This is essentially the story of tech companies across nearly every industry where they have come to dominate.
This is one reason that I see most tech companies as essentially a net negative for society at large, as the goal is nearly always to control a large monopoly (and this is fully admitted by many tech leaders, e.g. Thiel) which the Internet makes possible. Pre-Internet you would see the same dynamics, but usually on a much smaller regional scale. I think that many of the growing problems in society today are fundamentally attributable to the extreme concentration of wealth and power that modern tech enables.
There's a George Carlin bit about politicians. The punchline is "the problem isn't the politicians, it's the people." His point is that nothing emerges from a vaccuum.
Politicians are people just like everyone else, they're just responding to incentives created by a majority vote. Tech companies are just like any other company, except a lot more people are willing to pay for their goods and services. If Carlin were alive, he'd say that the problem isn't the tech companies, it's their customers.
I'm actually far from convinced that tech companies are a net negative for society. Amazon makes billions because everyone wants competitively priced goods delivered to their doorsteps. Google makes billions because they provide free access to a large portion of humanity's information.
My theory is that if you're extremely pessimistic about technology or politics, you probably won't like anything that happens when large groups of humans make collective decisions. There's an air of let's go back to the good old days when we were hunter gatherers to the whole thing. Personally, I've accepted that it's always going to be messy and chaotic, but a lot of good things are going to come out of it as well.
> There's an air of let's go back to the good old days when we were hunter gatherers to the whole thing.
I strongly disagree. On the contrary, I see the arch of many technological advancements in that, in the beginning, they solve a crucial need, but then once they solve that problem they attempt to hijack the positive feedback systems of humans (e.g. addiction systems) to stay in power.
Consider the food industry. Many people were under pretty constant threat of starvation through much of human history. So in the 19th and 20th centuries we essentially solved that problem in the Western world with the modern food industry. But we didn't stop there. Once people had all they needed to eat, food companies had to figure out how to get them to eat more, and they were highly successful. Saying that much of modern food science is a net negative for humanity doesn't mean I think we should go back to being hunter gatherers, but at this point every new "innovation" in the industry is really just an attempt to try to get people to eat/drink more.
I think much of the modern Internet/Web has been on that "net negative" slide for at least the past 10 years. Are people at large to blame for this? In one sense, sure. But I have no problem laying the blame at tech leaders who are essentially in the role of drug dealers for much of the industry. I mean, sure, drug users are ultimately at fault too, but we look down pretty harshly at drug dealers for their role in the process.
End state of market economics leads to cartel and monopoly.
In tech this is done by controlling people's information and collecting their personal data
Combine the centralization with control and privacy intrusion with authoritarianism in government and you have a worse than 1984 future
It's all RIGHT THERE. Turnkey. Ready to go. And all the cultural institutions in government, the popular those of the ultra rich, the populist desperation of the poor, disappearance of the middle class, is leading to authoritarianism.
Just because Americans have an obesity problem doesn't make every food vendor a drug dealer. Come on, get real. Basically everything that is being sold can be abused by the user. Does that mean every vendor of anything is potentially a bad actor? I believe you are exaggregating. BTW, I virtually never thought about Thiel when I ordered a Pizza. Is there a reason why you drag the owners into this? It basically sounds like you are antagonising everyone above your wage-class. I don't get it.
It’s by degrees right? You can make a business that treats people as well as you can manage while feeding yourself, but almost anybody will want more than that, and some people want way more than that for a variety of social and innate reasons. Eventually you cross some arbitrary threshold where you’re doing, or at least enabling, really awful mistreatment of people and you use the level of indirection you have or some ideology or some excuse to justify it, but that’s when it’s a problem. People above the parent commentor’s wage class just so happen to also be the people most susceptible to this process, which is why they’re in a high position in the first place. Also, not that this is particularly important, but many or most of them (the extremely rich) dislike and look down on you because they need to in order to feel alright about their position. You don’t owe them kindness that they won’t return.
>Also, not that this is particularly important, but many or most of them (the extremely rich) dislike and look down on you because they need to in order to feel alright about their position
The rich don't give a shit. They're comfortable in their position. It's the uppity doctors, lawyers, techies, and everyone else with an office job that need to feel like they're better than the plumber, line cook and brick layer.
Every idiot who lives in a good school district with manicured lawns and reads the nutrition facts on the frozen dinner they're buying at Target thinks they're saving the world by telling the politicians to ban fireworks and menthols.
> The rich don't give a shit. They're comfortable in their position.
I don’t get why you say this. Almost everyone has a need to feel like a good person, justified, etc, and the easiest way for someone with a several hundred million plus net worth to feel that way is to believe that they earned it, are special and that normal people are too stupid to do the same thing. There’s lots of other options for justifications but none of them are particularly flattering to the have-nots.
I think OP's point wasn't so much about the fundamental services being bad or harmful to most of their users, but rather about the over-optimization of every single tech service toward finding ways to build on people's bad instincts and decision-making to squeeze just a penny more out of them.
When no ceiling is imposed, the natural state of business is to consume all oxygen.
It doesn’t matter that you don’t know who Peter Theil is when you buy a pizza. It matters that he somehow makes money from that pizza and if he can, he will extract more value than the pizza guy.
The pizza guy had 30 years to conquer the internet. They could have hired a coder to do their online order website. 12 years later, they could have hired a coder to create an ordering app. Most of them didn't, because they weren't willing to part with the money. Now, Lieferando takes a 10% cut from every order because they created infrastructure the customer actually wants to use. What is so bad about it? You can only cut out the middle man if the vendor is going with the times.
Or they can just make pizza. Meanwhile, I could get a $11 pie delivered with a phone call 20 years ago, and now I’m paying $35 for some stupid cloud app to do the same thing.
It's not black and white, but what you're saying sounds like "just because users have an attention problem doesn't make every social media app an attention grabber"
I mean, companies optimise for profits and at some point people fall for it in excess which is the point OP made.
It kinda makes sense, because the means the companies employ are psychologically advanced plays on people who don't know the spelling of psychology.
I'm probably manipulated into scrolling more than I wanted to or buying more than I wanted to on an everyday basis.
> Does that mean every vendor of anything is potentially a bad actor
Yes, of course they are. Left unregulated they will form cartels. As Adam Smith said, "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."
They will try to raise barriers to entry as well, to limit competition. They will try to increase sales by many means.
They may be ethical enough not to do all that, but the potential is definitely there.
Are cartels inherently unethical? The US government approves of and protects certain cartels (e.g. unions, hospital systems, defense contractors).
If anything, cartels thrive under heavily regulated and dirigiste economic systems, where as in an unregulated market a cartel would eventually lose to a competitor or succumb to infighting.
We don’t have to go back to hunter gatherer societies, just do some antitrust. I dislike the commentary that any pushback against tech companies means you’re a Luddite
Put a cap on company size. No organisation can be worth more than (say) a few hundred million. You can still make big and complex things but it'll have to be several small(er) companies working in concert, which is already kind of how massive companies work internally anyway. Less efficient, maybe, but I am not entirely convinced that huge companies hoovering up any attempt at competition leads to efficiencies in the long run. And the more value that can be extracted by smaller players, the more that ends up in the hands of humans rather than pooling R the top. Maybe have a credit for capital outlay so building and operating a factory is better than building a financial war chest, and a credit for non-executive salaries so paying your workers increases your company's headroom.
Capital gains tax that increases progressively with gains, and decreases progressively with duration i.e. incentivize significant investors to create long term value instead of chasing quick exits.
Anti-trust for an industry where there are at least five companies doing well in any given space? That's not called a monopoly, it's called competition.
Edit: I wasn't accusing everyone who is critical of tech of being a Luddite. The attitude that nearly every tech company is a net negative for society goes quite a bit beyond criticism.
> Anti-trust for an industry where there are at least five companies doing well in any given space? That's not called a monopoly, it's called competition
You need to be completely out of touch with reality to read an article on 5 companies dominating a global market and your take from that info is that there are no anticompetitive practices because 5 is more than 1.
In the IO literature it would be expected that five companies of vaguely similar size in oligopolistic competition (say Cournot competition for simplicity) would be pretty close to the equilibrium of a perfectly competitive market.
I don't think that simply the ability to perform a task is sufficient for competition. It could still be impossible for a newcomer to compete with established corps' marketing budget and economies of scale.
The point is who cares. Getting a burrito delivered is a pointless luxury service that no one actually needs. Instead of complaining about competition, just stop wasting money on it.
You don't care. That's fine. It's not like there is a retirement to be informed before commenting. Sit this one out and let everyone who do express their concerns.
If five companies competing is anti-competitive, then how many competitors does it take to suddenly become competitive and why? What is the significance of this larger-than-five number? Is it the same across industries? How do you derive it?
This seems to rest on the mistaken belief that a corollary of monopolies being bad is that more competition is always better than less competition. If everyone was a competitor in the restaurant food delivery market we'd all starve to death as no one would be growing food. An efficient economy wouldn't waste resources competing over less important things like restaurant food delivery over something more beneficial.
Perhaps the issue isn't whether there is a specific number of companies. It seems to me that there is a competition problem when companies behave in a way that is harmful/disliked/bad but no one steps in to provide an alternative because they can't compete with established marketing, economies of scale, network effects, etc.
"completely out of touch" is definitely an exaggregationg. Besides, as if competition would really increase quality. Where I dwell, we have around 3 active delivery services. Only 1 of them has an app with useable UX, icnluding accessibility. Competition? Meh. What for? So that I can watch the smaller guys blunder their way to the top?
> "completely out of touch" is definitely an exaggregationg.
Is it, though? I mean, can you present a coherent argument supporting the idea that a global market being dominated by 5 multinational corporations does not flag a risk of anticompetitive practices?
> Competition? Meh. What for? So that I can watch the smaller guys blunder their way to the top?
Is this what you have to offer to refute the idea you're completely out of touch?
If by "coherent" you mean the Webster definition then yeah, anyone can.
If by coherent you mean "using only facts and opinions that I accept at face value within my world view" then no.
Personally, I think 5 is way too little. But there are probably some markets for various products and services where 5 is fine. I don't think the number matters so much as that there be potential for a long tail of upstarts who could potentially displace a big player quickly. Whether 95% of the market is captured 2 or 22 players doesn't matter, they gotta know that someone is waiting to take their place if they screw up.
Where does the article mention barriers to entry? My reading is that that the consolidation is due to venture capital moving investment to other areas. Anyone who wants to start a new food delivery app is still free to do so, as long as they can find funding.
This is the definition of competition according to Wikipedia: "Competition is a scenario where different economic firms are in contention to obtain goods that are limited by varying the elements of the marketing mix: price, product, promotion and place."
Yes, sounds like competition to me. Network effects are not anti-competitive.
> Anyone who wants to start a new food delivery app is still free to do so, as long as they can find funding.
This argument is meaningless because you can always make it. There's a quasi-monopoly? Yeah but you're still allowed to make a new company so it's not really a problem is it? You'll fail, unless you're backed by even more powerful venture capital, but I don't care about that because I get to keep making the argument that it's a free market.
The reality is that the only way you can compete in this market is to already be a billion dollar company, or have the backing of one. That's not a free market by any reasonable definition.
Now imagine you live in one of the other 190 countries of the world who do not or no longer have significant players in the industry because they were crushed by those five foreign companies. It's not competition when the wealth and power is so disproportionately held by the same people in the same places.
China (basically) only has didi. Not much the USA can say here.
Southeast has Grab, and within each country there are at least 2 local competitors (Be, GoJek, Bolt, Line Man, Bluebird, etc). I believe Doordash just bought Deliveroo, making it the only American competitor in SEA.
In Europe, the main players are local food panda / Delivery hero and Just Eat.
India's winning food delivery is Swiggy.
What countries have both the talent to build a food delivery app and the USA is the dominant player?
Every country has the talent, software development isn't some esoteric knowledge. But even if you imagine that only people in developed countries are capable of writing software, there is Australia, New Zealand, Canada and Taiwan for starters.
I don't think it makes sense to focus on the US when three of the five companies in the article are from Germany, Netherlands and China. The problem is not America per se, it's the pattern of large and often (but not always) foreign companies extracting wealth from what used to be hyper-local operations.
> What countries have both the talent to build a food delivery app
It's not about "talent" these are utterly pedestrian apps that anyone mediocre team can fart out in a quick amount of time. It's about capital for massive scale, massive advertising, literal VC-subsidised dumping, takeovers of the competition, etc.
Sure, go to each country and check what food delivery companies operate in them, get a list of companies operating in the market that are not controlled by the big 5 mentioned in the article.
In Europe there were a few companies operating in the sector which were taken over by these global companies. I recall the Glovo takeover by Delivery Hero. You mention Foodpanda but you seem to be unaware this is a brand from Delivery Hero, and Just Eat is a Prosus company too.
> What countries have both the talent to build a food delivery app and the USA is the dominant player?
I'm baffled by your comment. Do you believe only the US has "the talent" to put together a food delivery business? Because even if you ignore the fact that 2 out of the 5 dominant players are not US companies, you need to be way out of touch with the reality of both the technology side and business side.
I work at Grab (and ex-Yelp). I am very familiar with FoodPanda and their owners as they are a direct competitor to my employer. I literally work for one of the non-American "local" food delivery services. But within out region, there are reasons we don't have technology offices in every country we operate in and we have tech offices in countries we don't operate in.
There are also reasons that we continue to exist while our competition pulls out of the region. There are also many reasons why hyper-local delivery services aren't able to compete with global or regional winners: Talent, access to capital, and TAM are big parts of that equation.
If someone that works for a non-american food delivery service provider is out of touch, I wonder what your credentials are that puts you in touch.
Also, in the blog, 2 of the 5 players ARE American (Doordash and Uber). The other 3 are European and Chinese.
As a software engineer in the US, I like that the US sucks up money from the rest of the world, that’s why my dollar goes so far when I travel and why I can retire in a non-reserve-currency country for cheap
Do you not feel as though that's incredibly anti-social? It's a very zero-sum "I'd prefer if things were better for me in direct proportion to how much worse they'll be for '_others_'"
There’s such a thing as collusion - convenient way to claim “we’re not a monopoly, there’s at least 4 more competitors” when behind the scenes they’re all talking and agreeing in price fixing, limiting offer, blocking other competitors.
That is known as a "cartel," which is also prosecutable under the Sherman Act. It applies to not just monopolies. But that doesn't seem to be the case here.
Carlin's actual view is a lot more nuanced than that. Big Tech (along with Walmart, Visa and more) have gotten to where they are by employing illegal business practices such as price discrimination and exclusive dealing. These tactics laid the groundwork for the mass mergers and rollups and the monopolies and oligopolies that dominate America today. The laws on the books which prohibit them, like Robinson-Patman and the Clayton Act, have gone largely unenforced since Reagan. Software sped up how quickly businesses can exploit these criminal tactics but this has become a problem across all sectors of the economy.
This shocking degree of negligence has required complicity from both political parties, but there's a deeper issue which is that this stuff is just too arcane to be linked meaningfully to a popular vote in today's democracy. We're talking about a nation where 1 in 5 people are now illiterate and that number is rising. There are two parties and a vanishingly small number of candidates presented to them every couple of years, meanwhile the media bombards them with a dozen supposed crises every day. This system is never going to produce a consensus that the most important priority is enforcing some law from 1914. Popular sentiment is more likely to be expressed through the rise of more guys like Luigi Mangione.
The ever-increasing flood of information (crises, as you call them) will, I believe, eventually become the downfall of our political system. There is already so much to read in a single day that you probably couldn't consume it all in your remaining lifetime if you tried. LLMs will only make this worse. Eventually, super-powers—whether political or economic—will send out so much misinformation about everything that no one can really follow it or distinguish truth from falsehood. People will simply stop participating in the global conversation, and their votes will become obsolete and guided by the most intruiging stories.
Tech companies are not like other companies because they can trivially create vendor lock-in without any geographic constraints on where the customers are.
In fact, it's harder to avoid vendor-lock in in tech; it takes extra work to open things up, possibly a lot of extra work.
Even a well-intentioned open-source program can garner a user base which can't easily migrate off it.
Then let's use regulation to flip that around, and put the onus on the party that
a) is making money off it
b) has a vested interest in increasing lock-in
c) is a singular entity, not a dispersed set of individuals
d) is doing this as part of something specific and organized, rather than just trying to go about their daily lives, buying an orange here and a smartphone there
I generally agree with your point, but would like to mention in my opinion Amazon (not AWS) makes billions because they've captured the market and prevent any meaningful competition from arising due to their "Fair Pricing" policy rules. I'll be happy when there are meaningful alternatives to Amazon that don't have inflated prices due to price parity which have an excessive return cost built in...
Lobbyists muddy the incentive waters a bit when it comes to politics.
But I agree with your conclusion. I don't think there are many truly net negative companies/sectors/ideas that aren't either dead or on their way out -- but I'm sure you'd agree we should still hold tech accountable and optimize for our own benefit.
Btw, as a lifelong Carlin fan, I find myself asking what he would think pretty often :)
Carlin was a true philosopher. I find myself disagreeing with him more these days than when I was younger and angrier, but I still find him endlessly entertaining.
My theory is that is what is latent in the terrain of human psychology is a propensity to view misconceptions about which problem it is, as evidence there isn't one. When I stop to think about it, I realize that the misconceptions are evidence there is.
With that in mind: in what way should we terraform the latent terrain of human psychology to fix this problem? Because breaking up the tech companies seems like a way, but you seem to have a different one in mind.
I think there's a power dynamic that it seems like you are ignoring, that big companies take advantage of. Amazon gets cheap goods to your doorstep, and removes all competition while doing it. You think those goods are going to stay cheap,i don't. This is a playbook that wallmarts followed for years. Amazon also gets sellers, by selling amazon versions of their products. Google makes billions by showing you ads, they got you there with free services, but now they enshittify.
>There's an air of let's go back to the good old days when we were hunter gatherers to the whole thing
I think my concern is not going back to the bad old gilded age days, where wealth inequality lead to most humans having a terrible life while a few had a great life.
> My theory is that if you're extremely pessimistic about technology or politics, you probably won't like anything that happens when large groups of humans make collective decisions.
The main issue is that in tech and politics it is a small group of humans making collective decisions for all.
Carlin's comedy peaked during near the era that I think most consider the Golden Age of America. Times have immeasurably changed since then.
On the tech side of things Google has recently been hit by multiple anti-trust lawsuits, and lost them all. That's perhaps even less telling than the evidence presented. They brazenly and actively conspired to kill or buy any and all competition, but they've become so large (and so important to the US intelligence agencies) that they'll get nothing more than the most gentle slap on the wrist, relative to their scale. The moral of the story seems to be don't cheat, but if you're going to cheat - cheat relentlessly, ruthlessly, and take it to an extreme - and it might just become worth it.
Politics has become similar. Politicians have become way better at their jobs in modern times than in Carlin's era. Their "job" of course is just to get elected. It turns out that actually having a platform or popular ideas is far less useful than making people hate and fear 'the other guy' enough. When you rely on hate and fear, people will even actively vote for people they despise simply because 'it's the lesser evil.' With modern politicking even Reagan-Mondale would have still been a 50/50 coinflip and Regan would be an imminent threat to American democracy, and Mondale would want to turn your kids gay. Actually if we reached the modern era of divisiveness and stupidity in Carlin's time, there's a real chance America, certainly as we know it, wouldn't even exist today.
>They brazenly and actively conspired to kill or buy any and all competition, but they've become so large (and so important to the US intelligence agencies) that they'll get nothing more than the most gentle slap on the wrist, relative to their scale. The moral of the story seems to be don't cheat, but if you're going to cheat - cheat relentlessly, ruthlessly, and take it to an extreme - and it might just become worth it.
The moral of the story to me is that the government doesn't give a crap what you do so long as it's good for them. Google only got punished, and even then it was a big "show" with no results not because it did wrong, but because it so flagrantly violated the law the government got pissed that it was being made to look a fool. They didn't really want to "punish" google because it was their buddy and they found it useful, they just wanted the appearance.
"Monopoly" used to mean a single company controlling a market. Now folks are now hollering "monopoly" about five different companies competing and collectively capturing 90% of a market?
Plus the market is artificially defined to be small. It excluded companies that do their own delivery (pizza places and others), home food delivery that isn't from restaurants, and the old option of just driving yourself to a restaurant.
There's thriving competition in the industry of getting people food, and lots of options that didn't even exist a decade ago. Crazy that it's being spun as the exact opposite.
> "Monopoly" used to mean a single company controlling a market. Now folks are now hollering "monopoly" about five different companies competing and collectively capturing 90% of a market?
Five companies controlling 90% of the market is more than enough to form a cartel or spontaneously self-organise in ways that have the same effect even without explicitly coordinating. (I once read an economics paper that I wish I could find now that said this would happen when the top 4 companies in an industry controlled more than 60% of the market)
What are the primary problems with monopolies? Do you think those exact same problems could be seen by a small group of of companies who act in a monopolistic manner (much like a cartel)?
I think you are stuck on the definition of the word monopoly rather than the reason behind why we ban/rule against them.
Both things can be true. Amazon is great for consumers, Google is great for consumers, no doubt. But consolidation of economic power under tech juggernauts I would argue is a net negative for society over the long run. The tech giants are not at fault, neither are the consumers, the fault lies with the system in which they operate that allows one outcome while ignoring another (potentially bad) one. What we need to do is change the rules.
You're right in a sense. The thing is what people are "willing" to do or what they "want" is a somewhat amorphous concept and depends on how options are presented to people.
