• Home
  • Latest
  • Fortune 500
  • Finance
  • Tech
  • Leadership
  • Lifestyle
  • Rankings
  • Multimedia

Trendingnow

1

Jeff Bezos wants the bottom half of earners to pay zero income tax—he says nurses making just $75K should save $12K a year

2

Despite a $500 million net worth, Shaq just finished his fourth degree. He warns graduates: 'Your character will take you further than your resume'

3

Bolt CEO says he let go of his entire HR team for creating problems that didn’t exist: ‘Those problems disappeared when I let them go’ 

1

Jeff Bezos wants the bottom half of earners to pay zero income tax—he says nurses making just $75K should save $12K a year

2

Despite a $500 million net worth, Shaq just finished his fourth degree. He warns graduates: 'Your character will take you further than your resume'

3

Bolt CEO says he let go of his entire HR team for creating problems that didn’t exist: ‘Those problems disappeared when I let them go’ 
TechFortune 500

Why food delivery is an uphill battle for Amazon, Google, and Uber

By
Sarah Silbert
Sarah Silbert
Down Arrow Button Icon
By
Sarah Silbert
Sarah Silbert
Down Arrow Button Icon
September 23, 2015, 4:13 PM ET
Courtesy of Uber

For such a simple concept, the same-day delivery market is starting to look mighty complicated. Established players like Amazon are expanding to include food and alcohol on demand, while Google (GOOG) is throwing some of its substantial resources into grocery and produce delivery in select cities, building upon its Express service for dry foods and other products.

The ever-ambitious Uber is also getting in on the action, with UberEATS already up and running in several cities and its own version of restaurant delivery rumored to be launching in New York this fall. Whereas these companies once merely dipped their toes into the world of on-demand services, they’re now blurring the distinction between specialized delivery companies and full-fledged restaurant delivery services.

With so many companies vying to deliver dinner, alcohol and just about anything else, how does a consumer choose which to use? And with a business model that entails low profit margins, what’s the upside for Uber and others?

According to Sucharita Mulpuru, vice president and principal analyst at Forrester Research, while there is consumer demand for such services, it doesn’t mean success will come easily to even the heavyweights. “Every market had for years expensive B2B courier services but these players are looking to undercut those with a consumer offering,” she says. “The problem is that consumers don’t usually want to pay for this service and retailers don’t have the margin to pay for this either.”

While Amazon (AMZN) has leveraged its ample inventory to bring same-day delivery of select merchandise to 14 metro areas, food on demand is a whole other issue. As Mulpuru explains, “It’s particularly expensive to manage time-constrained, local deliveries unless you limit the delivery area and limit the number of items that can be delivered.” She points to pizza delivery as one example of this business model working; in other words, the simpler the better.

MORE: This box opens up new possibilities for fresh food delivery

Of course, Amazon, Google, and Uber aren’t the only ones to try their luck at food delivery: GrubHub-Seamless has had success acting as an intermediary between customers and restaurants, though it’s beginning to experiment with handling the deliveries itself as well.

For all these various companies—not to mention startups like Postmates—the biggest challenge is scale. For this reason, the bigger the pocket book, the better chances a business has of succeeding.

“Google could absolutely be a player here and they finally have a smart guy with a retail background trying to build this out in Brian Elliott,” says Mulpuru, referring to the general manager of Google Express. “That said, Google could very well decide this is a fool’s errand and there is no way they could do this profitably, so I wouldn’t be surprised if they say in a year, ‘we’ve tried our best…let’s bail on [this] endeavor.'”

Beyond the challenges of hiring and managing a workforce to handle the logistics of delivery, though, there’s the front end to consider. Ultimately, customer-facing infrastructure may also play a key role in determining a provider’s success—since earning loyal customers requires a simple, intuitive interface that scales well to mobile, while also incorporating excellent customer service practices.

In any case, though, this could be one instance where bigger companies are better off leaving the market to smaller startups.

“Whoever is left standing will finally admit that it’s best to just cut your losses and be a much smaller albeit profitable business,” says Mulpuru. “Uber is probably in a good position to be the last firm standing because they have a huge primary business of transporting people. To increase utilization of drivers, they may encourage drivers to take cheap package deliveries—Uber already has coverage in most major markets, and one of the biggest complaints from drivers is revenue,which this may help to address.”

Sign up for Data Sheet, Fortune’s daily newsletter about the business of technology.

