# The unit economics of food-delivery apps

**Published by:** [Brandon Donnelly](https://brandondonnelly.com/)
**Published on:** 2021-10-13
**Categories:** food, food-delivery, food-delivery-platforms, mckinsey, tech, uber-eats, urbanism
**URL:** https://brandondonnelly.com/the-unit-economics-of-food-delivery-apps

## Content

Here is another article/report thing from McKinsey talking about the "fast-growing food-delivery ecosystem." In the US, the top food-delivery players are DoorDash, Uber Eats, and Grubhub (in this order). What is clear is that these platforms are growing very quickly and that COVID-19 was of course great for the business of eating at home. The demand is there. But what is also clear is that food-delivery is a low-margin business that depends on scale. Last-mile and single-point delivery is tough. This is despite the fact that consumers have shown to be willing to pay a fairly significant premium in exchange for the conveniences of on-demand meals. Here's a chart from McKinsey that looks at the unit economics of delivery apps:It is a race to capture "stomach share." But surely this evolves and gets further optimized with the continued rise of things like "ghost kitchens" and maybe autonomous delivery robots. I remember driving home one night during the thick of the pandemic and placing an order on Uber Eats for pickup. When I arrived, I found a small food truck and one lonely guy in the middle of an empty (and wintery) parking lot on Lake Shore East. He handed me my poke bowls and I was on my way. This is what is happening behind our apps and it's changing the way we eat.

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