The world is at our fingertips. That is, if you happen to be in the right part of it.
For all the venture investment in on-demand delivery—the so-called Ubers of X, Y, and Z—the vast majority of delivery startups still have yet to overcome the limits of geography. Most are confined to a few cities, which prompts the multibillion-dollar question: Can they cover enough ground to justify their huge valuations?
“There are pockets of above-normal demand, both geographic and demographic, but just pockets,” says John Deighton, a Harvard business professor, who believes the mass market for such service is tepid. “Consumers don’t care to see online ordering thrive.”
We surveyed the top 10 delivery startups—which have collectively raised nearly a half-billion dollars, according to CB Insights—to see how much turf they claim (see map). So far, most of them reach only a handful of cities. Sprig, for example, has raised $12 million and doesn’t yet cover all of the Bay Area. For all the hype, all their coverage areas combined (plus the fledgling same-day delivery services of Uber, Amazon, and other giants) don’t touch vast swaths of the country.
“They’re not even profitable in any markets they’re in now, and those are probably the densest, greatest-demand markets that even exist for their service,” says Sucharita Mulpuru, a VP at research firm Forrester. “They can’t at this point retrench and say this idea only works in three markets. Half have taken tens of millions if not more than that in venture funding.”
Time will tell whether these Uber of X’s are, in reality, Ubers of excess. Mulpuru expects a reckoning will come. Before long investors will demand to know which of these companies will deliver.
This story is from the March 15, 2015 issue of Fortune.