app-based companies built for consumer convenience no longer have the luxury to spend cash in stupid ways. Most of these companies are now trying to buy out competitors, raise prices, or squeeze couriers or restaurants for better terms. Or they are hoping that the companies’ economics stink less as they deliver more types of goods and bigger orders. Sure, these tactics might work in some places and some of the time. Or they might not.
More recently, delivery companies that make even less sense have sprouted everywhere. In 2015 Uber rides seemed impossibly cheap, yet now companies like Gopuff, Dija, Getir and Jokr — my spell check protested at these names — promise to deliver a pint of ice cream and condoms in 10 minutes or less.
These companies operate something like little 7-Elevens, except they absorb the cost of both buying products and sending a guy on a scooter to your home. This might make sense if people were paying for the privilege of skipping the store, but the fees or markup on products are relatively minimal. How?
Two answers: They are subsidized by eager investment firms — for now, as Uber and others were for years. And, like other app-based delivery services, they pay for themselves partly by squeezing more from the people with the least power in the transaction.
A series of articles this week from Rest of World, and an investigation from The Verge and New York Magazine, painted a picture of impossible demands on delivery workers for a multitude of app-based services.
Low-wage work has always been precarious, and more affluent people benefit from that in the form of cheaper products and services. But app-delivery couriers are compelled to continually do more work, faster and for less money or fall out of favor with the computer programs that assign the best jobs.
Maybe this work could improve, voluntarily or by force. And it’s possible that labor shortages and courier demands might compel app companies to improve working conditions.
I fear that the most significant innovation of these apps is obscuring the true cost of convenience. We are learning to expect everything fast and easy and not think about the toll that takes on people and our communities.
If you don’t already get this newsletter in your inbox, please sign up here.
Before we go …
-
Every word of this made me cringe: My colleagues Ryan Mac and Sheera Frenkel reported on a Facebook initiative that imagined spreading pro-Facebook information in people’s stream of posts, distanced Mark Zuckerberg from scandals and took other steps to improve the company’s image in the eyes of Facebook users.
-
Barcelona is the white hot center of Airbnb rage: Paige McClanahan traces why many city residents and officials grew angry at Airbnb rentals and what a new ban on short-term rentals has meant for people who offer home stays on the website.
-
You’ll get back to that online article, maybe: There is SO MUCH STUFF TO READ and look at online. Protocol writes about new apps that are trying — like many before — to help us find the best stuff on the internet, save it and return to it at exactly the right moment.
Hugs to this
It’s the first day of fall for those of us in the Northern Hemisphere. Let’s all take a moment to gawk at the big and beautiful harvest moon.
We want to hear from you. Tell us what you think of this newsletter and what else you’d like us to explore. You can reach us at ontech@nytimes.com.
If you don’t already get this newsletter in your inbox, please sign up here. You can also read past On Tech columns.