Human nature involves the ability to let different dimensions of our cognitive apparatus cover one another's weak spots. In my view, a lot of what many would consider wise decisions throughout human history have been instances of this, many of them in the form of law, from child-labor restrictions to drunk-driving laws to birth control to incest taboos.
There just seems to be a certain segment of society that for some reason insists that "what the consumer wants" has to be construed in this narrow way as what is in the person's mind at the instant of a decision, and that any attempt to broaden that person's decision-making is somehow unnatural. Well, no. It's good to make changes that create immediate costs if doing so can save us from future costs that we're not good at foreseeing at the moment. It's good for Ulysses to ask his men to tie him to the mast. It's good in many cases for people to deliberately, explicitly, not do things they feel like doing because they will regret those things later. I believe this is often true even from a perspective of self-interest (e.g., people will not like it if a monopoly emerges and raises prices later), but it's even more true if you incorporate a bit of consideration for the well-being of others, and I think plenty of people are willing to do that to some extent.
> Politicians are people just like everyone else, they're just responding to incentives created by a majority vote.
I don't think this is remotely true, and feels like victim blaming. No one is voting for monopolies and exploitation. At most you have people voting for tax cuts and the hopes of improved economies, which are then faced with a bait-and-switch of erosion of legal rights and protection and further anticompetitive practices.
These so-called "food delivery" companies are the worst example possible as they are renowned for the way they exploit employees with blatant violations of basic labor laws. No one voted for that.
> Tech companies are just like any other company, except a lot more people are willing to pay for their goods and services.
No. Their whole business model is based on exploitation to the point some countries had to force them to finally get their riders into actual employment contracts.
> I'm actually far from convinced that tech companies are a net negative for society. Amazon makes billions because everyone wants competitively priced goods delivered to their doorsteps. Google makes billions because they provide free access to a large portion of humanity's information.
You have a far too naive and out of touch view on the problem, much like a few years ago people from colonial powers believed their presence was net positive for natives as that meant they could receive a salary for waiting on them hand and foot. Amazon's example is even more laughable as the company is notorious for exploitative and outright abusive labor practices. I understand you like to receive packages, but I seriously recommend you read something on the topic because their impact on society is far from net positive.
Yeah it’s Soylent green all the way down; just people hiding behind allowed legal obfuscation.
Physics is inviolable. Human tech will never succeed in the fancy things we imagine. No evidence it allows such things naturally. We’ll conjure a bunch of artistic representations, but never harness enough energy to break things.
Hunter gathering is a bit far back. Since none of the geniuses can guarantee 100 generations from now will still care about rockets to Mars, listening to them today about the far future is asinine.
Keep enough food and hardware stores around and give people time back.
I’m anti story mode and that means Sam Altman’s or some notion of future human greatness. Fellow US readers; yeah that’s right I don’t care you exist. You keep me off the hook for your healthcare, good luck. Why would I care when you keep yourself off the hook for my healthcare? Fuck you.
I’m fucking sick of Americans clearly being low skilled useless to themselves exploiters of others for zero in return but a made up story. In all my study of physical science I never come across evidence any of this wanky web tech is a fundamental force. Occam’s razor applied, it’s all just the hallucinations of arbitrary meat people.
Inequality is built into our society’s structure - capitalism divides people into two classes - workers and owners. The level of wealth inequality in the current world is quite extreme. Even if you accept some degree of it because “it’s always going to be messy and chaotic” - the current level is truly poisonous for a healthy society. And it’s the result of neoliberal policy across the world since 1980 - the deregulation ideology of the rich filtered into governments. We have concentrated wealth; this wealth concentration has intensified itself as those benefiting from it in turn shape government policy in a vicious circle. The bleak world today is shaped by these forces - impending climate catastrophe (as fossil fuel interests can’t be reigned in), austerity (as the rich refuse taxes and control the governments who would tax them), authoritarianism (as the relationship between money and power can’t be bothered with pretense anymore), concentration camps (as the wealthy manufacture scapegoats for the mess they’ve made).
Turning around and blaming consumers for this while pretending it couldn’t be better both is truly a shallow take. Carlin wouldn’t let these people off the hook like you do:
> A person of good intelligence and of sensitivity cannot exist in this society very long without having some anger about the inequality - and it's not just a bleeding-heart, knee-jerk, liberal kind of a thing - it is just a normal human reaction to a nonsensical set of values where we have cinnamon flavored dental floss and there are people sleeping in the street
Is it really worse now than hundreds or thousands of years ago when there were kings and pharaohs and other rulers that had literal peasants and slaves and such all working for them?
I don't know, but it fees like people are more equal now than back then at least to me. Or more people have a much higher standard of living at least.
Realistically climate catastrophe seems worse to me yes than living as a peasant or ancient Egyptian. Our choices aren’t so limited however. But if you mean we should look at our standard of living today and appreciate them, let’s examine that with some nuance.
Since 1980 pay and productivity have been decoupled in the global north such that the wealthy have continued to grow richer while the median worker hasn’t seen their real wages rise, despite being more productive. In fact much of our rise in standard of living prior to 1980 is not due to the allowing concentrated wealth to run rampant but people fighting the wealthy for things like worker rights, democratic rights, social programs.
If we look at the global south on the other hand since 1980 we see a great rise out of poverty. This has happened primarily due to China’s socialist policies which have pulled 800 million people out of poverty.
Allowing a small wealthy minority to run one’s country is undemocratic as they are able to use their outsized money and power to control the government and further grow their own wealth. It’s precisely why we face problems like authoritarianism, climate change, and austerity - toxic transitions all funded by monied interests.
Does the world really seem like it’s continuing to progress to you? Is our choice really so limited as either ‘hand over the reigns of society to billionaires’ or ‘revert to medieval peasantry’? Consider the improvements in the quality of life we’ve seen in the past century. People came together and fought for those improvements. They didn’t trust and depend on their monied masters to drop crumbs their way. That never happens. They fought for better lives and achieved them.
To me it only seems like we are in a quite small scale decline in the otherwise long term upward trajectory of standard of living for the average human being. The overall upward trajectory that I think is mainly driven by technology, abundance, and prosperity.
I’m puzzled by your view but also curious. What’s short term about the climate crisis? And with intensifying authoritarianism what do you think is going to reverse our current trajectory? And what do you think determines whether standard of living rises or not? In our circumstances, which to me seem quite dire, I’m curious what motor you think powers human progress.
When did the discussion turn into climate crisis? I thought this was about quality of life. That's all I am talking about here.
Quality of life is determined by how well off the poor or average people can live. How "easy" their life is and what luxuries they can afford, how long they now can live etc.
I think the advent of technology and mass commercial farming food production and all that allows the general population to live easier lives than what you had to do to survive hundreds and thousands of years ago in like medieval times or ancient Egyptian times etc.
I think any little regression in quality of life in these last few decades is but a small downward blip in the greater and steady rise during all of human history.
I guess with the impending climate crisis quality of life will very likely go way down.
Climate catastrophe is expected to destabilize societies. A natural outcome from that could plausibly be the rise of extreme ideologies that advocate for nuclear conflict for example. It’s plausible human beings face an existential threat in the coming decades.
I think human progress is a chaotic process dependent on human choices, not a determined one. For example some hunter gatherer societies have lived lives of leisure working as little as 15-20 hours per week - quite a lot of ease compared to the modern work week most of us see. Human history is much more heterogenous and chaotic than what one might conclude from a perspective limited to today, medieval peasants, and ancient Egypt.
Luxuries I think should be viewed critically also. The effect of luxuries is unfortunately likely canceled by the hedonic treadmill. In our current society roughly 30% of people are suffering from mental illness like anxiety or depression. This is despite having iPhones instead of landlines.
You are right that longevity has increased over the long term. I think this is a stronger area of your argument. But is longevity alone a good measure for quality of life? I think we should include other factors, like happiness. Unfortunately we just don’t have those statistics over any meaningful horizon.
Overall I think measuring quality of life over the long history of our species isn’t quite as straightforward as you make it out to be. We must be wary of adopting just so stories. Quite a lot of heterogeneous human experience falls under this generalization, and most of it, at the very least, we just don’t have good data for.
In my view, progress that human beings experience is contingent, the result of our choices. Sadly I don’t think there is an arrow of history that guarantees a better future for our species. The risks we face in the upcoming years are immense. If there is a better future waiting for us, I believe it’s one we will have to fashion ourselves. Relying on an abstract concept like the arrow of progress can even be dangerous if it misleads us into forsaking our agency in fashioning our collective future.
> My theory is that if you're extremely pessimistic about technology or politics, you probably won't like anything that happens when large groups of humans make collective decisions. There's an air of let's go back to the good old days when we were hunter gatherers to the whole thing.
Hunter gatherer is the only alternative to a society under total dominance by mega-corps? This reminds me of individual stories from life under communism and brutal dictatorships where the dystopia is so omnipresent you don’t even remember what was before, nor could imagine anything meaningfully different. Instead, you take joy in the little things, like (today) the scraps left over after another market war – ”at least now we have a search engine”, ”I can order a taxi from an app”. I understand it, because it has been such a dominant force in the kind of second reincarnation of neoliberalism since ~80s in the US in particular. This apathy is the perfect wet blanket to prevent systemic change and perpetuate the status quo – no suppression of dissent is needed if there is no imagination or expectation of a better society. A lot of powerful interests are spending a lot of effort trying to convince us that any meaningful change would make things even worse, not better.
In my opinion, the best way to break these cycles is to study the past, other countries and many times smaller local communities. There are countless examples of well functioning systems if you pay attention. And new ones being established all the time. I’ve seen local markets completely flourish in just a decade, because of good policy. Once you see these things, and know in your heart it’s possible, there’s no going back.
I’m intentionally a bit vague here, because what’s meaningful to one person can be inconsequential to another. Which is why it’s so important to discover these things on your own. That’s the way to turn complacency into hope, and hope into organized action.
"Local communities" existed for millennia and didn't manage to reduce the child mortality rate and extreme poverty rate to effectively zero. I know neoliberalism is a dirty word, and there are plenty of problems with the modern world, but I would rather live in a neoliberal global society than the "local" world of 200 years ago.
This is the right conclusion, and I love sharing that video for that reason.
As of 2025 everyone globally has everything they need to make the world a great place for everyone. Instead, people continue to take the lowest energy route for their personal actions, which means they do not even think about the externalities of that purchase from Amazon, the Latte from Starbucks, continuing living in (insert your broken system here), working for some billionaire etc...They just shrug and think "its out of my control, besides I don't have any impact and why should I suffer unnecessarily"
There are millions of examples of individual people who had no education, being actively oppressed and violently attacked changing their situation by either moving or overthrowing their oppressors. Harriet Tubman comes to mind.
It's never been easier to do that, but people would rather not.
The entire "illegal immigrant" concept proves it, people literally spending their entire life savings ($5000) to pay coyotes to smuggle them in horrific conditions so they can be slaves picking strawberries. I know a Houston restaurant owner who did that trek twice from Guatemala, getting deported the first time and he just saved up and did it again. While speaking no english. Tell me again about how it's not possible to do something. Meanwhile the citizens can't be bothered to learn about their own history or you know, do anything.
I've tried to start multiple non-heirarchical anarchist cooperative organizations and the number one challenge is finding people who will put the group ahead of the individual. It just doesn't happen. There are no organizations where that's true. No church, no government, no state, no charity, nothing, nowhere actually meets the test of holistic globally aligned "good."
I read the Medicins Sans Frotiers book long ago, even they were terrible and continue to fight internally [1]. Unions now make most of their money from capital investments [2], which is directly in opposition to their anticapitalist philosophical roots. All of this is because the members don't care and don't have any desire to have less, they all want more forever.
At this point in history, everyone has access to the information they need to make globally holistic decisions. It's not possible to claim ignorance, ignorance is strictly a choice and ultimately a existential personal limitation.
There are no organizations that exist for the benefit of society and they cannot exist because humans fundamentally lack the cognitive ability to think beyond Dunbar's number but their actions have global consequences.
Self elimination is the only possible arc for humanity.
The job of a union in the non-sectoral-bargaining structure of the US is to shove more money into the pockets of their members, period, end of story, and that is exactly what their members pay them to do
> Self elimination is the only possible arc for humanity.
Hey man, at least add a spoiler alert.
We eradicated smallpox and recovered the ozone layer through global coordination, not even a century after murdering each other by the tens of millions in two world wars. We're capable of both.
> recovered the ozone layer through global coordination
The ozone layer won't be "recovered" for about a century, assuming everyone plays nicely[1]. It is still diminished from CFCs, and we're still being bombarded with more UV than previously.
> I've tried to start multiple non-heirarchical anarchist cooperative organizations and the number one challenge is finding people who will put the group ahead of the individual. It just doesn't happen.
I could have saved you the trouble if you'd just asked me!
Over 20,000 communes have been started in the US. None have survived. What baffles me is why people keep believing they can work.
Free markets work because it harnesses the inherent selfishness of everybody, rather than trying to override selfishness.
> it harnesses the inherent selfishness of everybody
the biggest lie we're constantly being told: https://www.econlib.org/library/Enc/bios/Ostrom.html. this really annoys me, we're not inherently selfish. at least not most people. free markets don't work in any rate. how do you even come to this conclusion?
Spot on, it's so sad to see this kind of thinking so ingrained in people, when literally 3 seconds of critical thinking would lead to the opposite conclusion. Are kids just as selfish as adults, at every age? Does their selfishness change depending on what they're taught and how selfish their role models are? Is selfishness among adults at the exact same level across decades, eras, cultures, nations?
If the answer to any of these questions is "no" (and anyone capable of using HN should realistically be answering them as such), then it's abundantly clear you can't just hold up your hands and say "oh well, everybody is inherently selfish, 'ts just the way it is". Even the idea of everyone being somewhat selfish isn't really true when you consider the countless cases of people literally sacrificing their own lives through history - and not for some kind of post-mortem glory. One can argue semantics over that still being "selfish" as it's done to further a goal of themselves but that's just wasting everyone's time.
> when literally 3 seconds of critical thinking would lead to the opposite conclusion
Understanding why free markets work takes a lot longer than 3 seconds, as it is counter-intuitive.
> the countless cases of people literally sacrificing their own lives through history
Decades ago, the Scientific American ran an article about this, where a study showed that people self-sacrificing can mathematically be shown to ensure the survival of their genes. For an obvious case, parents sacrificing themselves for their children's sake. This makes it selfish. People are less willing to sacrifice themselves the genetically further away the people benefiting from such sacrifice.
Ostrom: "the ones that worked did have a kind of property rights system"
LOL. And the fact that she gets a Nobel Prize for this shows how unworkable it is in general.
> we're not inherently selfish
You're selfish, so am I, so is everyone you know.
> free markets don't work in any rate. how do you even come to this conclusion?
The success of free markets in the US, Germany, Japan, Hong Kong, Taiwan, Vietnam, China, Singapore, etc.
Worker cooperatives: A worker cooperative is not a commune. In any case, there are what, a hundred examples listed? What that shows is they are so rare that a global list can be compiled on Wikipedia. Set that against the scores of millions of businesses.
> You're selfish, so am I, so is everyone you know.
you can ignore the evidence all you want. Doesn't make it correct. Google it for yourself then.
> The success of free markets in the US, Germany, Japan, Hong Kong, Taiwan, Vietnam, China, Singapore, etc.
how have they succeeded? enshittification and wealth accumulation is success? what's the metric here? decreased health? decreased lifespan? increased addiction? increased unhappiness?
> Worker cooperatives: A worker cooperative is not a commune.
Let me quote the discussion, which you obviously didn't even understand:
>> I've tried to start multiple non-heirarchical anarchist cooperative organizations and the number one challenge is finding people who will put the group ahead of the individual. It just doesn't happen.
> I could have saved you the trouble if you'd just asked me!
> Over 20,000 communes have been started in the US. None have survived. What baffles me is why people keep believing they can work.
they talked about cooperatives, you answered with communes. I gave proof that cooperatives work.
That's not true. I just checked on it, and they used to be subsidized, these days not so much.
A lot of them are hybrid models with some capitalism, mixed with the socialism. So I guess it sort of confirms your opinion that these things don't work when pure?
But they do seem to have found a successful hybrid model.
The problem is that capitalism mathematically ensures inequality which subverts the concept of survival because it creates extreme imbalances in agency.
What results is that capitalism must always use as reference a forever unchanged “state of nature” mythology which never existed.
Capitalists view themselves as a different species than modern anatomical humans, more enlightened etc… but I have seen firsthand that millionaires billionaires and even “middle class” people have less consciousness than those who have very little capital.
Capital enables alienation by letting the capitalist offload “life” to people who do it for them, leaving them nothing but Vice. It always corrupts
>It's never been easier to do that, but people would rather not.
Never been harder with ubiquitous surveillance.
>As of 2025 everyone globally has everything they need to make the world a great place for everyone.
Disagree. Even if theres enough food being produced, its not produced evenly, and the extra labor and resources to distribute it evenly would screw a lot of this up. Then theres the idea that a bureaucracy large enough to distribute it worldwide would be efficient.
>I've tried to start multiple non-heirarchical anarchist cooperative organizations and the number one challenge is finding people who will put the group ahead of the individual.
The group is made of individuals. Ultimately eventually they will need some reward for their participation. Whenever I have involved myself in these groups theres ultimately some unsavoury character who has positioned himself as leader and siphon off the glory for themselves. Or in one case, it was just an avenue for the "leader" to gain access to vulnerable women. These groups dont work because they get hijacked, not because the people doing the work dont want to work.
>Unions now make most of their money from capital investments [2], which is directly in opposition to their anticapitalist philosophical roots.
Unions are about protecting workers. They dont have to be socialist paragons as long as they meet that directive.
>At this point in history, everyone has access to the information they need to make globally holistic decisions.
Lmao, where to start with that doozy. Local knowledge still trumps the disinfo hose.
>lack the cognitive ability to think beyond Dunbar's number
People just dont trust beyond that number, and with good reason.
>Self elimination is the only possible arc for humanity.
Lmao, there's no reason why we cant keep going like this. An engine built on brutal exploitation. Predicting humanities doom seems greatly premature.
Instead of citing an AI, why don't you cite an actual reputable source? Those facts it ingested and regurgitated no doubt came from somewhere, and you're clearly attempting to use the facts to prove a point. An authoritative source is more helpful than attributing it to [insert ai bot here].
the data is so fucking obvious (everyone knows there are massive OD and suicidality in this moment), of course people are going to be pedantic about the source and not debate the merits of the argument.
however you want to spin it, the source is always important. again, especially if it tends to fabricate things. don't be lazy and research a proper, first order source and not a parroted parody of a source.
you're intellectually lazy, so why would anyone want to discuss with you?
While Sysco is a monopoly, they apparently don't make anyone angry enough to get rid of them. My guess is that they are pretty even-handed across an entire industry and their customers are knowledgeable enough to not screw up a good thing when they see it.
No I think tech just gets obsessive media coverage these days (both from MSM and from influencers.) I know lots of event companies that hate Sysco, it just doesn't get as many clicks as a tech company does.
> Pre-Internet you would see the same dynamics, but usually on a much smaller regional scale.
At least in the US we had national monopolies that took serious regulation to solve. That regulation, strangely enough, is still in place. Perhaps early on there's fear to regulate a nascent industry and by the time regulators realize the problem they're too afraid of the power wielded by the monopolists.
In any case, it's never too late to break up these monopolies. The problem is that the Robber Barons are too far in the past to serve as a lesson for current generations. And some folks might remember AT&T but not understand why it was such a big deal.
Weird timing to see this, as I have come to the same conclusion and was writing a blog post on it. I think we need to start figuring out how to modify our economic system to prevent this, because as you pointed out the tech world is much more “winner takes all” than the physical world, and watching industries consolidate globally under a handful of players is extremely concerning.
All mature markets eventually end up with 3-5 competitors dominating the market. I don't really see this as an issue.
I also disagree that it's a net negative. Technology adds convenience to these markets and as long as the government isn't price-fixing through strict regulations, we also end up with better prices.
We've seen some of the prices increase after the government decided to regulate the hotel markets. They forced many people to stop renting out their places through sites like Airbnb and now the hotels are free to increase prices accordingly.
If it weren't for Uber and Lyft, the Taxi cab unions would have gladly monopolized the industry charging workers $1,000,000+ for a medallion and not keeping up with technology (Taxis were still hailed in person or ordered on the phone before the tech companies decided to compete).
Market consolidation usually leads to higher prices, and it can certainly happen with 3 big players dominating a market. AirBnb is an interesting example. My gut feeling is that the service fees (and cleaning fees, bizarrely) are climbing as they gain market share. Unfortunately I'm finding it extremely difficult to get information about what their service fees were in (say) 2015. Would be interested if anyone else knows a good way to find out.
mature markets end up 3-5 competitors because further mergers end up blocked. capitalism would otherwise allow them to contract to a single player. So I'm sure that's one government control that you'd agree is worthwhile.
And even that blocking doesn't matter much anymore, because the owners of all those 3-5 companies are starting to be the same entities. Because the same people/organizations own all of the companies, they no longer care which one is currently winning and so won't push them to compete against each other as much as they would if the ownership didn't have any overlap. They'll push for policies that allow those players to exist together without stepping on each others toes.
