The strategy is largely out of the same playbook as other on-demand apps—capture customers, consolidate control over a high-frequency behavior, expand and cross-sell to other higher-margin categories. But their challenges are significant as well, from spoilage rates on grocery to hard-to-predict inventory requirements and building relationships wit... See more

Grubhub’s original model was a marketplace for consumers to order food from independent restaurants that already had their own delivery fleets. Though this was a game-changer for consumers, it constrained supply to only listing restaurants that could perform their own deliveries. This was a mistake.