For more Fortune coverage of Google’s fresh food delivery, watch this video:

About the Author
By Sarah Silbert
See full bioRight Arrow Button Icon

Latest in Tech

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025

Most Popular

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Fortune Secondary Logo
Rankings
  • 100 Best Companies
  • Fortune 500
  • Global 500
  • Fortune 500 Europe
  • Most Powerful Women
  • World's Most Admired Companies
  • See All Rankings
  • Lists Calendar
Sections
  • Finance
  • Fortune Crypto
  • Features
  • Leadership
  • Health
  • Commentary
  • Success
  • Retail
  • Mpw
  • Tech
  • Lifestyle
  • CEO Initiative
  • Asia
  • Politics
  • Conferences
  • Europe
  • Newsletters
  • Personal Finance
  • Environment
  • Magazine
  • Education
Customer Support
  • Frequently Asked Questions
  • Customer Service Portal
  • Privacy Policy
  • Terms Of Use
  • Single Issues For Purchase
  • International Print
Commercial Services
  • Advertising
  • Fortune Brand Studio
  • Fortune Analytics
  • Fortune Conferences
  • Business Development
  • Group Subscriptions
About Us
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • Facebook icon
  • Twitter icon
  • LinkedIn icon
  • Instagram icon
  • Pinterest icon

Latest in Tech

How Grab’s CTO sees the superapp’s push into physical AI and automated driving—and why he uses his competitors’ robots in the office
AITransportation
How Grab’s CTO sees the superapp’s push into physical AI and automated driving—and why he uses his competitors’ robots in the office
By Angelica AngMay 22, 2026
8 minutes ago
Trump AI and crpto czar David Sacks sits next to Meta CEO Mark Zuckerberg at a dinner table in the White House as Zuckerberg turns to Sacks and says something.
AIAmerican Politics
Tech billionaires convinced Trump to back off an AI executive order. But much of MAGA favors AI regulation
By Jeremy KahnMay 22, 2026
24 minutes ago
James Daunt sits in a booksop, gesturing with both hands and smiling.
AIbooks
Barnes & Noble CEO clarifies the bookseller’s stance on AI-written books after refusing to ban them: ‘This is a straightforward rejection of AI books’
By Sasha RogelbergMay 22, 2026
2 hours ago
A photo taken during the Maroon Bells bicycle ride during Fortune Brainstorm Tech 2019 in Aspen, Colorado. (Photo: Fortune)
InnovationBrainstorm Tech
Fortune Brainstorm Tech 2026 will be brilliant
By Andrew NuscaMay 22, 2026
3 hours ago
satya nadella
AITech
Microsoft reports are exposing AI’s real cost problem: Using the tech is more expensive than paying human employees
By Jake AngeloMay 22, 2026
4 hours ago
Sam Altman standing in a lift.
AIOpenAI
The big questions looming over OpenAI’s trillion-dollar IPO
By Beatrice NolanMay 22, 2026
4 hours ago

Most Popular

Jeff Bezos wants the bottom half of earners to pay zero income tax—he says nurses making just $75K should save $12K a year
Success
Jeff Bezos wants the bottom half of earners to pay zero income tax—he says nurses making just $75K should save $12K a year
By Preston ForeMay 21, 2026
1 day ago
Despite a $500 million net worth, Shaq just finished his fourth degree. He warns graduates: 'Your character will take you further than your resume'
Success
Despite a $500 million net worth, Shaq just finished his fourth degree. He warns graduates: 'Your character will take you further than your resume'
By Preston ForeMay 20, 2026
2 days ago
Bolt CEO says he let go of his entire HR team for creating problems that didn’t exist: ‘Those problems disappeared when I let them go’ 
Workplace Culture
Bolt CEO says he let go of his entire HR team for creating problems that didn’t exist: ‘Those problems disappeared when I let them go’ 
By Preston ForeMay 19, 2026
3 days ago
Pay transparency is exposing a bigger problem: Most companies can't explain why they pay what they pay
Workplace Culture
Pay transparency is exposing a bigger problem: Most companies can't explain why they pay what they pay
By Sydney LakeMay 20, 2026
2 days ago
McKinsey partner says up to 50% of work hours could be transformed within the next 5 years
AI
McKinsey partner says up to 50% of work hours could be transformed within the next 5 years
By Emma BurleighMay 21, 2026
1 day ago
Current price of oil as of May 21, 2026
Personal Finance
Current price of oil as of May 21, 2026
By Joseph HostetlerMay 21, 2026
1 day ago

© 2026 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell/Share My Personal Information
FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.