Delivery apps struggle with profitability for several reasons. First, they lack differentiation, which gives the platforms limited pricing power. Everyone engages in “multi-homing”. As a consumer, you have multiple apps and you check prices on each before ordering, thus limiting what an app can charge.
Grab reported its 2QFY2024 results in August. While it still makes an operating loss, it has projected positive adjusted free cash flow for the current year, unlike in previous years.
However, this will continue to be a challenging business model. These gig economy firms, beloved by consumers and responsible for creating substantial employment, have generally received a free pass with respect to profits, people, planet and privacy.