Not at all, you see this pattern in markets that regulators ignore too. It's a human limit. You end up with 3-5 competitors because the incremental value of yet another competitor becomes nearly zero very fast. People have very strict limits on how much information about a specific market they care to remember. To even have 2-3 competitors they have to put a ton of work into differentiation and marketing, otherwise people forget they exist.
Sometimes you do see more, and it's indeed because regulators are stopping mergers. The airline market is like that. But it's a mistake and the regulators should back off. It's not helping people to have a gazillion undifferentiated brands, at some point it's just wasteful duplication.
The idea that every market would contract to a single player if not for the benign wisdom of the regulators is a trope. Regulators are tiny compared to the number of markets that exist, but competitive markets aren't the exception, they're the norm. You see it even in very sticky locked-in markets where regulators deliberately decided not to intervene, like operating systems and browsers (Justice Dept effort to break up MS was cancelled).
I think you have OP's comment the other way around. They were saying that markets will naturally tend to fewer than 3-5 competitors, and only prevented from getting there by antitrust.
I think I addressed both ways around: markets naturally tend to settle on 3-5 competitors, unless blocked by regulations.
There are very few markets that are both natural monopolies and stay that way for long periods of time. Outside of things that tend to be owned by governments anyway, like road networks, I'm having a hard time thinking of any.
You're right, I apologise for not reading your post carefully enough.
Whilst pure monopolies are rare, my impression is that surprisingly many markets consolidate to an oligopoly, and that this reduces competition and is generally pretty bad for the consumer.
Tech has also reached into EVERY aspect/detail of our lives 24/7 to try and extract value from it.
Tech originally preached that it's going to improve/simplify/enrich our lives. Instead tech is farming us like we have never been farmed before while giving us none of the original promise/deal. There is no peace. There is no escape. The improvements in our life are normally marginal and short term. There is no just existing, just constant, continuous farming of you for whatever value can be extracted. And because of how tech scales any extraction is never too small to not be worth going after. At least in the Matrix you weren’t expected to curate your own enslavement and smile and post about it daily.
Yup. I would 100% support aggressive localism here, given that the actual service is very easy to replicate. I'd absolutely support an absurdly high tax on any "out-of-town" food delivery service in order to -- maybe "artificially" -- prop up a local one. There is now NO good reason anyone in California deserves a cent for e.g. a local Florida driver delivering local Florida food to a local Florida customer.
>This is essentially the story of tech companies across nearly every industry where they have come to dominate.
It is the only possible result of consumptive transactional organizations.
Conquest in all forms is accretion and consumption based, until the organization gets to large to sustain a consistent direction, then it collapses and the people get pulled into many smaller companies.
Those companies get accreted into a new superset monopolist/duoploist etc... and the bubble grows again and then explodes.
Wash rinse repeat forever at different abstraction levels.
I’m realizing more and more that it’s rarely technological advances that make any particular company successful and impactful. It’s more often the business acumen.
Were “nerds” with coding skills really ever the best ones to be starting companies? How many successful ones were founded without leadership being handed over to “suits” pretty early on?
You need nerds to build something at a baseline competency that you can sell it, then you need to be the greasiest salesman ever to sell it harder once you've gotten a foothold.
People genuinely do not care about product quality, doubly so in the world of software (see: Crowdstrike is still in business).
It would be interesting to see the success rates of startups based on how early on leadership includes MBAs. Or based on how early on they have people with corporate experience at the top.
Does baseline competency stop being the differentiator after seed? Series A? B?
Surely we're understanding that VCs are playing a stronger game in the software industry.
Cost of goods is lower, overhead is lower in software than in all the items you mentioned and VCs starve out other players by reducing their costs, capturing the market and increasing cost once captured.
Have an app is doing a lot of work there. Uber eats at least is fairly sophisticated back and front end and certainly not a weekend project or something say Domino's Pizza can outsource to a team to get it to that quality.
The problem with this line of thought is that everyone just uses it to hate on people they already hated on. You go after rich tech monopolies, progressives generally go after big business, conservatives use it to go after the biggest business of all, the government.
We all just need to focus on monopoly in all its forms, instead of letting the politicians continue to separate us using division without difference.
Capitalism does facilitate monopolies or industries with razor thin margins like airlines. However, the space of competition is a revolving door with constant opportunity to create something better (that people want) than the established players or to enter a new arena entirely. Ultimately, since consumers are the choosers, it works in their favor. It was the consumers that wanted these companies to exist, and the profits are a proof of that.
However, sometimes there are unpriced externalities like the competitive advantage of removing your own manufacturing waste by dumping it into a stream. That is where governance (whether self or the state) comes in.
> Pre-Internet you would see the same dynamics, but usually on a much smaller regional scale
There's been plenty of national and global monopolies (I mean, that's literally why we had Antitrust laws made in the 1890's) as well as industries with only a couple players in a market.
In fact, if you name any industry, it's probably led by just 3-5 corporations. Mobile service? Verizon, T-Mobile, AT&T. Television news? Disney, Paramount, Comcast, Fox, Warner Bros. Liquor? AB InBev, Diageo, Pernod, Suntory, Bacardi. Wine? E&J Gallo, The Wine Group, Constellation. Beer? Ab InBev, Heineken, Snow Breweries. Cars? Toyota, Volkswagen, Hyundai, GM, Ford, Stellantis. Airlines? Delta, American, United, Southwest, Lufthansa. Oil and gas? Aramco, Exxon, Chevron, PetroChina, Shell. Music? Universal, Sony, Warner. Coke, Pepsi, Keurig.
This is what capitalism does. By definition it grows as large as it possibly can, shutting out competitors.
this is essentially the story of capitalism as it always results in monopoly concentration and the development of industry cartels. before tech it was oil, before oil it was rubber and tobbaco.
Modern capitalist liberal democracies have theoretically strong frameworks and powers for regulating and dismantling cartels though. The real story is that politicians and bureaucrats in government become corrupted by them and fail to act for the good of the people.
And that is the story of humanity, not any particular classification of society and governance.
And why is a large monopoly a net negative? I read his book and he says that monopolies are 10x better products, and if monopolies are 10x better then why are they bad? Are you arguing that it would be better to keep using 10x worse products, for the sake of there not being any monopolies?
Monopolies are anti-competitive. Without competition there is no incentive for innovation, lowering prices, not price-gouging etc. Is a 10x better product really 10x better if it is also 10x more expensive and there is no alternative?
Depends a lot on what the monopoly in question is.
1. How much room for innovation is there?
2. How hard is it to substitute the good / service provided by the monopoly?
In the case of food delivery apps there isn't much room for service improvement. A monopoly here probably isn't preventing much innovation. How much better can you get at delivering food from a restaurant?
And there is an easy substitute in terms of driving to the restaurant yourself, so if the monopoly tries to jack up prices too much they will steadily lose customers. The prices now are so high that they have already lost me. I use those apps < 5 times a year.
Not innovating, maintaining high prices, and price-gouging are unstable activities for a monopoly, as in it would open up a void for effective competition. The real anti-competitive actions is that it becomes cost effective to do regulatory capture / pay bribes to politicians. A monopoly can pay to play in a way that fledging competitors cannot. Once the industry has been captured then they can do rent seeking behaviors without worrying about competition.
If allowed, an incumbent monopoly will do the minimum innovation or tactical pricing necessary to keep out competitors - even if it means they suffer a temporary loss.
This can effectively create a barrier to entry high enough that no small company has a chance to beat them. Since insolvency before overcoming the barrier is foreseeable, no one even tries, and the monopoly gets to keep high prices (compared to a competitive market if they weren't there).
How many desktop OSes can you choose from walking into BestBuy? And this is decades after MS was convicted of being a monopoly and illegally paying computer manufacturers money to keep competitors off.
> Not innovating, maintaining high prices, and price-gouging are unstable activities for a monopoly
Depends how good their moat is. Or how deep their pockets are, because they can often bribe to keep their competitors out (Intel vs AMD). Or just buy their competitor outright.
How? Do these 5 companies even operate in the same places? Around here we have DoorDash, Uber Eats, and that’s pretty much it. We have SkipTheDishes, which was present before the other two outside urban areas, but I don’t even bother talking about them, most restaurants in the area have switched away from them. The other alternatives just never existed outside highly urban areas or have simply been pushed out by the bigger players. Where are the effects of this highly competitive market, exactly?
Without more context this is silly to say. It isn’t as if we know the natural or correct construction of this market a priori and that 5 is clearly a distortion from that. Consolidation can sound bad in the abstract but in this relatively immature market you could still expect major shifts to get to a steady state. Just a little bit ago people were remarking on VC-subsidized delivery; as that goes away, consolidation is not unreasonable.
Edit: ‘this’ in the original parent comment was along the lines of ‘five out of potential thousands of actors’
Split the world us/china/other and ignore minor players and there are 1/3/1.
In a given are there is competition but the local competition is likely to be pushed out by Uber Eats who could undercut them out of business for a while. Or just have better tech / customer experience due to scale (looking at you Menulog)
Large and dominant companies can be a net good, at least in theory. In practice they become corrupted because of incentives to maximize profit by any means possible, with few who can oppose them.
When well regulated one can have most of the benefits without many of the downsides. Sadly, even the regulators become captured.
We have to distinguish between monopolies that keep their status by being great versus monopolies that have something else going on.
Google (search) is an example of the former. Search is a very expensive business to be in, but most of the costs are in scraping, indexing and software development, not actual query execution. The more users you have, the more you can spend while still keeping margins constant, and the more you spend, the better your engine is, which gives you more users.
This leads to the situation where you only have two competing search engines[1], one of which sucks and only exists because it's propped up by Microsoft. However, this is only true as long as Google keeps their quality up. If Bing suddenly became significantly better than Google, people would gradually start switching.
20th century AT&T is an example of the latter phenomenon. It was a monopoly because of US regulations, which made the barriers to entry insanely high. This meant AT&T could set almost whatever prices they wanted, as consumers didn't have a choice anyway.
[1] Engines like Kagi or DDG don't count, as they still fundamentally rely on Google's or Bing's indexes.
> monopolies that keep their status by being great
What I am asking is what incentive those monopolies have to continue being great. Even if Google did not use Chrome to steer people to Google Search, Google Search is an established habit for most people, and it would have to become significantly worse than any competitor in order for people to consider switching.
You pointing out that a competitor to Google can only exist because Microsoft is pumping huge amounts of money into it, is not the great argument you seem to think it is. If Microsoft does not have a good chance of making money with Bing, what chances does a startup search company have?
By improving the consumer experience. Better optimizations of which couriers go where and by what routes, faster delivery times (and hence warmer food), menus and restaurant directories optimized to show you what you actually want, better delivery time estimation, no need to talk to a human or re-enter your details for each new restaurant, that sort of thing.
At Uber scale, you have people working on improving metrics, and those improvements translate across all the restaurants that exist across the world. "John's Chicken" won't hire their own guys to do A/B testing on which pictures of their food generate more sales.
he didn't produce any proof of that statement and I figure neither can you. so let's assume this as false, shall we?
we see lot's of examples of how monopolies (or similar) tend to do rent extraction. that's why we're talking about enshittification so much. it's because they only care about profit (and on a small time frame as well), not the product, not the customers, nor the planet.
Big business is the engine that drives the economy. Small businesses are the future big businesses. Economies where big business is discouraged don't do very well. Small business doesn't have economy of scale, nor can it raise the capital to do big projects.
> extreme concentration of wealth
Big business does not concentrate wealth. What you're seeing is the creation of wealth. This created wealth then flows out into the rest of the economy, via paying the workers and buying plant&equipment, etc.
They absolutely do. If for no other reason than each of their revenue goes to fewer entities.
> What you're seeing is the creation of wealth. This created wealth then flows out into the rest of the economy, via paying the workers and buying plant&equipment, etc.
This is the flawed reasoning behind "trickle-down economics"[0], which was called "horse and sparrow" in the 19th century. It didn't work in the 19th century when labelled as the latter nor in the 20th when reframed as the former.
Any company which has earnings beyond those of operating costs is a concentration of wealth by definition. Whether that wealth is distributed to shareholders, kept as retained earnings, or otherwise transferred to specific entities is irrelevant.
> Any company which has earnings beyond those of operating costs is a concentration of wealth by definition
Let's say I buy $20 worth of art supplies, and I paint a landscape and sign it with my moniker, "bright". Since "bright" paintings are very rare and go for a million bucks each, I now have created a million bucks of value. Who did I transfer the wealth from? Nobody. I took nuttin from nobody. Yet I have become wealthy.
Let's say I sell it to you for a million bucks. Did I take your wealth? Nope. I traded a million dollar painting for a million bucks. You are exactly as wealthy as you were before.
Now, if you decide to use my painting as compost (sob!), you are dissipating the million dollar value. That's not me concentrating wealth, it's you destroying your wealth.
If you stole the painting from me, then you concentrated wealth. But we're not talking about theft here.
Your art supplies and time didn't create wealth in the economic sense ("the annual produce and labour of the nation" as Smith defines it, <https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book_II...>), but a financial asset, in the form of a (presumably) uniquely identifiable durable store of financial value.
This is contrasted with economic wealth in which some inputs (capital, labour, raw materials (themselves generally considered as capital) are transformed into some immediately useful consumable product (say, food or fuel), a durable good (clothing, furniture), a service ("immediately extinguished" in the terms of some economists, but still having potential lasting positive value), or capital which can itself be used in future economic activities (machining equipment used in the manufacture of widebody aircraft, or the aircraft themselves).
All else equal ("ceteris paribus"), the result of creating a novel but valued painting would be the same as that of inflating any other durable store of value: the relative prices of competing assets would fall proportionate to the price of the artwork. Ordinarily the drop is small and the bucket large such that this isn't noticed, but it is the net effect.
David Ricardo is amongst the first economists to deal with the economics of collectibles and durable assets of which I'm aware, e.g.,
Ricardo’s value theory applies only to those commodities that ‘can be increased in quantity by the exertion of human industry, and on the production of which competition operates without restraint’; it is thus not applicable to ‘rare statues and pictures, scarce books and coins, wines of a peculiar quality [...]’ (Works, I, 12)
From The Anthem Companion to David Ricardo, Edited by John E. King, p. 169.
>> Any company which has earnings beyond those of operating costs is a concentration of wealth by definition.
For context, here is the second sentence related to the above:
Whether that wealth is distributed to shareholders, kept as
retained earnings, or otherwise transferred to specific
entities is irrelevant.
I believe this relevant to the below.
> Let's say I buy $20 worth of art supplies, and I paint a landscape and sign it with my moniker, "bright". Since "bright" paintings are very rare and go for a million bucks each, I now have created a million bucks of value. Who did I transfer the wealth from? Nobody. I took nuttin from nobody. Yet I have become wealthy.
This scenario is not relevant to "big business", but instead describes a sole proprietorship with an assumption of a known fungible value. It also does not account for consumable goods and/or transient services. In any event, by your own definition below:
> Let's say I sell it to you for a million bucks. Did I take your wealth? Nope. I traded a million dollar painting for a million bucks. You are exactly as wealthy as you were before.
Either you have not "become wealthy", as you "traded a million dollar painting for a million bucks" or the effectual value of money exceeds the purchase value of the "million dollar painting". Both cannot be true.
Back to my statement of corporate earnings beyond operational costs being a concentration of wealth. I believe we can agree on the following:
- Any for-profit company has as its purpose the goal of accounts receivable (AR) exceeding accounts payable (AP) over time.
- There are a limited number of recipients regarding profit distribution for any given company.
- Those having no direct or indirect ownership of a given company do not receive profit distributions.
If we agree on the above, then the larger the profits, the larger the distributions. Since the set of people qualifying for profit distributions are less than the set of all people having no investment relation to the company, it follows that said profits are enjoyed by fewer entities than those strictly involved in the AR side of the ledger.
Hence a concentration of wealth into the organization.
> Either you have not "become wealthy", as you "traded a million dollar painting for a million bucks" or the effectual value of money exceeds the purchase value of the "million dollar painting". Both cannot be true.
I became wealthy by creating wealth, not concentrating it. Concentrating it requires it be taken from somewhere else. There is no taking going on, there is creation and exchange.
>> Either you have not "become wealthy", as you "traded a million dollar painting for a million bucks" or the effectual value of money exceeds the purchase value of the "million dollar painting". Both cannot be true.
> I became wealthy by creating wealth, not concentrating it. Concentrating it requires it be taken from somewhere else. There is no taking going on, there is creation and exchange.
The scenario you have described is logically consistent while being representative of a tiny subset of commerce. Revisiting the original use-case:
Let's say I buy $20 worth of art supplies, and I paint a
landscape and sign it with my moniker, "bright". Since
"bright" paintings are very rare and go for a million bucks
each, I now have created a million bucks of value.
Assuming all of the above, this business model does not account for at least the following:
A - Businesses having more than one employee.
B - Asset deprecation, such as when purchasing a new automobile.
C - Consumable goods, such as food, petrol, etc.
D - Services such as commercial/residential rent and physical security.
E - Taxes.
F - Stock dividends and/or performance bonuses.
A and E involve direct wealth transfer from the business to relevant parties.
B is a second order effect only realized when the buyer attempts to sell the asset to a third party.
C and D are direct wealth transfers as the seller retains the remuneration for as long as they desire (excluding applicable cases identified above) and the buyer eventually does not have a physical equivalent. Note that this often remains a valuable exchange for both parties.
Seeing how many Gen Z people use food delivery services on a weekly or even daily basis was mind blowing to me. I’ve had numerous conversations where I’ve had to bite my tongue when younger colleagues complained about finances after also explaining that they DoorDash dinner nearly every night. It’s bizarre.
Not all Gen Z, of course. Most of the younger people I’ve worked with have been generally smart about finances. It’s a subset who fall into the normalization of luxury services as a standard cost.
I was born in the 80s in the UK. When I was a teenager, my family had a takeaway meal delivered every Wednesday night. My dad would ring up the restaurant, tell them the order and our address, and pay the driver when they arrived. It cost us exactly what it would cost someone going to the restaurant, plus a small 5-10% tip to the delivery driver. Most places had a delivery fee only if you live outside a certain radius or your order was under £20 or something. This was very typical for families at the time, and restaurants would directly hire delivery drivers.
The problem here is not the concept of food delivery, which has been widespread for decades and used to be very cheap. It was not always a luxury service. The problem is that tech companies have become an established middle-man platform and are driving up the prices for a small amount of added convenience. And it's often a net-negative in my experience, having now sworn off Just Eat after some horrendous experiences and negligible customer service.
I really don't think that frequency was 'normal' in the UK at all. I'm a similar age and we had a takeaway maybe once a month (usually fish and chips, occasionally a curry or chinese). Meals out were a bit rarer, usually a pub but occasionally McDonalds. For the generation above mine, my grandparents on both side basically never ate takeaways unless it was fish and chips on holiday - culturally it just wasn't a thing. I just asked my wife who was much wealthier growing up than I was and she similarly reckoned she didn't eat out much / have takeaways often.
Thanks for relating your experience. Wow is it hard to get any concrete figures on questions like "how many takeaways did an average household get per week in 2004". Also pretty tricky to chase down the references from the article you linked.
I've no doubt that my own childhood was atypical in many respects. Relatively well off, only two kids, dad was a first generation immigrant so perhaps had fewer financial and cultural constraints. When I was a teenager at home from 2000-2006 the data suggests that spending on takeaways and eating out had been surging up to that point.
Either way I will always fondly remember having a donner kebab on a Wednesday evening, sat in the kitchen watching Star Trek Enterprise on the telly on its spinning turntable.
I agree with you about grandparents though. I think the closest mine would ever have gotten was a microwave meal.
Even the subtitle of this article basically enforces that fact:
> Why is my $8 burger $23 after fees - An average reddit user
As you say, it's a private taxi for your burrito. When you factor in the labor costs, gas/car maint costs, and the amortized cost of providing the service, it's hard to see why anyone would think $15 for an on-demand delivery in a major urban area is abnormal.
Most pizza restaurants are built around the delivery cost-structure. They locate off main streets, they have a small front-of-house relative to kitchen size, and they have relatively low ingredients costs. They save money on both real estate and taxes, and use those savings to pay for drivers who deliver multiple orders per trip.
Other restaurants just aren’t optimized for the delivery business, so it’s more expensive per serving for the customer (no matter who is doing the delivery).
I agree with your sentiment and was also astonished about spending on delivery.
However, I don’t think food delivery is the reason they’re complaining about finances - it’s more likely it’s that every generation above them has been able to buy housing and they cannot.
No amount of penny pinching on everyday spending is going to close a doubling [1] in the cost of buying a house for Gen Z vs _Millennials_ (never mind boomers!). It’s incredibly unfair and Gen Z are absolutely right to complain and be angry about it.
My coworkers stepson is the same, door dash every day then complains he has no money. Even after having finance explained to him he still doesn't get it.
I think this partly explains gen z's constant complaint of not being able to afford a house. Most people didn't used to pay for TV (there's this invisible signal going over the air!) and now everyone pays for Netflix. People did pay for premade food (TV dinners, canned food, etc) but now they're paying for a restaurant-level expense one or multiple times a day. They're purchasing equipment in online games, subscribing to a million online services, constantly buying junk from peddlers like Temu, Amazon, etc. $100 home internet, $70 mobile phone service, $1000 phones? They're throwing their money away. And while they technically could stop, I'd argue that we have all been programmed to do this, to the point most people probably are unable to stop. Consumerism is addictive. I'll bet in the future your paycheck comes pre-deducted with all your subscriptions "to help you afford food and housing", and it'll be provided by Stripe.
