Forget Swiggy, let’s talk food delivery

Ice Cream shop in Barcelona, Spain

Swiggy has been lying!!!

Okay, maybe they are not. Perhaps the ones that wrote todays trending post (unless you were living under a cave) are just some disgruntled employees. But if it’s true then it’s real bad news, not just for Swiggy but for the whole ecosystem. Bad for moral, bad for people like me who look up to them and dream of creating a product or industry that will help millions and help make the world a better place.

But let’s talk about something else, shall we?

Here goes nothing from a noob. Read at your own risk. Ready?

What part of “food delivery” do this startups don’t understand? Sounds like all of it.

Economies of scale is a phrase loved by many in the startup world and so does many in the world of food tech startups too. Enabling tech to food delivery has helped millions of hungry users order in seconds and get realtime updates on how far that yummy dessert is from their mouth. Plus it has given restaurants access to thousands of potential customers.

The backbone to all this? The delivery system.

Now, sadly so, you cannot improve the economies of delivery by employing thousands of partners. Not without a better way. Restaurants have been delivering even before the Swiggy’s and the Zomato’s of the world came into picture. What has changed is now multiple orders from multiple users from multiple restaurants at multiple locations are being delivered by the same guy.

It did help reduce the cost and fast, yes.

Thank you, but is it that simple? Nope.

Food isn’t something that producers — in this case restaurants — make a huge margin on. It’s a crowded market and most restaurants only manage to survive, not thrive.

In comes so called food-tech companies with a “mission and vision” to fix the miseries of millions of hungry urbanites by promising instant deliveries of chef approved food at nominal rates. In they bring thousands and hundreds of dollars from visionary investors into the ecosystem. They create hundreds of jobs, enable efficient (not me) delivery systems, move fast and break things by burning investors money.

Burning money is the norm now, isn’t it?

Growth at the expense of big bucks? Not cool.

Throwing money at a problem has never solved any sane problem. We need innovation that will actually help scale delivery systems. Think about a delivery superhighway of sorts.

Food tech companies need more than a balance of supply and demand to improve their unit economics. Unit economics in the current scenario doesn’t make any sense for a good tech-enabled food delivery company. The only to way make “real” profit right now is by either feeding themselves on the restaurants margins or by letting customers pay a premium. I don’t think restaurants and customers will agree upon this.

Now, food tech startups can certainly make a dime or two out of it, but then they should keep the tech out of their vocabulary and start to call themselves a food delivery company rather then a food “tech” company.

Another fix? Yes, people seem to think there is.

Cloud kitchens were being whispered into known ears ever since the term food tech was born, but then of course it has one fundamental physics puzzle to solve before declaring itself scalable. The puzzle of space and time. Else they are the same as existing mom and pop restaurants minus the extra real estate cost.

Anyway, without any “real” innovation in the way we prepare or deliver food the end of food tech is crystal clear. What kind of an end you ask? You tell me.

Note: Opinions are personal and based on the limited resources that I have been able to get my hands on. Feedbacks and critics are most welcome.