The economics of food delivery platforms

On the cost side, the marginal cost of delivery plays an important role. Food delivery platforms work with very thin margins per order. Hence, route optimization and number of orders per route are important criteria.

Delivery platforms, in general, control the delivery price and payout policies, with no control for the delivery agent.

The higher the customer retention and the faster you can move a cohort of customers to peak customer spend, the more likely you are to make the unit economics work.

Given the importance of route optimization and maximizing orders per delivery run, Asian food delivery platforms may have a much better shot at improving margins.