It didn't used to be. I delivered pizza in the early 2000s, and the fee was $1 and tip, which was usually $2-3. It was pretty normal people ordering the stuff.
And the funny thing is I made about $20 an hour (unadjusted for inflation, ~4 deliveries per hour + $5 an hour). Today the drivers still around that amount, the restaurants pay more and the companies operating are often operating at a loss.
Something very strange happened in the last 20 years.
What happened is the gig economy inserted a middleman (DoorDash, Uber Eats, etc.) between the restaurant and customer. These platforms take a 20–30% cut, charge customer fees, and still often lose money.
Meanwhile, drivers—now independent contractors—get no hourly wage, no benefits, and absorb all costs (gas, car, downtime). Tech didn’t increase efficiency for workers—it added a VC-funded layer that extracts value.
So despite more demand and better tools, drivers earn the same (or less) in nominal terms, and much less after inflation.
They removed friction by centralizing all restaurants so you can choose from one place, standardizing the experience no matter the food source, making selection simple and payment/refund easy.
The human brain is wired to go the way of the least resistance short term, no matter the cost long term, so customers pay a lot for that.
I have many pizza places that tell me they still deliver themselves for cheaper: almost nobody takes the option, they use the giant company app.
Something strange happened to someone somewhere but it hasn't happened to me.
I ordered Indian food from one of my favorite local establishments. I was home alone so I wanted it delivered. I called the restaurant and placed my order. The owner showed up 20 minutes later in his Mercedes to drop off my delivery.
Some restaurant owners know that they can buy themselves nice things and still provide excellent customer service if they don't give all their profits to a delivery service.
> Something very strange happened in the last 20 years.
Tech companies discovered that the most profitable position to be in was global middleman, at a scale previously impossible before everything was connected by the internet. They undercut a given market until all the alternatives become financially non-viable and then start hoovering up all the margins from both sides (producer and consumer) of the deal.
'nonperishable food' or 'properly packed short travel' (i.e. dairy/frozen) IMO is a fairer niche of 'could be non-luxury with better societal outcomes', except for the 'as close to JIT as possible'. There's ways to optimize the process to where something on the scale of 10-20 homes could get their main groceries delivered two or 3 times a week and the overall cost would be lower than all of them doing so. Yeah you'd need a reefer van or an otherwise replenishable source of cold for dairy/frozen but at that scale the cost of such makes a lot more sense. Biggest problem is getting the right buy-in and mindset from consumers.
I totally agree in theory, in the same way I agree that Amazon delivering everything from a nearby warehouse is far more optimal than having thousands of small bookshops or random shops in prime locations.
I think that's the main vision behind Travis Kalanick's CloudKitchens since he left Uber. You could order food prep for your week from a choice of menus, and the food would be prepared in an industrial kitchen for you and thousands of other people around you. It's basically restaurant-quality food that you can eat at home and isn't frozen.
Unfortunately for the meal prep market, I believe the break-even point for scale is much more difficult to achieve. Food is like hardware but with a much shorter end-of-life. You would need consistency in ordering to avoid excess spoilage and to operate at scale within small geographical pockets to make the delivery worthwhile. I really believe this could work with the right demographics and in the right geography, it's just much harder than simply delivering takeaways.
Difference is you can stock large quantity of frozen foods any time it is convenient to shop. As in, frozen food delivery is not all that useful.
When you work from home and cant cook, delivery can happen right now. Or if you are having a small gathering with friends, delivery makes your life easier exactly when you need it.
I thought the headline was implying something else. When I read the article, I thought, “Is it a monopoly to worry about if you can just do it yourself?” Feels like complaining there is a monopoly on services to pour you a glass of water from the tap.
I make good IT money with few expenses and thus have a lot of disposable income but I feel that restaurants are really terrible value for money and thus rarely go to them. Add the extra cost of getting restaurant food delivered right to your house and it just becomes a stupid waste of money.
Also if it's really an issue for restaurants they can do delivery the way pizza/Chinese restaurants used to do without having to deal with any third parties.
Of all the things to worry about this is probably the least important.
It wasn’t priced in for the first 5-10 years. There’s no way I would use an app like that (I even work for one) these days now that the VC subsidy is gone and the service costs 5x as much as a few years ago
The title scared me a bit before I opened the article and realized it was talking about restaurant->consumer food delivery services. While that isn't great, I was initially thinking was that the companies that facilitate the food delivery supply chains around the world were massively consolidated (I sure hope they aren't)
I'm pretty sure the food supply sources are massively consolidated. I don't know about the delivery part or why that would matter more than the actual food production.
A quick search will lead to quotes like "Four companies now control more than half of the market in chicken processing (Tyson, JBS, Perdue, and Sanderson), close to 70 percent in pork (Smithfield, JBS, Tyson, and Hormel), and nearly three quarters in beef (JBS, Tyson, Cargill, and National Beef)"
I've worked in the industry for over a decade and food distributors can squeeze the manufacturers more than the other way around. That's a very silly statement if you read it with any knowledge of the space.
I certainly don't know anything about the space, but by "matters more", I was thinking about caring more about what I am eating as opposed to how it was distributed. I suppose both are important, though.
I built one of the trade promotion management (TPM) tools used in that space and had to deal with these companies daily for the last decade.
There are absolutely a bunch of acquisitions/ consolidation in that food distribution space, but there are still hundreds of different distributors just in the US. However, most volume does flow through the largest distributors.
For example, I had to build a specific feature to merge distributors after an acquisition happens in the industry, to make the product work properly because that's such a common occurrence. Had the same type of feature for manufacturers (my customers) also, because they kept buying each other.
The food service industry certainly has some major global players too. Names like Bidfood, Sysco, PFG, etc. In some cases, these same companies cater/supply everything from prison, school, and hospital kitchens through to fancy airline lounges and high-end restaurants!
Wow - I didn't realise bidfood.co.nz was a US chain bidfood.com (Bidcorp).
Food markets keep closing down.
The consolidation of restaurant suppliers really affects the quality of taste a restaurant can get. My ex was a cook and the worse restaurants wouldn't even make their own sauces like Hollandaise - she would tell me what brand it was (often a restaurant supplier brand). It is noticeable when the chef has hand-selected their supplies e.g. tomatoes that have flavour.
The root cause is that consumers tend to optimise for cost.
Quality is harder to give a number to.
We're not completely screwed yet - with time/effort (and moderate means) you can find some amazing places at normal prices.
And there are people willing-enough to spend time/effort plus wealthy-enough but that market is much smaller (more exclusive). And unfortunately there are a lot of expensive places that don't optimise for food quality (because people desire other things for their money e.g. obsequiousness, rent-a-vibe cuisine, gastroflex, mealfluencing, yadayada). Aside: Roget's gets spanked by AI when looking for modern words.
It's lowest bidder, shit tier quality food that is usually a different SKU than they sell retail / food service (because people wouldn't buy it for themselves).
The people making the decision to buy this slop aren't the ones who have to eat it.
restaurant food distribution is event more consolidated. For example in the Midwest there is really only 1-2 companies you can get your seafood from. It has its pros and cons. Source: I work in restaurants and I also supply these distributors
The food industry is due for a good old opensource disruption, where each restaurant can setup their private menu hub (like you would an instagram account), add their payment processing details, and start delivering their own orders. It's a win-win for the restaurant and their recurring customers.
Worked years ago at a restaurant that had its own website and app ordering...
Ubereats and the like still dominated the orders even with the 15% upcharge and even after notifying repeat customers that they can save money ordering direct
The convenience of having one centralized app with one account that can summon any food from any restaurant in a 10 mile area is just way too strong.
Plus the fact that you only have to give your credit card details to one large company that (hopefully) has some security professionals working for it, rather than dozens of smaller ones and hoping that none of them lose it/get compromised.
Consider supporting lower friction payment types like apple pay/google pay or any other which the customer is likely to be already using and don't need to enter their billing details to yet another random website. Maybe you already do.
The target audience for consolidated food delivery apps isn’t the person who wants to manage the fine details of ordering from 10-20 different local restaurants.
The majority of people using these apps just want to scroll some restaurants and order something quickly. Saving 10% by going through extra steps, installing extra apps, going to a company’s website, and doing custom orders isn’t what most of their repeat customers want to do.
I'm the one who don't bother ordering directly to get better value, but I started noticing less and less restaurants (that I order from) having this option anymore.
They probably saw too little people using it and stopped accepting, sadly.
Having dedicated delivery drivers stops making sense after a while
One benefit of these apps is companies which would never have had a driver now can be ordered, but the cost is all the businesses who did no longer do.
And it’s going to be a hard sell for a small business owner to pay for not employees that are in low demand by the consumer vs the zero fixed cost apps that manage that for you.
Stuff like this already exists (AFAIK not open source but cheap enough that restaurants would prefer to use it if they could). The problem is modifying user behaviour: people used to go directly to the restaurant to order food but are now very used to opening the food delivery app, browsing it, and ordering.
You could have the slickest ordering experience in the world and it won’t help you if no one sees it.s
These certainly exist. My local favourite Thai restaurant has its own ordering website and has its own staff deliver the order, with no markup over the in-restaurant menu prices.
The company that operates their ordering platform is mobihq.com (I have no affiliation with them)
There are middle man services for certain types of food in certain areas.
For example Slice is a popular one for pizza. I know a business owner who uses it.
They have an app and optionally an online menu on your custom domain to take online orders and physical hardware for taking orders in your store. Think POS system, register, terminal, printers, etc..
For a business owner that covers you for accepting online and offline orders, and you can deliver direct to your customers.
95% of his online delivery orders go through this system because DoorDash charges him (the business owner) 30% for each order so he raised his prices there to partially offset that. Slice on the other hand is 5% cheaper than his baseline price for online orders for customers so it's a no brainer most use that. With that said, way more people call in or come in person than using the app. Probably a 90% / 10% split.
It's crazy to think, but I think we're quickly reaching an inflection point where the generation of on demand multi-sided marketplaces that gained steam in the 2010s is ready to be disrupted itself.
Similar to how JustEats works. Or at least used to. The restaurants have their own driver, and create their own menu. Though I think the cut from JustEats is still quite high.
Great question! And a great example of why the central question in any antitrust issue is defining the market.
Define it narrowly enough, and Firm A buying Firm B might create a monopoly - the regulator cannot approve that.
Define it broadly, and Firm A buying Firm B takes the market from 21 firms to 20 - the regulator is unlikely to stand in the way.
(In practice the market definition question in the US will often happen in front of a judge and the two sides are the merging parties vs. the regulator (FTC or DOJ).)
In this case, is the relevant market “restaurant delivery service via an app” ?
In that case five firms is (likely) moderately concentrated at last. (If you have the market shares of the five firms, you can compute an index called the HHI to get a rough sense of how much more concentrated the market will be before and after a merger.)
However… “app based food delivery” doesn’t seem like a credible market to me. The firms are unlikely to have pricing power either over restaurants or customers.
Candidate competing markets:
- going to the restaurant directly
- making food at home
- delivery provided by the restaurant
Any one of the five firms currently in the market who wanted to buy another would argue to include all three as the “relevant market” in which case their share (both before and after) is tiny.
The regulator will argue for a narrower definition.
When you see commentary on this website about “X is a monopolist” or strong claims like that (which are made frequently!), almost never is there any appeal to a market definition!
Fortunately judges get better input than HN commentators.
But there are only 1 or 2 companies in any particular market. I'm in the US, where DoorDash and Uber Eats dominate. I've never even heard of the other 3 (Meituan, Prosus, Delivery Hero) which dominate in other regions.
This post doesn't appear to present any evidence that five companies control any significant share of the food delivery market. It looks at transaction volume of major deliverers, comparing them to each other.
But it's not at all clear that major deliverers are even a majority of the delivery market. There are no pizza chains on the list. There are certainly no individual restaurants on the list.
> Why is my $8 burger $23 after fees - An average reddit user
Delivery in China (through Alipay, which may or may not be backed by Meituan) is generally cheaper after fees than it would be if you just went and bought the food in person. This might explain why Meituan has so much more transaction value than Doordash and Uber Eats. But it's not something I'd imagine drives a lot of user complaints.
Isn't it funny? Lina Khan and the US government in general blocked all kinds of tech acquisition and merger to the point that companies got creative and as a result many Windsurf employees got screwed. On the other hand, it's totally normal that a handful companies control our food supply chain. And it's totally normal for the federal government to spend $2.5B to revamp a 4/5-story HQ. In contrast, China built Hangzhou Bay Bridge of 36 kilometers for less than $2B. The U.S is starting to feel more and more like the late Western Roman Empire — tangled in the competing interests of entrenched factions, with real reform no longer possible
> Lina Khan and the US government in general blocked all kinds of tech acquisition and merger to the point that companies got creative and as a result many Windsurf employees got screwed. On the other hand, it's totally normal that a handful companies control our food supply chain.
Lina Khan's FTC also successfully sued to block the Kroger-Albertsons merger...
I thought Harmony was a banned word in China. It's what the government called its own totalitarianism, then it's what the people called the government's totalitarianism, then the government banned it because they don't want people to talk about the totalitarianism.
I see these types of stats often, x number of companies now control over x% of x. On the face of it, what's the issue?
Food delivery starts out as this awesome new tech that allows delivery and its prices are cheap for early adoption, lots of small players come to the market to try and ride the hype. The service grows in popularity and becomes steady state, companies start to look to drive further profit, companies consolidate where possible to avoid shutting down altogether. Global markets impact fuel prices, food costs and sees the delivery services grow further in price for all those across the supply chain.
How we have a number of steady state food delivery companies that have the capital, and/or subsidy capacity to run across different markets globally.
Also fun fact, Deliveroo doesn't operate in Australia and had to close due to high costs. Australian Government has been looking to increase rights of gig-economy workers, a cost that smaller player wouldn't be able to handle.
Meanwhile I have seen a lot of local restaurants advertising how ordering through their own delivery/pickup service can be 30% less than Uber Eats or DoorDash on their takeout boxes (and consequently in your uber/doordash order). It’s interesting that some of the POS companies are getting into the market: https://www.toasttab.com/local
There’s huge room for disruption in this model when a $12 chipotle order costs the consumer $30 after higher menu prices + delivery fees + tip.
When I worked at a restaurant that did Ubereats/door dash/GrubHub, we had a 15% upcharge on order through those platforms.
We would tell repeat customers they could use our website/app/phone to order directly and save the 15%. Almost no one converted. Convenience really is king.
Actually when I ordered through it I paid $45 instead of $60 via DoorDash/Uber Eats but the order was delivered by Uber.
The reason why I think this version will work is because it’s the same level of convenience in a centralized mobile app so single payment method, single portal to browse restaurants etc.
(I have no association with this company I just was looking into this last week on the train)
I would care a lot more if this market had even existed as recently as 15 years ago, but most of what this article is making a case for is that the next 5 years in this space are almost completely unpredictable.
And the alternative to restaurant delivery service is really the way we get the other 98% of our food. Anything I can ignore without being at some sort of disadvantage I don’t really get worked up about consolidation.
I wish we had more than 3 cell phone networks, this could all be one and I’ll just drive to the restaurant.
There was a discourse prior to the last election about how cost of living was out of control based on people sharing delivery bills from their "burrito taxi". I do get that this article isn't "about" that discourse, it's about an investment thesis, but my real point is just: there is no reason to believe any part of this market has settled to the point where you could make reliable predictions. Everything is very new.
Yeah I remember Jeff Bezos saying something very much like that at the launch of the kindle phone. Something like “smart phones have only been around for seven years there’s no reason to think the two platforms in the lead now will always be the only two.”
Sometimes a market has already ossified five years in. I guess we’ll see.
I don't understand, are you saying the market was so small that it might as well not have existed? I don't have the impression that it's gotten magnitudes bigger here in Germany, maybe in China it did (what hasn't), in the US...? People just use the web instead of using a phone. AT&T didn't charge a commission.
Realistically in the US before the various online delivery companies figured out how to make it work, most places just didn't do delivery at all. Traditionally pizza places and Chinese food were something you could order delivered. Almost everything else was either drive through or take-out.
What is sort of crazy is that these delivery services didn't even supplant pizza delivery. All the major chain pizza delivery places and most of the local spots all still run their own delivery service long into this app era.
It kind of makes sense. App delivery is notorious for being pretty terrible service quality and having the food end up worse with more time spent between kitchen and you eating it. Pizza delivery on the other hand has been seen as quick with drivers interested in earning their tip, pizza places being conservative with delivery radius to not overextend their drivers, etc. Customers don't like getting an inferior product or service one day.
> App delivery is notorious for being pretty terrible service quality and having the food end up worse with more time spent between kitchen and you eating it. Pizza delivery on the other hand has been seen as quick with drivers interested in earning their tip, pizza places being conservative with delivery radius to not overextend their drivers, etc. Customers don't like getting an inferior product or service one day.
Additionally, at least in my experience it's pretty easy to get to where just paying the delivery fee of a pizza place is cheaper than paying for inflated per-item rates.
>are you saying the market was so small that it might as well not have existed?
They're saying that the space these companies are competing in literally did not exist. It didn't in the US, maybe not 15 years ago, but 20 years ago it was nonexistent.
Waiters on Wheels was founded in 1987 and had cornered the market. But they really only did large orders as far as I'm aware; used more for a corporate lunch than a dinner for two at home.
B2B and B2C are so different from each other they are essentially entirely different market segments, even if they are providing roughly equivalent services.
> As long as food delivery is better than other ways of consuming food, like cooking, takeaways, or dining out, it will be able to keep customers in the network.
Made me laugh out loud. It's strictly the worst option. Only use it if my job wants to pay, or if very sick.
Cold food. Unpredictable delivery times. More expensive than eating out. Usually less nutritious than cooking yourself. And of course expensive as hell.
Less competition would certainly be bad for consumers and drivers. But has that actually happened here?
Doordash and Deliveroo do not operate in the same markets, so their merger would not reduce competition in any given market.
Prosus is a big conglomerate with its fingers in many different industries. But unless it starts buying multiple delivery companies that operate in the same markets, its acquisition of Just Eat also doesn’t appear to be reducing competition.
I think tech companies that are in sectors like this with a great deal of money moving around a few different entities tend to inadvertently operate as de facto cartels in a lot of ways. They tend to mirror business decisions due to poaching eachother for the same talent and consulting with the same agencies who are giving them the same information and findings. The way they set up their companies and operate is all pretty much the same and designed to be similar so as to be useful for investors looking to compare businesses in the sector. ux patterns are the same or similar enough. How they pay their drivers also the same or similar enough. When there is this much similarity of behavior in the sector one has to ask if there would even be a difference for the consumer between having all delivery under 1 company or 10000 companies all operating the same business model? No different than a small town restaurant scene lost to 15 different chain fast food restaurants all operating the same franchise model: customers have diversity of business on paper, but not really since it is all just more or less the same sort of business with marginally different offerings.
I can't think of a single industry or segment, whether consumer or enterprise, where 90%+ of the market isn't controlled by 1-5 companies. That's just how business works.
I still tend to discover a takeaway or restaurant and then figure out how to get them to deliver.
I've never not ordered from somewhere I was keen on based on their choice of delivery service.
If the consolidation results in price hikes and poor service, what's the lock-in? Why can't the takeaways just go rogue and offer independent deliveries?
> Why can't the takeaways just go rogue and offer independent deliveries?
Because many of these delivery 'ad-hoc contractors'[0], sometimes even eating cost [1].
Pre-covid, you were often best off as a business either doing something that was 'known' to be delivery offered (i.e. pizza) or your next best option was to aggressively advertise it and have an extra staffer on hand willing to do the deed.
Then, you've also got the other form of arbitrage (or perhaps a cost thereof), of smaller independent restaurants/chains being unwilling or unable to handle the costs of properly covering drivers [2] and their pay when not driving [3].
Some restaurants started doing delivery during covid and kept it going. However most around here dropped because the volume wasn't worth it to them, on top of the 'streamlined flow' (don't need to give a route, the app the person picking up the 'pick-up' order is handling, does that for them.)
I'm not saying I like it but I get how it got here.
[0] - Remember that in the early days some of these companies would do all sorts of weird things like just have someone order on behalf.
[2] - To be clear, both the startups as well as locals have a checkered history when it comes to proper coverage...
[3] - One can argue that such a person can be made 'useful' during the waiting time, however it becomes a complicated equation between 'what can this person be paid to do' vs 'are they willing to do it for that base'.
> Why can't the takeaways just go rogue and offer independent deliveries?
Because delivery is really expensive. To do it well over a large area you have to have a lot of staff. You also want to keep them all busy, so it works better with a lot of resturants. Margins are thin, lots of risk in an area that is very different from the core activity of the resturant.
Its an almost textbook example of a situation where a specialist company makes sense.
Lots of their infrastructure for handling orders (iPads, software integration into their payment system) was done around Covid, and some have started to integrate in-person orders through the same “single unified system” creating a higher and higher cost to switch delivery systems.
AFAIK there’s no well-supported open source order/delivery management software. The companies that were ready during covid took all the extra, enormous demand for building delivery and order online systems built atop a typically antiquated order management system and have stuck around since
Sometimes i’ll get a cheaper delivery/food cost calling vs ordering online, but now some places are just raising their other prices to match online
In the 80s, I delivered pizza with no software. The place had a normal cash register, for pickups.
People would call, order, and we'd write it down. They it'd go on a wire with a clothes pin, until made. Then it went with the driver.
Each delivery was written down before leaving with it.
