I’m not convinced that the big gig economy companies have viable business models - more tangible, yes, but not necessarily ever sustainably profitable. Naked Capitalism’s amazing long series on Uber is really worth a read. From earlier this year, on Uber’s much vaunted Eats service:

As this series has discussed at length, while no one has any plausible plan for achieving sustainable ridesharing profitability, the economics of the fiercely competitive food delivery business are substantially worse. In eight years DoorDash, the dominant US company, never made a profit. The CEO of Grub Hub, the number two company, said food delivery “is and always will be a crummy business.”

Even by Uber’s crude “Segment Adjusted EBITDA profitability” metric delivery services were 63 margin points worse than ridesharing in 4Q2019 and were still 25 margin points worse in 4Q2021. Uber’s new emphasis on using food delivery to inflate trip volumes and total revenue recognized that throughout its history capital markets had myopically focused on the rapid growth of these top-line numbers while totally ignoring the question of whether that growth would ever produce sustainable profits.

Uber’s food delivery strategy depends entirely on driving the industry consolidation that might allow it to exert much greater anti-competitive market power over drivers and restaurants. It attempted to acquire Grubhub (a rollup of 12 previously independent competitors), which would have allowed the merged company to leapfrog over Doordash with a 58% market share. When that failed, it spent $2.6 billion to acquire Postmates, giving Uber Eats a slightly stronger (32%) third place market share. It also acquired Drizly and GoPuff, in the hopes of achieving the type of powerful position in liquor and convenience store deliveries that it has been unable to achieve in food or grocery deliveries. [9]

There is absolutely no evidence showing that extreme industry concentration could be achieved, or that it might make these hugely unprofitable companies viable. Certainly no one has laid out a path that might allow Uber Eats or the other delivery companies to achieve profitability without significantly reducing competition. Despite Uber Eats’ unprofitability and limited market share, the FTC has opened a new review of the Drizly/GoPuff acquisition, recognizing that their only plausible basis was the elimination of competition and the hope of being able to squeeze drivers and suppliers. [10] Unlike ridesharing where the drivers and traditional taxi companies harmed by Uber and Lyft’s pursuit of dominance and market power have no meaningful political voice, the restaurants that have been crippled by the delivery fees charged by the big venture capital funded companies have found sympathetic local governments officials willing to consider delivery fee caps and other actions to protect competition.

This is notwithstanding a potential impending collapse in demand for non-essentials (food delivery and taxis) during the unfolding recession/depression - just how their business model has been during “good” times.