Normally, I don’t eat a lot of takeout. But a couple of weeks ago, I started downloading food delivery apps with a vengeance.
Caviar? Sounds great.
DoorDash? Why not?
As soon as I added these apps, they started sending me coupons and treats.
Five dollars off your first order, promised one. Free delivery fees for your first five orders, swore another. All offered enough for a free meal — $25, $30 or even more — if I talked someone else into signing up for their services. I also noticed that each app had an additional list of specials when I opened it, along with a suite of restaurants that provided free delivery whether I was a new customer or not.
So far, I’ve tried a few of them. All of them are pretty good when it comes to both cost and convenience. On the off occasion when I’ve been too overwhelmed to deal with making dinner, I’ll scroll through the perks on offer that day and take advantage of the best deal.
I’ve decided to do this now because I know all of these goodies will be disappearing very soon — from my phone, from your phone and from the overall economy.
The reason is simple. Remember all of those IPOs that were supposed to bring a tsunami of tech wealth to wipe out what’s left of the Bay Area’s housing, lifestyle and culture this year?
Yeah, that’s not how it went.
Uber was supposed to have the biggest IPO of the year. Instead its stock has dropped 30% since that IPO, it’s laying off hundreds of employees, reporting billions of dollars’ worth of losses, and fighting the state of California to avoid paying benefits to its drivers. Analysts are saying that Uber and its closest competitor, Lyft, have “no path to profitability.”
WeWork — another company that was supposed to lead to massive “liquidity events” — was the latest to stumble into this crucible. For years, co-founder Adam Neumann put on a song-and-dance show so good, WeWork had a $47 billion valuation. Then regular investors got a look at the company’s laughable prospectus and dreadful financials. Now Neumann is out of a job and WeWork is out of the IPO race altogether.
WeWork may be a New York-based company, but the impacts of having reality set into the consumer tech marketplace will be felt by anyone who’s grown dependent on the relatively affordability of these services. That includes lots of people in the Bay Area.
Venture capitalists are talking about learning “lessons” from the WeWork debacle about “working to mitigate” risk. We recently learned Airbnb, another startup unicorn with IPO ambitions whose investors have previously touted its profitability, is actually losing money.
Unfortunately, what that means for the average consumer is that the prices and availability of all those fun, convenient services that take the edge off of urban life are about to change — dramatically.
Looking for a cheap Uber ride?
Good luck getting one of those a year from now. Just like like any other public company looking to make its numbers, Uber’s going to figure out how to raise prices.
Grown dependent on grocery delivery and meal kits?
I’ve got some bad news about Blue Apron (valuation down 95% since its IPO) and Instacart (we have no idea if it’s profitable, but it’s facing stiff competition and — let’s face it — grocery delivery has historically been little more than a money suck).
Suspending the need to schedule basic daily tasks, like cooking your own meals, because you can just get another coupon from a meal delivery app?
Need I remind you how suddenly Munchery closed its on-demand meal service earlier this year?
The party can’t last forever, and this isn’t a tragedy. Some form of honesty — or, failing that, profitability — should remain a basic business tenet for companies looking to survive.
But at some point, the venture capital subsidies are going to run out, and we’ll all be left to pay the true cost of conveniences that were, historically, luxuries.
On the one hand, it’ll be interesting to watch all of these hotshot newcomers to San Francisco who thought their lives would be fashioned around commuting in an Uber and taking regular keg breaks in their cute co-working spaces realize that they’ll have to learn how to ride Muni and set up a workspace at the public library.
On the other hand, I’m determined to yank every freebie out of companies while I still can.