This worked for decades for everyone in the industry, flawlessly, perfectly, without issue.
Why is software required? Any given reasons are an unneccessary complication.
And here's the thing. Even in Palo Alto I order from companies still doing it this way.
The above system, paperwork wise .. again, is perfect. It's been done forever. It is faster and far less expensive than any unified payment and order system.
as long as you've got enough order volume to keep a delivery driver consistently busy, that works fine and the apps are unnecessary. for a pizza restaurant, or anybody else focused on delivery orders, the apps aren't necessary
the utility of the apps is to distribute the load from multiple restaurants across a shared pool of delivery drivers, so a restaurant who otherwise wouldn't be able to offer delivery can tap into that labour pool for infrequent delivery orders. food delivery apps have greatly expanded the number of places that offer delivery. most restaurants simply didn't offer it before the apps.
Everyone hates calling and apps give customers a list of restaurants with menus to browse. Restaurants also do all of their in-restaurant management with software (why not paper? ask them idk) which I assume has some integration with the app.
I can imagine some type of open protocol that lets them self-host an order service though, or at least an open solution that’s hosted by many providers and many separate apps. That would be nice for everyone
Can someone help me understand how many companies are generally needed for healthy competition, as opposed to a market being considered fragmented or monopolistic? To the untrained eye, having 5 players might seem like a reasonable level of competition and suggest a functioning market. Personally, I’ve always seen food delivery as a premium service rather than an essential one — so it makes sense that there's a higher cost for the convenience of having a burrito delivered to your door in near real time.
Because the 5 players are for the entire planet, not any individual market. In any particular market, there are one or two big delivery companies. The 5 companies are Meituan, DoorDash, Uber, Prosus, and Delivery Hero. I'm in the US, where DoorDash and Uber Eats are the major players. I've never even heard of the other three, which dominate non-US markets.
Is this not missing that lots of places still do their deliveries themselves?
For e.g. in my city I can order Pizza from Dominoes or Pizza Hut. Both are located on the same road. Dominoes uses it's own staff, Pizza Hut uses Deliveroo. I've tried both but Dominoes will delivery reliably in 25-35 minutes, and Pizza Hut took over an hour and a half. Guess which one I use still!
i stopped ordering delivery for the most part as i'd rather walk and get it than pay the markup. a lot of restaurants are either spinning up their own app with discounts OR are offering a discount for ordering directly thru them. and honestly, i'd rather a local restaurant get more profit than just cutting it over to one of the apps.
a month ago my wife wanted to order chipotle on a lazy sunday and it was $64 for delivery and only $31 when i went to stand in line and get it. unreal.
These delivery companies have become a far bigger "Evil" than Amazon or any other megatech company people often like to criticize. Because they provide nearly no benefit to anyone on any side of the marketplace and increasingly offer horrible customer service.
But as I write this on the deck of a lake cabin I rented in New Hampshire, I'm reminded how different the world is outside of big cities like my home in NYC. There is one place on Doordash up here.
VC funding subsidizing the entry of these firms into the market. Few competitors contributing to pricing power among these firms. Network effects arising from coordinating the multi-sided market of drivers, restaurants, and consumers.
Early subsidization has led to the position of these firms as middlemen that can extract something akin to rent from their dominant market position. The vig that middlemen collect isn’t a benefit to consumers but something they pay for with every transaction (price mark ups, service fees, narrowed choices).
No, profit isn’t a sign of consumer benefit. Often it’s quite the opposite actually.
How do they measure 90%? If every restaurant in the US used Uber Eats and also had their own delivery, what % would their methodology say that Uber Eats had?
Tragic that I spent much of my economics classes at high school and university learning about "perfect competition". I get that it's a theoretical underpinning, and rarely a reality, but still. I remember learning that monopolies being really frowned upon ... and yet here we are ... in a world of increasing monopoly.
The last two decades have been a joke in relation to anti-monopoly action.
The thing about food delivery services is that it has one outcome people want -- to get their food delivered. It's no surprise the biggest contenders in the beginning of instant food delivery now have a monopoly.
Now to stand out you need to be dirt cheap or offer something innovative/creative..I guess like with every other industry these days
Shockers, cartel to monopoly power exists in virtually all markets.
Even things like farming whose geographic distribution and commidification maybe monopoly resistant are monopolized in processing, seed, tools,etc by companies like ADM.
I have always been curious why I don't see more local food delivery companies in my city. I imagine for all cities where there is a market for DoorDash, a local company could beat them out with more specialized services catered to that region.
I know these are three sided marketplaces and difficult to coordinate demand and supply ... but why isn't there more locally hosted town and city level options that undercut the national/international conglomerates? Food delivery is ultimately a local thing.
I'd love to live in a country where these apps are developed by the federal government as open source freeware tools for local governments to offer tip-free deliveries to citizens, and well paying jobs with good benefits.
Unfortunately, in the US that would just mean every 4 years someone goes in and tries to literally destroy it so their buddies can privatize it. The poor post office, man.
I think this will be even more consolidated in the future. Or mostly duopoly in many markets. Food delivery is capital intensive. It is unlikely that new players enter the market.
I think 5 is a good number based on no data or experience. Feels like enough where you could reasonably tell one to pound sand if they start getting too greedy, while not being forced to just take the other 1.
One of those companies are available where I live, and I'll never use them, because they make my pick ups insufferable.
I have kids, and can see McDonalds from my bedroom window, so I have more McDonalds points than I care to admit. Wolt is pissing me off every time. The amount of time the McDonalds staff needs to dedicate to Wolt staff is insane. They could easily serve twice the customer in resturante/drive-through if they didn't have to help a borderline incompetent Wolt staffer on a moped. It's actually rude to priorities deliveries over in restaurant customers. For that alone I will never use Wolt. Fortunately every single good pizza place nearby have their own drivers, who are actually polite and competent.
I’ve had this experience specifically with Wolt in Germany: sat in a busy restaurant with sit in diners waiting 2 hours for their meals while the kitchen seemed to be catering for a constant stream of Wolt drivers.
And the real kicker is that of course since this is Germany all the negative reviews have been sued away, including my wife’s very moderate 3 star review. Of course German restaurants will claim it is libel if you write that you had to wait for your food
the food arrives lukewarm, in a smaller portions and costs more
in addition their widespread use hurts the restaurants you like
and drives down wages for society, because the only people who can live on what they pay out to the drivers are illegal immigrants paying zero tax (with the state paying for room and board)
I honestly just can't comprehend how people so easily just throw away money on these apps - The fees are ridiculous on top of already expensive restaurant prices.
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This is what our actual economic system is all about: a series of market oligopolies whose greed is unchecked by our political establishment and legal apparatus with the complicity of the voting masses. Any attempt to implement measures to palliate the social decay and corruption it breeds will be branded as chinese communism and opposed by the media and the public.
We have collectively decided that the economy shouldn't be in service of the people, canis canem edit.
They do already, google, Microsoft, meta, Amazon all AI defense contractors using their technology to suppress negative feedback to their involvement in military contracts. Police using surveillance to spy on journalists phones. Healthcare approval completely automated by AI and school that don’t know difference between student or AI homework.
This is essentially the story of tech companies across nearly every industry where they have come to dominate.
This is one reason that I see most tech companies as essentially a net negative for society at large, as the goal is nearly always to control a large monopoly (and this is fully admitted by many tech leaders, e.g. Thiel) which the Internet makes possible. Pre-Internet you would see the same dynamics, but usually on a much smaller regional scale. I think that many of the growing problems in society today are fundamentally attributable to the extreme concentration of wealth and power that modern tech enables.
There's a George Carlin bit about politicians. The punchline is "the problem isn't the politicians, it's the people." His point is that nothing emerges from a vaccuum.
Politicians are people just like everyone else, they're just responding to incentives created by a majority vote. Tech companies are just like any other company, except a lot more people are willing to pay for their goods and services. If Carlin were alive, he'd say that the problem isn't the tech companies, it's their customers.
I'm actually far from convinced that tech companies are a net negative for society. Amazon makes billions because everyone wants competitively priced goods delivered to their doorsteps. Google makes billions because they provide free access to a large portion of humanity's information.
My theory is that if you're extremely pessimistic about technology or politics, you probably won't like anything that happens when large groups of humans make collective decisions. There's an air of let's go back to the good old days when we were hunter gatherers to the whole thing. Personally, I've accepted that it's always going to be messy and chaotic, but a lot of good things are going to come out of it as well.
> There's an air of let's go back to the good old days when we were hunter gatherers to the whole thing.
I strongly disagree. On the contrary, I see the arch of many technological advancements in that, in the beginning, they solve a crucial need, but then once they solve that problem they attempt to hijack the positive feedback systems of humans (e.g. addiction systems) to stay in power.
Consider the food industry. Many people were under pretty constant threat of starvation through much of human history. So in the 19th and 20th centuries we essentially solved that problem in the Western world with the modern food industry. But we didn't stop there. Once people had all they needed to eat, food companies had to figure out how to get them to eat more, and they were highly successful. Saying that much of modern food science is a net negative for humanity doesn't mean I think we should go back to being hunter gatherers, but at this point every new "innovation" in the industry is really just an attempt to try to get people to eat/drink more.
I think much of the modern Internet/Web has been on that "net negative" slide for at least the past 10 years. Are people at large to blame for this? In one sense, sure. But I have no problem laying the blame at tech leaders who are essentially in the role of drug dealers for much of the industry. I mean, sure, drug users are ultimately at fault too, but we look down pretty harshly at drug dealers for their role in the process.
End state of market economics leads to cartel and monopoly.
In tech this is done by controlling people's information and collecting their personal data
Combine the centralization with control and privacy intrusion with authoritarianism in government and you have a worse than 1984 future
It's all RIGHT THERE. Turnkey. Ready to go. And all the cultural institutions in government, the popular those of the ultra rich, the populist desperation of the poor, disappearance of the middle class, is leading to authoritarianism.
Just because Americans have an obesity problem doesn't make every food vendor a drug dealer. Come on, get real. Basically everything that is being sold can be abused by the user. Does that mean every vendor of anything is potentially a bad actor? I believe you are exaggregating. BTW, I virtually never thought about Thiel when I ordered a Pizza. Is there a reason why you drag the owners into this? It basically sounds like you are antagonising everyone above your wage-class. I don't get it.
It’s by degrees right? You can make a business that treats people as well as you can manage while feeding yourself, but almost anybody will want more than that, and some people want way more than that for a variety of social and innate reasons. Eventually you cross some arbitrary threshold where you’re doing, or at least enabling, really awful mistreatment of people and you use the level of indirection you have or some ideology or some excuse to justify it, but that’s when it’s a problem. People above the parent commentor’s wage class just so happen to also be the people most susceptible to this process, which is why they’re in a high position in the first place. Also, not that this is particularly important, but many or most of them (the extremely rich) dislike and look down on you because they need to in order to feel alright about their position. You don’t owe them kindness that they won’t return.
>Also, not that this is particularly important, but many or most of them (the extremely rich) dislike and look down on you because they need to in order to feel alright about their position
The rich don't give a shit. They're comfortable in their position. It's the uppity doctors, lawyers, techies, and everyone else with an office job that need to feel like they're better than the plumber, line cook and brick layer.
Every idiot who lives in a good school district with manicured lawns and reads the nutrition facts on the frozen dinner they're buying at Target thinks they're saving the world by telling the politicians to ban fireworks and menthols.
Yeah I know that's a broad brush, don't care.
> The rich don't give a shit. They're comfortable in their position.
I don’t get why you say this. Almost everyone has a need to feel like a good person, justified, etc, and the easiest way for someone with a several hundred million plus net worth to feel that way is to believe that they earned it, are special and that normal people are too stupid to do the same thing. There’s lots of other options for justifications but none of them are particularly flattering to the have-nots.
I think OP's point wasn't so much about the fundamental services being bad or harmful to most of their users, but rather about the over-optimization of every single tech service toward finding ways to build on people's bad instincts and decision-making to squeeze just a penny more out of them.
> Just because Americans have an obesity problem doesn't make every food vendor a drug dealer.
Not all, just some of them. It's pretty obvious which ones when you actually look at how they design and market their products.
When no ceiling is imposed, the natural state of business is to consume all oxygen.
It doesn’t matter that you don’t know who Peter Theil is when you buy a pizza. It matters that he somehow makes money from that pizza and if he can, he will extract more value than the pizza guy.
The pizza guy had 30 years to conquer the internet. They could have hired a coder to do their online order website. 12 years later, they could have hired a coder to create an ordering app. Most of them didn't, because they weren't willing to part with the money. Now, Lieferando takes a 10% cut from every order because they created infrastructure the customer actually wants to use. What is so bad about it? You can only cut out the middle man if the vendor is going with the times.
Or they can just make pizza. Meanwhile, I could get a $11 pie delivered with a phone call 20 years ago, and now I’m paying $35 for some stupid cloud app to do the same thing.
It's not black and white, but what you're saying sounds like "just because users have an attention problem doesn't make every social media app an attention grabber"
I mean, companies optimise for profits and at some point people fall for it in excess which is the point OP made.
It kinda makes sense, because the means the companies employ are psychologically advanced plays on people who don't know the spelling of psychology.
I'm probably manipulated into scrolling more than I wanted to or buying more than I wanted to on an everyday basis.
> Does that mean every vendor of anything is potentially a bad actor
Yes, of course they are. Left unregulated they will form cartels. As Adam Smith said, "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."
They will try to raise barriers to entry as well, to limit competition. They will try to increase sales by many means.
They may be ethical enough not to do all that, but the potential is definitely there.
Are cartels inherently unethical? The US government approves of and protects certain cartels (e.g. unions, hospital systems, defense contractors).
If anything, cartels thrive under heavily regulated and dirigiste economic systems, where as in an unregulated market a cartel would eventually lose to a competitor or succumb to infighting.
We don’t have to go back to hunter gatherer societies, just do some antitrust. I dislike the commentary that any pushback against tech companies means you’re a Luddite
Put a cap on company size. No organisation can be worth more than (say) a few hundred million. You can still make big and complex things but it'll have to be several small(er) companies working in concert, which is already kind of how massive companies work internally anyway. Less efficient, maybe, but I am not entirely convinced that huge companies hoovering up any attempt at competition leads to efficiencies in the long run. And the more value that can be extracted by smaller players, the more that ends up in the hands of humans rather than pooling R the top. Maybe have a credit for capital outlay so building and operating a factory is better than building a financial war chest, and a credit for non-executive salaries so paying your workers increases your company's headroom.
I have long had ideas on those lines: https://pietersz.co.uk/2009/11/fix-capitalism
Really good. I have one more proposal.
Capital gains tax that increases progressively with gains, and decreases progressively with duration i.e. incentivize significant investors to create long term value instead of chasing quick exits.
Anti-trust for an industry where there are at least five companies doing well in any given space? That's not called a monopoly, it's called competition.
Edit: I wasn't accusing everyone who is critical of tech of being a Luddite. The attitude that nearly every tech company is a net negative for society goes quite a bit beyond criticism.
> Anti-trust for an industry where there are at least five companies doing well in any given space? That's not called a monopoly, it's called competition
You need to be completely out of touch with reality to read an article on 5 companies dominating a global market and your take from that info is that there are no anticompetitive practices because 5 is more than 1.
Its called oligopoly and oligopsony: https://moneyterms.co.uk/oligopoly/
In the IO literature it would be expected that five companies of vaguely similar size in oligopolistic competition (say Cournot competition for simplicity) would be pretty close to the equilibrium of a perfectly competitive market.
There is infinite competition for food delivery. People can just go pick up their own damn food.
I don't think that simply the ability to perform a task is sufficient for competition. It could still be impossible for a newcomer to compete with established corps' marketing budget and economies of scale.
The point is who cares. Getting a burrito delivered is a pointless luxury service that no one actually needs. Instead of complaining about competition, just stop wasting money on it.
> The point is who cares.
You don't care. That's fine. It's not like there is a retirement to be informed before commenting. Sit this one out and let everyone who do express their concerns.
If five companies competing is anti-competitive, then how many competitors does it take to suddenly become competitive and why? What is the significance of this larger-than-five number? Is it the same across industries? How do you derive it?
This seems to rest on the mistaken belief that a corollary of monopolies being bad is that more competition is always better than less competition. If everyone was a competitor in the restaurant food delivery market we'd all starve to death as no one would be growing food. An efficient economy wouldn't waste resources competing over less important things like restaurant food delivery over something more beneficial.
The HHI [0] attempts to quantify that. [0] https://en.wikipedia.org/wiki/Herfindahl–Hirschman_index
Perhaps the issue isn't whether there is a specific number of companies. It seems to me that there is a competition problem when companies behave in a way that is harmful/disliked/bad but no one steps in to provide an alternative because they can't compete with established marketing, economies of scale, network effects, etc.
"completely out of touch" is definitely an exaggregationg. Besides, as if competition would really increase quality. Where I dwell, we have around 3 active delivery services. Only 1 of them has an app with useable UX, icnluding accessibility. Competition? Meh. What for? So that I can watch the smaller guys blunder their way to the top?
> "completely out of touch" is definitely an exaggregationg.
Is it, though? I mean, can you present a coherent argument supporting the idea that a global market being dominated by 5 multinational corporations does not flag a risk of anticompetitive practices?
> Competition? Meh. What for? So that I can watch the smaller guys blunder their way to the top?
Is this what you have to offer to refute the idea you're completely out of touch?
If by "coherent" you mean the Webster definition then yeah, anyone can.
If by coherent you mean "using only facts and opinions that I accept at face value within my world view" then no.
Personally, I think 5 is way too little. But there are probably some markets for various products and services where 5 is fine. I don't think the number matters so much as that there be potential for a long tail of upstarts who could potentially displace a big player quickly. Whether 95% of the market is captured 2 or 22 players doesn't matter, they gotta know that someone is waiting to take their place if they screw up.
You read an article that talks about consolidation of food delivery and increasingly high barriers to new entrants and think that’s competition?
Where does the article mention barriers to entry? My reading is that that the consolidation is due to venture capital moving investment to other areas. Anyone who wants to start a new food delivery app is still free to do so, as long as they can find funding.
This is the definition of competition according to Wikipedia: "Competition is a scenario where different economic firms are in contention to obtain goods that are limited by varying the elements of the marketing mix: price, product, promotion and place."
Yes, sounds like competition to me. Network effects are not anti-competitive.
> Anyone who wants to start a new food delivery app is still free to do so, as long as they can find funding.
This argument is meaningless because you can always make it. There's a quasi-monopoly? Yeah but you're still allowed to make a new company so it's not really a problem is it? You'll fail, unless you're backed by even more powerful venture capital, but I don't care about that because I get to keep making the argument that it's a free market.
The reality is that the only way you can compete in this market is to already be a billion dollar company, or have the backing of one. That's not a free market by any reasonable definition.
What it is, is a clear case of technofeudalism.
Now imagine you live in one of the other 190 countries of the world who do not or no longer have significant players in the industry because they were crushed by those five foreign companies. It's not competition when the wealth and power is so disproportionately held by the same people in the same places.
Can you name them which countries this impacts?
China (basically) only has didi. Not much the USA can say here.
Southeast has Grab, and within each country there are at least 2 local competitors (Be, GoJek, Bolt, Line Man, Bluebird, etc). I believe Doordash just bought Deliveroo, making it the only American competitor in SEA.
In Europe, the main players are local food panda / Delivery hero and Just Eat.
India's winning food delivery is Swiggy.
What countries have both the talent to build a food delivery app and the USA is the dominant player?
Every country has the talent, software development isn't some esoteric knowledge. But even if you imagine that only people in developed countries are capable of writing software, there is Australia, New Zealand, Canada and Taiwan for starters.
I don't think it makes sense to focus on the US when three of the five companies in the article are from Germany, Netherlands and China. The problem is not America per se, it's the pattern of large and often (but not always) foreign companies extracting wealth from what used to be hyper-local operations.
> What countries have both the talent to build a food delivery app
It's not about "talent" these are utterly pedestrian apps that anyone mediocre team can fart out in a quick amount of time. It's about capital for massive scale, massive advertising, literal VC-subsidised dumping, takeovers of the competition, etc.
Someone should let the CTO of uber know they they could be paying new grads instead of hiring staff engineers. The could save a lot of money.
> Can you name them which countries this impacts?
Sure, go to each country and check what food delivery companies operate in them, get a list of companies operating in the market that are not controlled by the big 5 mentioned in the article.
In Europe there were a few companies operating in the sector which were taken over by these global companies. I recall the Glovo takeover by Delivery Hero. You mention Foodpanda but you seem to be unaware this is a brand from Delivery Hero, and Just Eat is a Prosus company too.
> What countries have both the talent to build a food delivery app and the USA is the dominant player?
I'm baffled by your comment. Do you believe only the US has "the talent" to put together a food delivery business? Because even if you ignore the fact that 2 out of the 5 dominant players are not US companies, you need to be way out of touch with the reality of both the technology side and business side.
I work at Grab (and ex-Yelp). I am very familiar with FoodPanda and their owners as they are a direct competitor to my employer. I literally work for one of the non-American "local" food delivery services. But within out region, there are reasons we don't have technology offices in every country we operate in and we have tech offices in countries we don't operate in.
There are also reasons that we continue to exist while our competition pulls out of the region. There are also many reasons why hyper-local delivery services aren't able to compete with global or regional winners: Talent, access to capital, and TAM are big parts of that equation.
If someone that works for a non-american food delivery service provider is out of touch, I wonder what your credentials are that puts you in touch.
Also, in the blog, 2 of the 5 players ARE American (Doordash and Uber). The other 3 are European and Chinese.
As a software engineer in the US, I like that the US sucks up money from the rest of the world, that’s why my dollar goes so far when I travel and why I can retire in a non-reserve-currency country for cheap
Do you not feel as though that's incredibly anti-social? It's a very zero-sum "I'd prefer if things were better for me in direct proportion to how much worse they'll be for '_others_'"
Right, and you'd like if there was a special 0% income tax only for software engineers or if every software engineer got a free pony too.
That's why we need to also consider the needs of people that aren't American software engineers.
There’s such a thing as collusion - convenient way to claim “we’re not a monopoly, there’s at least 4 more competitors” when behind the scenes they’re all talking and agreeing in price fixing, limiting offer, blocking other competitors.
That is known as a "cartel," which is also prosecutable under the Sherman Act. It applies to not just monopolies. But that doesn't seem to be the case here.
It's an oligopoly.
> I dislike the commentary that any pushback against tech companies means you’re a Luddite
Me too, and I actually AM a Luddite
Carlin's actual view is a lot more nuanced than that. Big Tech (along with Walmart, Visa and more) have gotten to where they are by employing illegal business practices such as price discrimination and exclusive dealing. These tactics laid the groundwork for the mass mergers and rollups and the monopolies and oligopolies that dominate America today. The laws on the books which prohibit them, like Robinson-Patman and the Clayton Act, have gone largely unenforced since Reagan. Software sped up how quickly businesses can exploit these criminal tactics but this has become a problem across all sectors of the economy.
This shocking degree of negligence has required complicity from both political parties, but there's a deeper issue which is that this stuff is just too arcane to be linked meaningfully to a popular vote in today's democracy. We're talking about a nation where 1 in 5 people are now illiterate and that number is rising. There are two parties and a vanishingly small number of candidates presented to them every couple of years, meanwhile the media bombards them with a dozen supposed crises every day. This system is never going to produce a consensus that the most important priority is enforcing some law from 1914. Popular sentiment is more likely to be expressed through the rise of more guys like Luigi Mangione.
The ever-increasing flood of information (crises, as you call them) will, I believe, eventually become the downfall of our political system. There is already so much to read in a single day that you probably couldn't consume it all in your remaining lifetime if you tried. LLMs will only make this worse. Eventually, super-powers—whether political or economic—will send out so much misinformation about everything that no one can really follow it or distinguish truth from falsehood. People will simply stop participating in the global conversation, and their votes will become obsolete and guided by the most intruiging stories.
Tech companies are not like other companies because they can trivially create vendor lock-in without any geographic constraints on where the customers are.
In fact, it's harder to avoid vendor-lock in in tech; it takes extra work to open things up, possibly a lot of extra work.
Even a well-intentioned open-source program can garner a user base which can't easily migrate off it.
The customer is responsible for avoiding vendor lock-in, not the vendor.
Sure! Don't like your country's passport application website? I'm sure debian.org has an alternative for you.
What do you propose? A country builds multiple passport application website for you to choose from?
Then let's use regulation to flip that around, and put the onus on the party that
a) is making money off it
b) has a vested interest in increasing lock-in
c) is a singular entity, not a dispersed set of individuals
d) is doing this as part of something specific and organized, rather than just trying to go about their daily lives, buying an orange here and a smartphone there
I generally agree with your point, but would like to mention in my opinion Amazon (not AWS) makes billions because they've captured the market and prevent any meaningful competition from arising due to their "Fair Pricing" policy rules. I'll be happy when there are meaningful alternatives to Amazon that don't have inflated prices due to price parity which have an excessive return cost built in...
Amazon.com has 12% market share in global e-commerce and 38% in the United States. I think they have plenty of competition.
https://grok.com/share/bGVnYWN5_bc9cd328-15d3-4047-bde6-d57a...
Lobbyists muddy the incentive waters a bit when it comes to politics.
But I agree with your conclusion. I don't think there are many truly net negative companies/sectors/ideas that aren't either dead or on their way out -- but I'm sure you'd agree we should still hold tech accountable and optimize for our own benefit.
Btw, as a lifelong Carlin fan, I find myself asking what he would think pretty often :)
Carlin was a true philosopher. I find myself disagreeing with him more these days than when I was younger and angrier, but I still find him endlessly entertaining.
My theory is that is what is latent in the terrain of human psychology is a propensity to view misconceptions about which problem it is, as evidence there isn't one. When I stop to think about it, I realize that the misconceptions are evidence there is.
With that in mind: in what way should we terraform the latent terrain of human psychology to fix this problem? Because breaking up the tech companies seems like a way, but you seem to have a different one in mind.
George Carlin also said: "'cause they own this fucking place. It's a big club, and you ain’t in it" (https://www.goodreads.com/quotes/964648-but-there-s-a-reason...).
I think there's a power dynamic that it seems like you are ignoring, that big companies take advantage of. Amazon gets cheap goods to your doorstep, and removes all competition while doing it. You think those goods are going to stay cheap,i don't. This is a playbook that wallmarts followed for years. Amazon also gets sellers, by selling amazon versions of their products. Google makes billions by showing you ads, they got you there with free services, but now they enshittify.
>There's an air of let's go back to the good old days when we were hunter gatherers to the whole thing
I think my concern is not going back to the bad old gilded age days, where wealth inequality lead to most humans having a terrible life while a few had a great life.
> My theory is that if you're extremely pessimistic about technology or politics, you probably won't like anything that happens when large groups of humans make collective decisions.
The main issue is that in tech and politics it is a small group of humans making collective decisions for all.
Carlin's comedy peaked during near the era that I think most consider the Golden Age of America. Times have immeasurably changed since then.
On the tech side of things Google has recently been hit by multiple anti-trust lawsuits, and lost them all. That's perhaps even less telling than the evidence presented. They brazenly and actively conspired to kill or buy any and all competition, but they've become so large (and so important to the US intelligence agencies) that they'll get nothing more than the most gentle slap on the wrist, relative to their scale. The moral of the story seems to be don't cheat, but if you're going to cheat - cheat relentlessly, ruthlessly, and take it to an extreme - and it might just become worth it.
Politics has become similar. Politicians have become way better at their jobs in modern times than in Carlin's era. Their "job" of course is just to get elected. It turns out that actually having a platform or popular ideas is far less useful than making people hate and fear 'the other guy' enough. When you rely on hate and fear, people will even actively vote for people they despise simply because 'it's the lesser evil.' With modern politicking even Reagan-Mondale would have still been a 50/50 coinflip and Regan would be an imminent threat to American democracy, and Mondale would want to turn your kids gay. Actually if we reached the modern era of divisiveness and stupidity in Carlin's time, there's a real chance America, certainly as we know it, wouldn't even exist today.
>They brazenly and actively conspired to kill or buy any and all competition, but they've become so large (and so important to the US intelligence agencies) that they'll get nothing more than the most gentle slap on the wrist, relative to their scale. The moral of the story seems to be don't cheat, but if you're going to cheat - cheat relentlessly, ruthlessly, and take it to an extreme - and it might just become worth it.
The moral of the story to me is that the government doesn't give a crap what you do so long as it's good for them. Google only got punished, and even then it was a big "show" with no results not because it did wrong, but because it so flagrantly violated the law the government got pissed that it was being made to look a fool. They didn't really want to "punish" google because it was their buddy and they found it useful, they just wanted the appearance.
"Monopoly" used to mean a single company controlling a market. Now folks are now hollering "monopoly" about five different companies competing and collectively capturing 90% of a market?
Plus the market is artificially defined to be small. It excluded companies that do their own delivery (pizza places and others), home food delivery that isn't from restaurants, and the old option of just driving yourself to a restaurant.
There's thriving competition in the industry of getting people food, and lots of options that didn't even exist a decade ago. Crazy that it's being spun as the exact opposite.
> "Monopoly" used to mean a single company controlling a market. Now folks are now hollering "monopoly" about five different companies competing and collectively capturing 90% of a market?
Five companies controlling 90% of the market is more than enough to form a cartel or spontaneously self-organise in ways that have the same effect even without explicitly coordinating. (I once read an economics paper that I wish I could find now that said this would happen when the top 4 companies in an industry controlled more than 60% of the market)
What are the primary problems with monopolies? Do you think those exact same problems could be seen by a small group of of companies who act in a monopolistic manner (much like a cartel)?
I think you are stuck on the definition of the word monopoly rather than the reason behind why we ban/rule against them.
Both things can be true. Amazon is great for consumers, Google is great for consumers, no doubt. But consolidation of economic power under tech juggernauts I would argue is a net negative for society over the long run. The tech giants are not at fault, neither are the consumers, the fault lies with the system in which they operate that allows one outcome while ignoring another (potentially bad) one. What we need to do is change the rules.
You're right in a sense. The thing is what people are "willing" to do or what they "want" is a somewhat amorphous concept and depends on how options are presented to people.
Human nature involves the ability to let different dimensions of our cognitive apparatus cover one another's weak spots. In my view, a lot of what many would consider wise decisions throughout human history have been instances of this, many of them in the form of law, from child-labor restrictions to drunk-driving laws to birth control to incest taboos.
There just seems to be a certain segment of society that for some reason insists that "what the consumer wants" has to be construed in this narrow way as what is in the person's mind at the instant of a decision, and that any attempt to broaden that person's decision-making is somehow unnatural. Well, no. It's good to make changes that create immediate costs if doing so can save us from future costs that we're not good at foreseeing at the moment. It's good for Ulysses to ask his men to tie him to the mast. It's good in many cases for people to deliberately, explicitly, not do things they feel like doing because they will regret those things later. I believe this is often true even from a perspective of self-interest (e.g., people will not like it if a monopoly emerges and raises prices later), but it's even more true if you incorporate a bit of consideration for the well-being of others, and I think plenty of people are willing to do that to some extent.
> they're just responding to incentives created by a majority vote.
That's not completely true since there are too many mechanisms built in to limit those incentives
> Politicians are people just like everyone else, they're just responding to incentives created by a majority vote.
I don't think this is remotely true, and feels like victim blaming. No one is voting for monopolies and exploitation. At most you have people voting for tax cuts and the hopes of improved economies, which are then faced with a bait-and-switch of erosion of legal rights and protection and further anticompetitive practices.
These so-called "food delivery" companies are the worst example possible as they are renowned for the way they exploit employees with blatant violations of basic labor laws. No one voted for that.
> Tech companies are just like any other company, except a lot more people are willing to pay for their goods and services.
No. Their whole business model is based on exploitation to the point some countries had to force them to finally get their riders into actual employment contracts.
> I'm actually far from convinced that tech companies are a net negative for society. Amazon makes billions because everyone wants competitively priced goods delivered to their doorsteps. Google makes billions because they provide free access to a large portion of humanity's information.
You have a far too naive and out of touch view on the problem, much like a few years ago people from colonial powers believed their presence was net positive for natives as that meant they could receive a salary for waiting on them hand and foot. Amazon's example is even more laughable as the company is notorious for exploitative and outright abusive labor practices. I understand you like to receive packages, but I seriously recommend you read something on the topic because their impact on society is far from net positive.
Yeah it’s Soylent green all the way down; just people hiding behind allowed legal obfuscation.
Physics is inviolable. Human tech will never succeed in the fancy things we imagine. No evidence it allows such things naturally. We’ll conjure a bunch of artistic representations, but never harness enough energy to break things.
Hunter gathering is a bit far back. Since none of the geniuses can guarantee 100 generations from now will still care about rockets to Mars, listening to them today about the far future is asinine.
Keep enough food and hardware stores around and give people time back.
I’m anti story mode and that means Sam Altman’s or some notion of future human greatness. Fellow US readers; yeah that’s right I don’t care you exist. You keep me off the hook for your healthcare, good luck. Why would I care when you keep yourself off the hook for my healthcare? Fuck you.
I’m fucking sick of Americans clearly being low skilled useless to themselves exploiters of others for zero in return but a made up story. In all my study of physical science I never come across evidence any of this wanky web tech is a fundamental force. Occam’s razor applied, it’s all just the hallucinations of arbitrary meat people.
Inequality is built into our society’s structure - capitalism divides people into two classes - workers and owners. The level of wealth inequality in the current world is quite extreme. Even if you accept some degree of it because “it’s always going to be messy and chaotic” - the current level is truly poisonous for a healthy society. And it’s the result of neoliberal policy across the world since 1980 - the deregulation ideology of the rich filtered into governments. We have concentrated wealth; this wealth concentration has intensified itself as those benefiting from it in turn shape government policy in a vicious circle. The bleak world today is shaped by these forces - impending climate catastrophe (as fossil fuel interests can’t be reigned in), austerity (as the rich refuse taxes and control the governments who would tax them), authoritarianism (as the relationship between money and power can’t be bothered with pretense anymore), concentration camps (as the wealthy manufacture scapegoats for the mess they’ve made).
Turning around and blaming consumers for this while pretending it couldn’t be better both is truly a shallow take. Carlin wouldn’t let these people off the hook like you do:
> A person of good intelligence and of sensitivity cannot exist in this society very long without having some anger about the inequality - and it's not just a bleeding-heart, knee-jerk, liberal kind of a thing - it is just a normal human reaction to a nonsensical set of values where we have cinnamon flavored dental floss and there are people sleeping in the street
Is it really worse now than hundreds or thousands of years ago when there were kings and pharaohs and other rulers that had literal peasants and slaves and such all working for them?
I don't know, but it fees like people are more equal now than back then at least to me. Or more people have a much higher standard of living at least.
Realistically climate catastrophe seems worse to me yes than living as a peasant or ancient Egyptian. Our choices aren’t so limited however. But if you mean we should look at our standard of living today and appreciate them, let’s examine that with some nuance.
Since 1980 pay and productivity have been decoupled in the global north such that the wealthy have continued to grow richer while the median worker hasn’t seen their real wages rise, despite being more productive. In fact much of our rise in standard of living prior to 1980 is not due to the allowing concentrated wealth to run rampant but people fighting the wealthy for things like worker rights, democratic rights, social programs.
If we look at the global south on the other hand since 1980 we see a great rise out of poverty. This has happened primarily due to China’s socialist policies which have pulled 800 million people out of poverty.
Allowing a small wealthy minority to run one’s country is undemocratic as they are able to use their outsized money and power to control the government and further grow their own wealth. It’s precisely why we face problems like authoritarianism, climate change, and austerity - toxic transitions all funded by monied interests.
Does the world really seem like it’s continuing to progress to you? Is our choice really so limited as either ‘hand over the reigns of society to billionaires’ or ‘revert to medieval peasantry’? Consider the improvements in the quality of life we’ve seen in the past century. People came together and fought for those improvements. They didn’t trust and depend on their monied masters to drop crumbs their way. That never happens. They fought for better lives and achieved them.
To me it only seems like we are in a quite small scale decline in the otherwise long term upward trajectory of standard of living for the average human being. The overall upward trajectory that I think is mainly driven by technology, abundance, and prosperity.
I’m puzzled by your view but also curious. What’s short term about the climate crisis? And with intensifying authoritarianism what do you think is going to reverse our current trajectory? And what do you think determines whether standard of living rises or not? In our circumstances, which to me seem quite dire, I’m curious what motor you think powers human progress.
When did the discussion turn into climate crisis? I thought this was about quality of life. That's all I am talking about here.
Quality of life is determined by how well off the poor or average people can live. How "easy" their life is and what luxuries they can afford, how long they now can live etc.
I think the advent of technology and mass commercial farming food production and all that allows the general population to live easier lives than what you had to do to survive hundreds and thousands of years ago in like medieval times or ancient Egyptian times etc.
I think any little regression in quality of life in these last few decades is but a small downward blip in the greater and steady rise during all of human history.
I guess with the impending climate crisis quality of life will very likely go way down.
Climate catastrophe is expected to destabilize societies. A natural outcome from that could plausibly be the rise of extreme ideologies that advocate for nuclear conflict for example. It’s plausible human beings face an existential threat in the coming decades.
I think human progress is a chaotic process dependent on human choices, not a determined one. For example some hunter gatherer societies have lived lives of leisure working as little as 15-20 hours per week - quite a lot of ease compared to the modern work week most of us see. Human history is much more heterogenous and chaotic than what one might conclude from a perspective limited to today, medieval peasants, and ancient Egypt.
Luxuries I think should be viewed critically also. The effect of luxuries is unfortunately likely canceled by the hedonic treadmill. In our current society roughly 30% of people are suffering from mental illness like anxiety or depression. This is despite having iPhones instead of landlines.
You are right that longevity has increased over the long term. I think this is a stronger area of your argument. But is longevity alone a good measure for quality of life? I think we should include other factors, like happiness. Unfortunately we just don’t have those statistics over any meaningful horizon.
Overall I think measuring quality of life over the long history of our species isn’t quite as straightforward as you make it out to be. We must be wary of adopting just so stories. Quite a lot of heterogeneous human experience falls under this generalization, and most of it, at the very least, we just don’t have good data for.
In my view, progress that human beings experience is contingent, the result of our choices. Sadly I don’t think there is an arrow of history that guarantees a better future for our species. The risks we face in the upcoming years are immense. If there is a better future waiting for us, I believe it’s one we will have to fashion ourselves. Relying on an abstract concept like the arrow of progress can even be dangerous if it misleads us into forsaking our agency in fashioning our collective future.
> My theory is that if you're extremely pessimistic about technology or politics, you probably won't like anything that happens when large groups of humans make collective decisions. There's an air of let's go back to the good old days when we were hunter gatherers to the whole thing.
Hunter gatherer is the only alternative to a society under total dominance by mega-corps? This reminds me of individual stories from life under communism and brutal dictatorships where the dystopia is so omnipresent you don’t even remember what was before, nor could imagine anything meaningfully different. Instead, you take joy in the little things, like (today) the scraps left over after another market war – ”at least now we have a search engine”, ”I can order a taxi from an app”. I understand it, because it has been such a dominant force in the kind of second reincarnation of neoliberalism since ~80s in the US in particular. This apathy is the perfect wet blanket to prevent systemic change and perpetuate the status quo – no suppression of dissent is needed if there is no imagination or expectation of a better society. A lot of powerful interests are spending a lot of effort trying to convince us that any meaningful change would make things even worse, not better.
In my opinion, the best way to break these cycles is to study the past, other countries and many times smaller local communities. There are countless examples of well functioning systems if you pay attention. And new ones being established all the time. I’ve seen local markets completely flourish in just a decade, because of good policy. Once you see these things, and know in your heart it’s possible, there’s no going back.
I’m intentionally a bit vague here, because what’s meaningful to one person can be inconsequential to another. Which is why it’s so important to discover these things on your own. That’s the way to turn complacency into hope, and hope into organized action.
"Local communities" existed for millennia and didn't manage to reduce the child mortality rate and extreme poverty rate to effectively zero. I know neoliberalism is a dirty word, and there are plenty of problems with the modern world, but I would rather live in a neoliberal global society than the "local" world of 200 years ago.
Again, you have many more options than just 2.
What are those other options, and where have they been proven to work at scale?
Here's the bit on Youtube (I couldn't find an Archive link): https://www.youtube.com/watch?v=LrSAxtIYM08
This is the right conclusion, and I love sharing that video for that reason.
As of 2025 everyone globally has everything they need to make the world a great place for everyone. Instead, people continue to take the lowest energy route for their personal actions, which means they do not even think about the externalities of that purchase from Amazon, the Latte from Starbucks, continuing living in (insert your broken system here), working for some billionaire etc...They just shrug and think "its out of my control, besides I don't have any impact and why should I suffer unnecessarily"
There are millions of examples of individual people who had no education, being actively oppressed and violently attacked changing their situation by either moving or overthrowing their oppressors. Harriet Tubman comes to mind.
It's never been easier to do that, but people would rather not.
The entire "illegal immigrant" concept proves it, people literally spending their entire life savings ($5000) to pay coyotes to smuggle them in horrific conditions so they can be slaves picking strawberries. I know a Houston restaurant owner who did that trek twice from Guatemala, getting deported the first time and he just saved up and did it again. While speaking no english. Tell me again about how it's not possible to do something. Meanwhile the citizens can't be bothered to learn about their own history or you know, do anything.
I've tried to start multiple non-heirarchical anarchist cooperative organizations and the number one challenge is finding people who will put the group ahead of the individual. It just doesn't happen. There are no organizations where that's true. No church, no government, no state, no charity, nothing, nowhere actually meets the test of holistic globally aligned "good."
I read the Medicins Sans Frotiers book long ago, even they were terrible and continue to fight internally [1]. Unions now make most of their money from capital investments [2], which is directly in opposition to their anticapitalist philosophical roots. All of this is because the members don't care and don't have any desire to have less, they all want more forever.
At this point in history, everyone has access to the information they need to make globally holistic decisions. It's not possible to claim ignorance, ignorance is strictly a choice and ultimately a existential personal limitation.
There are no organizations that exist for the benefit of society and they cannot exist because humans fundamentally lack the cognitive ability to think beyond Dunbar's number but their actions have global consequences.
Self elimination is the only possible arc for humanity.
[1] https://healthpolicy-watch.news/inward-technocratic-msf-lead...
[2] https://jacobin.com/2023/02/finance-unionism-union-density-d...
The job of a union in the non-sectoral-bargaining structure of the US is to shove more money into the pockets of their members, period, end of story, and that is exactly what their members pay them to do
> Self elimination is the only possible arc for humanity.
Hey man, at least add a spoiler alert.
We eradicated smallpox and recovered the ozone layer through global coordination, not even a century after murdering each other by the tens of millions in two world wars. We're capable of both.
> recovered the ozone layer through global coordination
The ozone layer won't be "recovered" for about a century, assuming everyone plays nicely[1]. It is still diminished from CFCs, and we're still being bombarded with more UV than previously.
[1] https://www.newscientist.com/article/2367525-ozone-destroyin...
> I've tried to start multiple non-heirarchical anarchist cooperative organizations and the number one challenge is finding people who will put the group ahead of the individual. It just doesn't happen.
I could have saved you the trouble if you'd just asked me!
Over 20,000 communes have been started in the US. None have survived. What baffles me is why people keep believing they can work.
Free markets work because it harnesses the inherent selfishness of everybody, rather than trying to override selfishness.
> it harnesses the inherent selfishness of everybody
the biggest lie we're constantly being told: https://www.econlib.org/library/Enc/bios/Ostrom.html. this really annoys me, we're not inherently selfish. at least not most people. free markets don't work in any rate. how do you even come to this conclusion?
also, lots of counter examples here: https://en.wikipedia.org/wiki/List_of_worker_cooperatives
Spot on, it's so sad to see this kind of thinking so ingrained in people, when literally 3 seconds of critical thinking would lead to the opposite conclusion. Are kids just as selfish as adults, at every age? Does their selfishness change depending on what they're taught and how selfish their role models are? Is selfishness among adults at the exact same level across decades, eras, cultures, nations?
If the answer to any of these questions is "no" (and anyone capable of using HN should realistically be answering them as such), then it's abundantly clear you can't just hold up your hands and say "oh well, everybody is inherently selfish, 'ts just the way it is". Even the idea of everyone being somewhat selfish isn't really true when you consider the countless cases of people literally sacrificing their own lives through history - and not for some kind of post-mortem glory. One can argue semantics over that still being "selfish" as it's done to further a goal of themselves but that's just wasting everyone's time.
> when literally 3 seconds of critical thinking would lead to the opposite conclusion
Understanding why free markets work takes a lot longer than 3 seconds, as it is counter-intuitive.
> the countless cases of people literally sacrificing their own lives through history
Decades ago, the Scientific American ran an article about this, where a study showed that people self-sacrificing can mathematically be shown to ensure the survival of their genes. For an obvious case, parents sacrificing themselves for their children's sake. This makes it selfish. People are less willing to sacrifice themselves the genetically further away the people benefiting from such sacrifice.
BTW, it's perfectly legal to set up a commune in the US. Feel free to start one and let us know how it works out!
Ostrom: "the ones that worked did have a kind of property rights system"
LOL. And the fact that she gets a Nobel Prize for this shows how unworkable it is in general.
> we're not inherently selfish
You're selfish, so am I, so is everyone you know.
> free markets don't work in any rate. how do you even come to this conclusion?
The success of free markets in the US, Germany, Japan, Hong Kong, Taiwan, Vietnam, China, Singapore, etc.
Worker cooperatives: A worker cooperative is not a commune. In any case, there are what, a hundred examples listed? What that shows is they are so rare that a global list can be compiled on Wikipedia. Set that against the scores of millions of businesses.
> You're selfish, so am I, so is everyone you know.
you can ignore the evidence all you want. Doesn't make it correct. Google it for yourself then.
> The success of free markets in the US, Germany, Japan, Hong Kong, Taiwan, Vietnam, China, Singapore, etc.
how have they succeeded? enshittification and wealth accumulation is success? what's the metric here? decreased health? decreased lifespan? increased addiction? increased unhappiness?
> Worker cooperatives: A worker cooperative is not a commune.
Let me quote the discussion, which you obviously didn't even understand:
>> I've tried to start multiple non-heirarchical anarchist cooperative organizations and the number one challenge is finding people who will put the group ahead of the individual. It just doesn't happen.
> I could have saved you the trouble if you'd just asked me!
> Over 20,000 communes have been started in the US. None have survived. What baffles me is why people keep believing they can work.
they talked about cooperatives, you answered with communes. I gave proof that cooperatives work.
do better.
> how have they succeeded?
Bootstrapping poor people up into the middle class and beyond.
> they talked about cooperatives, you answered with communes
You score that point!
> I gave proof that cooperatives work
So go start one. What are you waiting for?
I’m very aware of those unfortunately
I was a devotee of Mr Rogers growing up and I’ve seen really successful people start from nothing and help others
40 years of hope in humanity is hard to kill but it finally died so that’s that
It took proving it mathematically to get me there
I don't know, there are plenty of (long running) examples to be found here: https://en.wikipedia.org/wiki/List_of_worker_cooperatives
A list of about a hundred, compared to the scores of millions of capitalist businesses? That's a rounding error.
Mr Rogers was indeed a special man.
The Kibutz model in Israel seems to work. What makes that different?
The Kibutzen are subsidized by the Israeli government. They would otherwise collapse.
That's not true. I just checked on it, and they used to be subsidized, these days not so much.
A lot of them are hybrid models with some capitalism, mixed with the socialism. So I guess it sort of confirms your opinion that these things don't work when pure?
But they do seem to have found a successful hybrid model.
If you mix enough gasoline with water, you can get your car to run on water, too!
Capitalism can do well despite being taxed to support socialism. The other way around doesn't work.
The Soviets starved until they allowed farmers to have their own private plots of farmland. Collective farms => famine.
You’re going really hard on loving capitalism
The problem is that capitalism mathematically ensures inequality which subverts the concept of survival because it creates extreme imbalances in agency.
What results is that capitalism must always use as reference a forever unchanged “state of nature” mythology which never existed.
Capitalists view themselves as a different species than modern anatomical humans, more enlightened etc… but I have seen firsthand that millionaires billionaires and even “middle class” people have less consciousness than those who have very little capital.
Capital enables alienation by letting the capitalist offload “life” to people who do it for them, leaving them nothing but Vice. It always corrupts
I think there are some organizations doing good in the world. The trend is not as bad as you would imagine.
https://ourworldindata.org/grapher/share-of-population-livin...
https://www.givewell.org/
>It's never been easier to do that, but people would rather not.
Never been harder with ubiquitous surveillance.
>As of 2025 everyone globally has everything they need to make the world a great place for everyone.
Disagree. Even if theres enough food being produced, its not produced evenly, and the extra labor and resources to distribute it evenly would screw a lot of this up. Then theres the idea that a bureaucracy large enough to distribute it worldwide would be efficient.
>I've tried to start multiple non-heirarchical anarchist cooperative organizations and the number one challenge is finding people who will put the group ahead of the individual.
The group is made of individuals. Ultimately eventually they will need some reward for their participation. Whenever I have involved myself in these groups theres ultimately some unsavoury character who has positioned himself as leader and siphon off the glory for themselves. Or in one case, it was just an avenue for the "leader" to gain access to vulnerable women. These groups dont work because they get hijacked, not because the people doing the work dont want to work.
>Unions now make most of their money from capital investments [2], which is directly in opposition to their anticapitalist philosophical roots.
Unions are about protecting workers. They dont have to be socialist paragons as long as they meet that directive.
>At this point in history, everyone has access to the information they need to make globally holistic decisions.
Lmao, where to start with that doozy. Local knowledge still trumps the disinfo hose.
>lack the cognitive ability to think beyond Dunbar's number
People just dont trust beyond that number, and with good reason.
>Self elimination is the only possible arc for humanity.
Lmao, there's no reason why we cant keep going like this. An engine built on brutal exploitation. Predicting humanities doom seems greatly premature.
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Instead of citing an AI, why don't you cite an actual reputable source? Those facts it ingested and regurgitated no doubt came from somewhere, and you're clearly attempting to use the facts to prove a point. An authoritative source is more helpful than attributing it to [insert ai bot here].
disagree
yes, a "source" that's widely known for producing false information is a reliable source, you're right.
the data is so fucking obvious (everyone knows there are massive OD and suicidality in this moment), of course people are going to be pedantic about the source and not debate the merits of the argument.
however you want to spin it, the source is always important. again, especially if it tends to fabricate things. don't be lazy and research a proper, first order source and not a parroted parody of a source.
you're intellectually lazy, so why would anyone want to discuss with you?
https://www.cdc.gov/nchs/products/databriefs/db522.htm > 105,007 in 2023 heavily picking up since around 2015
It’s the story of most mature industries. Food delivery also remains cutthroat enough that this is a strange place to launch this complaint from.
It is also weird that there isn't a company with 2/3 of the market. Eventually it will happen i guess.
Sysco is probably pretty close if you ignore the extremes of the market.
While Sysco is a monopoly, they apparently don't make anyone angry enough to get rid of them. My guess is that they are pretty even-handed across an entire industry and their customers are knowledgeable enough to not screw up a good thing when they see it.
No I think tech just gets obsessive media coverage these days (both from MSM and from influencers.) I know lots of event companies that hate Sysco, it just doesn't get as many clicks as a tech company does.
And long before that Warren Buffet talking about only backing companies who have built a competitive moat.
> Pre-Internet you would see the same dynamics, but usually on a much smaller regional scale.
At least in the US we had national monopolies that took serious regulation to solve. That regulation, strangely enough, is still in place. Perhaps early on there's fear to regulate a nascent industry and by the time regulators realize the problem they're too afraid of the power wielded by the monopolists.
In any case, it's never too late to break up these monopolies. The problem is that the Robber Barons are too far in the past to serve as a lesson for current generations. And some folks might remember AT&T but not understand why it was such a big deal.
Weird timing to see this, as I have come to the same conclusion and was writing a blog post on it. I think we need to start figuring out how to modify our economic system to prevent this, because as you pointed out the tech world is much more “winner takes all” than the physical world, and watching industries consolidate globally under a handful of players is extremely concerning.
All mature markets eventually end up with 3-5 competitors dominating the market. I don't really see this as an issue.
I also disagree that it's a net negative. Technology adds convenience to these markets and as long as the government isn't price-fixing through strict regulations, we also end up with better prices.
We've seen some of the prices increase after the government decided to regulate the hotel markets. They forced many people to stop renting out their places through sites like Airbnb and now the hotels are free to increase prices accordingly.
If it weren't for Uber and Lyft, the Taxi cab unions would have gladly monopolized the industry charging workers $1,000,000+ for a medallion and not keeping up with technology (Taxis were still hailed in person or ordered on the phone before the tech companies decided to compete).
Market consolidation usually leads to higher prices, and it can certainly happen with 3 big players dominating a market. AirBnb is an interesting example. My gut feeling is that the service fees (and cleaning fees, bizarrely) are climbing as they gain market share. Unfortunately I'm finding it extremely difficult to get information about what their service fees were in (say) 2015. Would be interested if anyone else knows a good way to find out.
mature markets end up 3-5 competitors because further mergers end up blocked. capitalism would otherwise allow them to contract to a single player. So I'm sure that's one government control that you'd agree is worthwhile.
And even that blocking doesn't matter much anymore, because the owners of all those 3-5 companies are starting to be the same entities. Because the same people/organizations own all of the companies, they no longer care which one is currently winning and so won't push them to compete against each other as much as they would if the ownership didn't have any overlap. They'll push for policies that allow those players to exist together without stepping on each others toes.
Not at all, you see this pattern in markets that regulators ignore too. It's a human limit. You end up with 3-5 competitors because the incremental value of yet another competitor becomes nearly zero very fast. People have very strict limits on how much information about a specific market they care to remember. To even have 2-3 competitors they have to put a ton of work into differentiation and marketing, otherwise people forget they exist.
Sometimes you do see more, and it's indeed because regulators are stopping mergers. The airline market is like that. But it's a mistake and the regulators should back off. It's not helping people to have a gazillion undifferentiated brands, at some point it's just wasteful duplication.
The idea that every market would contract to a single player if not for the benign wisdom of the regulators is a trope. Regulators are tiny compared to the number of markets that exist, but competitive markets aren't the exception, they're the norm. You see it even in very sticky locked-in markets where regulators deliberately decided not to intervene, like operating systems and browsers (Justice Dept effort to break up MS was cancelled).
I think you have OP's comment the other way around. They were saying that markets will naturally tend to fewer than 3-5 competitors, and only prevented from getting there by antitrust.
I think I addressed both ways around: markets naturally tend to settle on 3-5 competitors, unless blocked by regulations.
There are very few markets that are both natural monopolies and stay that way for long periods of time. Outside of things that tend to be owned by governments anyway, like road networks, I'm having a hard time thinking of any.
You're right, I apologise for not reading your post carefully enough.
Whilst pure monopolies are rare, my impression is that surprisingly many markets consolidate to an oligopoly, and that this reduces competition and is generally pretty bad for the consumer.
Tech has also reached into EVERY aspect/detail of our lives 24/7 to try and extract value from it.
Tech originally preached that it's going to improve/simplify/enrich our lives. Instead tech is farming us like we have never been farmed before while giving us none of the original promise/deal. There is no peace. There is no escape. The improvements in our life are normally marginal and short term. There is no just existing, just constant, continuous farming of you for whatever value can be extracted. And because of how tech scales any extraction is never too small to not be worth going after. At least in the Matrix you weren’t expected to curate your own enslavement and smile and post about it daily.
Yup. I would 100% support aggressive localism here, given that the actual service is very easy to replicate. I'd absolutely support an absurdly high tax on any "out-of-town" food delivery service in order to -- maybe "artificially" -- prop up a local one. There is now NO good reason anyone in California deserves a cent for e.g. a local Florida driver delivering local Florida food to a local Florida customer.
>This is essentially the story of tech companies across nearly every industry where they have come to dominate.
It is the only possible result of consumptive transactional organizations.
Conquest in all forms is accretion and consumption based, until the organization gets to large to sustain a consistent direction, then it collapses and the people get pulled into many smaller companies.
Those companies get accreted into a new superset monopolist/duoploist etc... and the bubble grows again and then explodes.
Wash rinse repeat forever at different abstraction levels.
I’m realizing more and more that it’s rarely technological advances that make any particular company successful and impactful. It’s more often the business acumen.
Were “nerds” with coding skills really ever the best ones to be starting companies? How many successful ones were founded without leadership being handed over to “suits” pretty early on?
You need nerds to build something at a baseline competency that you can sell it, then you need to be the greasiest salesman ever to sell it harder once you've gotten a foothold.
People genuinely do not care about product quality, doubly so in the world of software (see: Crowdstrike is still in business).
It would be interesting to see the success rates of startups based on how early on leadership includes MBAs. Or based on how early on they have people with corporate experience at the top.
Does baseline competency stop being the differentiator after seed? Series A? B?
> the story of tech companies across nearly every industry
I don’t think this is limited to tech companies.
Most industries are controlled by a few companies in those sectors.
Such as Steel, railwood, pharma, grocery, etc.
Surely we're understanding that VCs are playing a stronger game in the software industry.
Cost of goods is lower, overhead is lower in software than in all the items you mentioned and VCs starve out other players by reducing their costs, capturing the market and increasing cost once captured.
What tech companies? These are food delivery brokers that have an app.
Have an app is doing a lot of work there. Uber eats at least is fairly sophisticated back and front end and certainly not a weekend project or something say Domino's Pizza can outsource to a team to get it to that quality.
The problem with this line of thought is that everyone just uses it to hate on people they already hated on. You go after rich tech monopolies, progressives generally go after big business, conservatives use it to go after the biggest business of all, the government.
We all just need to focus on monopoly in all its forms, instead of letting the politicians continue to separate us using division without difference.
Capitalism does facilitate monopolies or industries with razor thin margins like airlines. However, the space of competition is a revolving door with constant opportunity to create something better (that people want) than the established players or to enter a new arena entirely. Ultimately, since consumers are the choosers, it works in their favor. It was the consumers that wanted these companies to exist, and the profits are a proof of that.
However, sometimes there are unpriced externalities like the competitive advantage of removing your own manufacturing waste by dumping it into a stream. That is where governance (whether self or the state) comes in.
it's just the story of companies across industries.
> This is essentially the story of capitalism
FTFY
> Pre-Internet you would see the same dynamics, but usually on a much smaller regional scale
There's been plenty of national and global monopolies (I mean, that's literally why we had Antitrust laws made in the 1890's) as well as industries with only a couple players in a market.
In fact, if you name any industry, it's probably led by just 3-5 corporations. Mobile service? Verizon, T-Mobile, AT&T. Television news? Disney, Paramount, Comcast, Fox, Warner Bros. Liquor? AB InBev, Diageo, Pernod, Suntory, Bacardi. Wine? E&J Gallo, The Wine Group, Constellation. Beer? Ab InBev, Heineken, Snow Breweries. Cars? Toyota, Volkswagen, Hyundai, GM, Ford, Stellantis. Airlines? Delta, American, United, Southwest, Lufthansa. Oil and gas? Aramco, Exxon, Chevron, PetroChina, Shell. Music? Universal, Sony, Warner. Coke, Pepsi, Keurig.
This is what capitalism does. By definition it grows as large as it possibly can, shutting out competitors.
this is essentially the story of capitalism as it always results in monopoly concentration and the development of industry cartels. before tech it was oil, before oil it was rubber and tobbaco.
https://en.wikipedia.org/wiki/State_monopoly_capitalism
Modern capitalist liberal democracies have theoretically strong frameworks and powers for regulating and dismantling cartels though. The real story is that politicians and bureaucrats in government become corrupted by them and fail to act for the good of the people.
And that is the story of humanity, not any particular classification of society and governance.
This is just mega corporatism in general, which was first pioneered by the Nazi Germany. Now it is just exported to US disguising as capitalism.
US is just following the playbook of IG Farben back in Nazi Time.
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And why is a large monopoly a net negative? I read his book and he says that monopolies are 10x better products, and if monopolies are 10x better then why are they bad? Are you arguing that it would be better to keep using 10x worse products, for the sake of there not being any monopolies?
Monopolies are anti-competitive. Without competition there is no incentive for innovation, lowering prices, not price-gouging etc. Is a 10x better product really 10x better if it is also 10x more expensive and there is no alternative?
Depends a lot on what the monopoly in question is.
1. How much room for innovation is there?
2. How hard is it to substitute the good / service provided by the monopoly?
In the case of food delivery apps there isn't much room for service improvement. A monopoly here probably isn't preventing much innovation. How much better can you get at delivering food from a restaurant?
And there is an easy substitute in terms of driving to the restaurant yourself, so if the monopoly tries to jack up prices too much they will steadily lose customers. The prices now are so high that they have already lost me. I use those apps < 5 times a year.
Not innovating, maintaining high prices, and price-gouging are unstable activities for a monopoly, as in it would open up a void for effective competition. The real anti-competitive actions is that it becomes cost effective to do regulatory capture / pay bribes to politicians. A monopoly can pay to play in a way that fledging competitors cannot. Once the industry has been captured then they can do rent seeking behaviors without worrying about competition.
If allowed, an incumbent monopoly will do the minimum innovation or tactical pricing necessary to keep out competitors - even if it means they suffer a temporary loss.
This can effectively create a barrier to entry high enough that no small company has a chance to beat them. Since insolvency before overcoming the barrier is foreseeable, no one even tries, and the monopoly gets to keep high prices (compared to a competitive market if they weren't there).
How many desktop OSes can you choose from walking into BestBuy? And this is decades after MS was convicted of being a monopoly and illegally paying computer manufacturers money to keep competitors off.
> Not innovating, maintaining high prices, and price-gouging are unstable activities for a monopoly
Depends how good their moat is. Or how deep their pockets are, because they can often bribe to keep their competitors out (Intel vs AMD). Or just buy their competitor outright.
The article refutes this even in its URL - markets are not efficient.
Five companies in an industry isn't a monopoly. That's very competitive actually.
How? Do these 5 companies even operate in the same places? Around here we have DoorDash, Uber Eats, and that’s pretty much it. We have SkipTheDishes, which was present before the other two outside urban areas, but I don’t even bother talking about them, most restaurants in the area have switched away from them. The other alternatives just never existed outside highly urban areas or have simply been pushed out by the bigger players. Where are the effects of this highly competitive market, exactly?
Without more context this is silly to say. It isn’t as if we know the natural or correct construction of this market a priori and that 5 is clearly a distortion from that. Consolidation can sound bad in the abstract but in this relatively immature market you could still expect major shifts to get to a steady state. Just a little bit ago people were remarking on VC-subsidized delivery; as that goes away, consolidation is not unreasonable.
Edit: ‘this’ in the original parent comment was along the lines of ‘five out of potential thousands of actors’
There might be some more specialized ones. I know there's a few more here that only work with Chinese restaurants and mainly advertise in Chinese.
Depends on the geographic distribution of the companies. Meituan is huge, but they don't do shit in Europe or the US.
There are probably areas where these companies operate as effective monopolies or two-company oligopolies.
Split the world us/china/other and ignore minor players and there are 1/3/1.
In a given are there is competition but the local competition is likely to be pushed out by Uber Eats who could undercut them out of business for a while. Or just have better tech / customer experience due to scale (looking at you Menulog)
It’s more of a cartel if anything. Each owns a certain geography
Large and dominant companies can be a net good, at least in theory. In practice they become corrupted because of incentives to maximize profit by any means possible, with few who can oppose them.
When well regulated one can have most of the benefits without many of the downsides. Sadly, even the regulators become captured.
A monopoly could be 10 times as good, but what is their incentive to be 10 times as good?
We have to distinguish between monopolies that keep their status by being great versus monopolies that have something else going on.
Google (search) is an example of the former. Search is a very expensive business to be in, but most of the costs are in scraping, indexing and software development, not actual query execution. The more users you have, the more you can spend while still keeping margins constant, and the more you spend, the better your engine is, which gives you more users.
This leads to the situation where you only have two competing search engines[1], one of which sucks and only exists because it's propped up by Microsoft. However, this is only true as long as Google keeps their quality up. If Bing suddenly became significantly better than Google, people would gradually start switching.
20th century AT&T is an example of the latter phenomenon. It was a monopoly because of US regulations, which made the barriers to entry insanely high. This meant AT&T could set almost whatever prices they wanted, as consumers didn't have a choice anyway.
[1] Engines like Kagi or DDG don't count, as they still fundamentally rely on Google's or Bing's indexes.
> monopolies that keep their status by being great
What I am asking is what incentive those monopolies have to continue being great. Even if Google did not use Chrome to steer people to Google Search, Google Search is an established habit for most people, and it would have to become significantly worse than any competitor in order for people to consider switching.
You pointing out that a competitor to Google can only exist because Microsoft is pumping huge amounts of money into it, is not the great argument you seem to think it is. If Microsoft does not have a good chance of making money with Bing, what chances does a startup search company have?
How can a company make delivery 10x better?
The expected result of a monopoly are rising prices and at best indifferent service and quality.
> How can a company make delivery 10x better?
By improving the consumer experience. Better optimizations of which couriers go where and by what routes, faster delivery times (and hence warmer food), menus and restaurant directories optimized to show you what you actually want, better delivery time estimation, no need to talk to a human or re-enter your details for each new restaurant, that sort of thing.
At Uber scale, you have people working on improving metrics, and those improvements translate across all the restaurants that exist across the world. "John's Chicken" won't hire their own guys to do A/B testing on which pictures of their food generate more sales.
Man who believes monopolies are good says they are 10x better? Color me shocked…
he didn't produce any proof of that statement and I figure neither can you. so let's assume this as false, shall we?
we see lot's of examples of how monopolies (or similar) tend to do rent extraction. that's why we're talking about enshittification so much. it's because they only care about profit (and on a small time frame as well), not the product, not the customers, nor the planet.
How do you become a monopoly without a superior product?
be the first, buy competitors, lobby for regulatory capture, dominate the resource (see rockefeller/standard oil: https://www.investopedia.com/articles/investing/071515/how-w...)
Big business is the engine that drives the economy. Small businesses are the future big businesses. Economies where big business is discouraged don't do very well. Small business doesn't have economy of scale, nor can it raise the capital to do big projects.
> extreme concentration of wealth
Big business does not concentrate wealth. What you're seeing is the creation of wealth. This created wealth then flows out into the rest of the economy, via paying the workers and buying plant&equipment, etc.
> Big business does not concentrate wealth.
They absolutely do. If for no other reason than each of their revenue goes to fewer entities.
> What you're seeing is the creation of wealth. This created wealth then flows out into the rest of the economy, via paying the workers and buying plant&equipment, etc.
This is the flawed reasoning behind "trickle-down economics"[0], which was called "horse and sparrow" in the 19th century. It didn't work in the 19th century when labelled as the latter nor in the 20th when reframed as the former.
Any company which has earnings beyond those of operating costs is a concentration of wealth by definition. Whether that wealth is distributed to shareholders, kept as retained earnings, or otherwise transferred to specific entities is irrelevant.
0 - https://en.wikipedia.org/wiki/Trickle-down_economics
> Any company which has earnings beyond those of operating costs is a concentration of wealth by definition
Let's say I buy $20 worth of art supplies, and I paint a landscape and sign it with my moniker, "bright". Since "bright" paintings are very rare and go for a million bucks each, I now have created a million bucks of value. Who did I transfer the wealth from? Nobody. I took nuttin from nobody. Yet I have become wealthy.
Let's say I sell it to you for a million bucks. Did I take your wealth? Nope. I traded a million dollar painting for a million bucks. You are exactly as wealthy as you were before.
Now, if you decide to use my painting as compost (sob!), you are dissipating the million dollar value. That's not me concentrating wealth, it's you destroying your wealth.
If you stole the painting from me, then you concentrated wealth. But we're not talking about theft here.
Your art supplies and time didn't create wealth in the economic sense ("the annual produce and labour of the nation" as Smith defines it, <https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book_II...>), but a financial asset, in the form of a (presumably) uniquely identifiable durable store of financial value.
This is contrasted with economic wealth in which some inputs (capital, labour, raw materials (themselves generally considered as capital) are transformed into some immediately useful consumable product (say, food or fuel), a durable good (clothing, furniture), a service ("immediately extinguished" in the terms of some economists, but still having potential lasting positive value), or capital which can itself be used in future economic activities (machining equipment used in the manufacture of widebody aircraft, or the aircraft themselves).
All else equal ("ceteris paribus"), the result of creating a novel but valued painting would be the same as that of inflating any other durable store of value: the relative prices of competing assets would fall proportionate to the price of the artwork. Ordinarily the drop is small and the bucket large such that this isn't noticed, but it is the net effect.
David Ricardo is amongst the first economists to deal with the economics of collectibles and durable assets of which I'm aware, e.g.,
Ricardo’s value theory applies only to those commodities that ‘can be increased in quantity by the exertion of human industry, and on the production of which competition operates without restraint’; it is thus not applicable to ‘rare statues and pictures, scarce books and coins, wines of a peculiar quality [...]’ (Works, I, 12)
From The Anthem Companion to David Ricardo, Edited by John E. King, p. 169.
<https://www.cambridge.org/core/books/abs/anthem-companion-to...>
>> Any company which has earnings beyond those of operating costs is a concentration of wealth by definition.
For context, here is the second sentence related to the above:
I believe this relevant to the below.> Let's say I buy $20 worth of art supplies, and I paint a landscape and sign it with my moniker, "bright". Since "bright" paintings are very rare and go for a million bucks each, I now have created a million bucks of value. Who did I transfer the wealth from? Nobody. I took nuttin from nobody. Yet I have become wealthy.
This scenario is not relevant to "big business", but instead describes a sole proprietorship with an assumption of a known fungible value. It also does not account for consumable goods and/or transient services. In any event, by your own definition below:
> Let's say I sell it to you for a million bucks. Did I take your wealth? Nope. I traded a million dollar painting for a million bucks. You are exactly as wealthy as you were before.
Either you have not "become wealthy", as you "traded a million dollar painting for a million bucks" or the effectual value of money exceeds the purchase value of the "million dollar painting". Both cannot be true.
Back to my statement of corporate earnings beyond operational costs being a concentration of wealth. I believe we can agree on the following:
- Any for-profit company has as its purpose the goal of accounts receivable (AR) exceeding accounts payable (AP) over time.
- There are a limited number of recipients regarding profit distribution for any given company.
- Those having no direct or indirect ownership of a given company do not receive profit distributions.
If we agree on the above, then the larger the profits, the larger the distributions. Since the set of people qualifying for profit distributions are less than the set of all people having no investment relation to the company, it follows that said profits are enjoyed by fewer entities than those strictly involved in the AR side of the ledger.
Hence a concentration of wealth into the organization.
> Either you have not "become wealthy", as you "traded a million dollar painting for a million bucks" or the effectual value of money exceeds the purchase value of the "million dollar painting". Both cannot be true.
I became wealthy by creating wealth, not concentrating it. Concentrating it requires it be taken from somewhere else. There is no taking going on, there is creation and exchange.
>> Either you have not "become wealthy", as you "traded a million dollar painting for a million bucks" or the effectual value of money exceeds the purchase value of the "million dollar painting". Both cannot be true.
> I became wealthy by creating wealth, not concentrating it. Concentrating it requires it be taken from somewhere else. There is no taking going on, there is creation and exchange.
The scenario you have described is logically consistent while being representative of a tiny subset of commerce. Revisiting the original use-case:
Assuming all of the above, this business model does not account for at least the following:A - Businesses having more than one employee.
B - Asset deprecation, such as when purchasing a new automobile.
C - Consumable goods, such as food, petrol, etc.
D - Services such as commercial/residential rent and physical security.
E - Taxes.
F - Stock dividends and/or performance bonuses.
A and E involve direct wealth transfer from the business to relevant parties.
B is a second order effect only realized when the buyer attempts to sell the asset to a third party.
C and D are direct wealth transfers as the seller retains the remuneration for as long as they desire (excluding applicable cases identified above) and the buyer eventually does not have a physical equivalent. Note that this often remains a valuable exchange for both parties.
F is where wealth concentration commonly resides.
How big is big? There are big businesses such as Ford and then there are big businesses like Nvidia or Amazon.
We should encourage more Fords and fewer Amazons.
I think the truth is restaurant food delivery is a luxgury good, literally “private taxi for your burrito” yet many people spend like it isnt.
Seeing how many Gen Z people use food delivery services on a weekly or even daily basis was mind blowing to me. I’ve had numerous conversations where I’ve had to bite my tongue when younger colleagues complained about finances after also explaining that they DoorDash dinner nearly every night. It’s bizarre.
Not all Gen Z, of course. Most of the younger people I’ve worked with have been generally smart about finances. It’s a subset who fall into the normalization of luxury services as a standard cost.
I was born in the 80s in the UK. When I was a teenager, my family had a takeaway meal delivered every Wednesday night. My dad would ring up the restaurant, tell them the order and our address, and pay the driver when they arrived. It cost us exactly what it would cost someone going to the restaurant, plus a small 5-10% tip to the delivery driver. Most places had a delivery fee only if you live outside a certain radius or your order was under £20 or something. This was very typical for families at the time, and restaurants would directly hire delivery drivers.
The problem here is not the concept of food delivery, which has been widespread for decades and used to be very cheap. It was not always a luxury service. The problem is that tech companies have become an established middle-man platform and are driving up the prices for a small amount of added convenience. And it's often a net-negative in my experience, having now sworn off Just Eat after some horrendous experiences and negligible customer service.
I really don't think that frequency was 'normal' in the UK at all. I'm a similar age and we had a takeaway maybe once a month (usually fish and chips, occasionally a curry or chinese). Meals out were a bit rarer, usually a pub but occasionally McDonalds. For the generation above mine, my grandparents on both side basically never ate takeaways unless it was fish and chips on holiday - culturally it just wasn't a thing. I just asked my wife who was much wealthier growing up than I was and she similarly reckoned she didn't eat out much / have takeaways often.
Looking at economic stats, spending on food and drink outside of the home grew enormously between 1992 and 2004 to overtake spending on food within the home: https://onlinelibrary.wiley.com/doi/full/10.1111/j.1467-3010...
Thanks for relating your experience. Wow is it hard to get any concrete figures on questions like "how many takeaways did an average household get per week in 2004". Also pretty tricky to chase down the references from the article you linked.
I found an archived copy of ref ONS2006d "Social trends No.36" here - https://webarchive.nationalarchives.gov.uk/ukgwa/20151014074...
Table 6.2 (p90) says household expenditure on restaurants and hotels went from £167b to $202b between 1991 and 2004.
Table 6.6 (p93) says that households spent an average of £11.60 per week on restaurants and cafes. Not clear if that includes takeaways.
There's an Independent article from 2006 which talks about the study, still not much about takeaways but some interesting nostalgia about the rise of gastropubs: https://www.independent.co.uk/news/business/news/britain-spe...
Mumsnet (to the rescue!) with a thread about takeaway frequencies from kids born 60s-80s. A lot of variation from "only on my birthday" to "every Saturday night": https://www.mumsnet.com/talk/_chat/5031860-did-you-have-many...
I've no doubt that my own childhood was atypical in many respects. Relatively well off, only two kids, dad was a first generation immigrant so perhaps had fewer financial and cultural constraints. When I was a teenager at home from 2000-2006 the data suggests that spending on takeaways and eating out had been surging up to that point.
Either way I will always fondly remember having a donner kebab on a Wednesday evening, sat in the kitchen watching Star Trek Enterprise on the telly on its spinning turntable.
I agree with you about grandparents though. I think the closest mine would ever have gotten was a microwave meal.
Even the subtitle of this article basically enforces that fact:
> Why is my $8 burger $23 after fees - An average reddit user
As you say, it's a private taxi for your burrito. When you factor in the labor costs, gas/car maint costs, and the amortized cost of providing the service, it's hard to see why anyone would think $15 for an on-demand delivery in a major urban area is abnormal.
Here’s something WiLd and crazy — “in town” or “in range” delivery used to be free in major urban areas, and you’d tip the delivery driver $2-5.
We had a variant of that for pizza in Sweden around 2000-2010: Free delivery from an online order and no tips expected.
Literally the same price for the pizza for in store take away or home delivery.
Always wondered if that was tax or immigration fraud (pay-to-work schemes). Or both.
Most pizza restaurants are built around the delivery cost-structure. They locate off main streets, they have a small front-of-house relative to kitchen size, and they have relatively low ingredients costs. They save money on both real estate and taxes, and use those savings to pay for drivers who deliver multiple orders per trip.
Other restaurants just aren’t optimized for the delivery business, so it’s more expensive per serving for the customer (no matter who is doing the delivery).
Food delivery in a car seems to be a purely American aberration. Literally everyone else uses more efficient methods. (E-bikes or whatever.)
I agree with your sentiment and was also astonished about spending on delivery.
However, I don’t think food delivery is the reason they’re complaining about finances - it’s more likely it’s that every generation above them has been able to buy housing and they cannot.
No amount of penny pinching on everyday spending is going to close a doubling [1] in the cost of buying a house for Gen Z vs _Millennials_ (never mind boomers!). It’s incredibly unfair and Gen Z are absolutely right to complain and be angry about it.
[1] https://www.independent.co.uk/news/uk/home-news/gen-z-mortga...
My coworkers stepson is the same, door dash every day then complains he has no money. Even after having finance explained to him he still doesn't get it.
I think this partly explains gen z's constant complaint of not being able to afford a house. Most people didn't used to pay for TV (there's this invisible signal going over the air!) and now everyone pays for Netflix. People did pay for premade food (TV dinners, canned food, etc) but now they're paying for a restaurant-level expense one or multiple times a day. They're purchasing equipment in online games, subscribing to a million online services, constantly buying junk from peddlers like Temu, Amazon, etc. $100 home internet, $70 mobile phone service, $1000 phones? They're throwing their money away. And while they technically could stop, I'd argue that we have all been programmed to do this, to the point most people probably are unable to stop. Consumerism is addictive. I'll bet in the future your paycheck comes pre-deducted with all your subscriptions "to help you afford food and housing", and it'll be provided by Stripe.
It didn't used to be. I delivered pizza in the early 2000s, and the fee was $1 and tip, which was usually $2-3. It was pretty normal people ordering the stuff.
And the funny thing is I made about $20 an hour (unadjusted for inflation, ~4 deliveries per hour + $5 an hour). Today the drivers still around that amount, the restaurants pay more and the companies operating are often operating at a loss.
Something very strange happened in the last 20 years.
What happened is the gig economy inserted a middleman (DoorDash, Uber Eats, etc.) between the restaurant and customer. These platforms take a 20–30% cut, charge customer fees, and still often lose money.
Meanwhile, drivers—now independent contractors—get no hourly wage, no benefits, and absorb all costs (gas, car, downtime). Tech didn’t increase efficiency for workers—it added a VC-funded layer that extracts value.
So despite more demand and better tools, drivers earn the same (or less) in nominal terms, and much less after inflation.
They removed friction by centralizing all restaurants so you can choose from one place, standardizing the experience no matter the food source, making selection simple and payment/refund easy.
The human brain is wired to go the way of the least resistance short term, no matter the cost long term, so customers pay a lot for that.
I have many pizza places that tell me they still deliver themselves for cheaper: almost nobody takes the option, they use the giant company app.
Something strange happened to someone somewhere but it hasn't happened to me.
I ordered Indian food from one of my favorite local establishments. I was home alone so I wanted it delivered. I called the restaurant and placed my order. The owner showed up 20 minutes later in his Mercedes to drop off my delivery.
Some restaurant owners know that they can buy themselves nice things and still provide excellent customer service if they don't give all their profits to a delivery service.
Not really hard to understand when a VC backed company needs to show returns to their investors.
Restaurants get less than 50% of the order total. The only parties winning from this shift are the delivery companies.
> Something very strange happened in the last 20 years.
Tech companies discovered that the most profitable position to be in was global middleman, at a scale previously impossible before everything was connected by the internet. They undercut a given market until all the alternatives become financially non-viable and then start hoovering up all the margins from both sides (producer and consumer) of the deal.
Restaurant delivery... I tend to agree.
'nonperishable food' or 'properly packed short travel' (i.e. dairy/frozen) IMO is a fairer niche of 'could be non-luxury with better societal outcomes', except for the 'as close to JIT as possible'. There's ways to optimize the process to where something on the scale of 10-20 homes could get their main groceries delivered two or 3 times a week and the overall cost would be lower than all of them doing so. Yeah you'd need a reefer van or an otherwise replenishable source of cold for dairy/frozen but at that scale the cost of such makes a lot more sense. Biggest problem is getting the right buy-in and mindset from consumers.
I totally agree in theory, in the same way I agree that Amazon delivering everything from a nearby warehouse is far more optimal than having thousands of small bookshops or random shops in prime locations.
I think that's the main vision behind Travis Kalanick's CloudKitchens since he left Uber. You could order food prep for your week from a choice of menus, and the food would be prepared in an industrial kitchen for you and thousands of other people around you. It's basically restaurant-quality food that you can eat at home and isn't frozen.
Unfortunately for the meal prep market, I believe the break-even point for scale is much more difficult to achieve. Food is like hardware but with a much shorter end-of-life. You would need consistency in ordering to avoid excess spoilage and to operate at scale within small geographical pockets to make the delivery worthwhile. I really believe this could work with the right demographics and in the right geography, it's just much harder than simply delivering takeaways.
Difference is you can stock large quantity of frozen foods any time it is convenient to shop. As in, frozen food delivery is not all that useful.
When you work from home and cant cook, delivery can happen right now. Or if you are having a small gathering with friends, delivery makes your life easier exactly when you need it.
I thought the headline was implying something else. When I read the article, I thought, “Is it a monopoly to worry about if you can just do it yourself?” Feels like complaining there is a monopoly on services to pour you a glass of water from the tap.
I make good IT money with few expenses and thus have a lot of disposable income but I feel that restaurants are really terrible value for money and thus rarely go to them. Add the extra cost of getting restaurant food delivered right to your house and it just becomes a stupid waste of money.
Also if it's really an issue for restaurants they can do delivery the way pizza/Chinese restaurants used to do without having to deal with any third parties.
Of all the things to worry about this is probably the least important.
It's a bigger issue for consumers who are willing to pay $39 for a $24 dinner.
It wasn’t priced in for the first 5-10 years. There’s no way I would use an app like that (I even work for one) these days now that the VC subsidy is gone and the service costs 5x as much as a few years ago
no it is not. meituan in china is very very cheap.
Is it customary to tip the delivery person? This always increases the actual cost.
The title scared me a bit before I opened the article and realized it was talking about restaurant->consumer food delivery services. While that isn't great, I was initially thinking was that the companies that facilitate the food delivery supply chains around the world were massively consolidated (I sure hope they aren't)
I'm pretty sure the food supply sources are massively consolidated. I don't know about the delivery part or why that would matter more than the actual food production.
A quick search will lead to quotes like "Four companies now control more than half of the market in chicken processing (Tyson, JBS, Perdue, and Sanderson), close to 70 percent in pork (Smithfield, JBS, Tyson, and Hormel), and nearly three quarters in beef (JBS, Tyson, Cargill, and National Beef)"
I've worked in the industry for over a decade and food distributors can squeeze the manufacturers more than the other way around. That's a very silly statement if you read it with any knowledge of the space.
I certainly don't know anything about the space, but by "matters more", I was thinking about caring more about what I am eating as opposed to how it was distributed. I suppose both are important, though.
The fact is literally no one in this space cares what you're eating. They just want to make money. Doesn't matter what side of it they're on.
Then there is the whole industry of facilities management and food service at places like stadiums and airports. Also run by a few big players.
Margins on food staples like Chicken are very low, which suggests that consolidation is inevitable.
Supermarket margins are also very low.
I built one of the trade promotion management (TPM) tools used in that space and had to deal with these companies daily for the last decade.
There are absolutely a bunch of acquisitions/ consolidation in that food distribution space, but there are still hundreds of different distributors just in the US. However, most volume does flow through the largest distributors.
For example, I had to build a specific feature to merge distributors after an acquisition happens in the industry, to make the product work properly because that's such a common occurrence. Had the same type of feature for manufacturers (my customers) also, because they kept buying each other.
Thanks for your response! I love this forum for how many experts chime in in the comments section
The food service industry certainly has some major global players too. Names like Bidfood, Sysco, PFG, etc. In some cases, these same companies cater/supply everything from prison, school, and hospital kitchens through to fancy airline lounges and high-end restaurants!
> Bidfood
Wow - I didn't realise bidfood.co.nz was a US chain bidfood.com (Bidcorp).
Food markets keep closing down.
The consolidation of restaurant suppliers really affects the quality of taste a restaurant can get. My ex was a cook and the worse restaurants wouldn't even make their own sauces like Hollandaise - she would tell me what brand it was (often a restaurant supplier brand). It is noticeable when the chef has hand-selected their supplies e.g. tomatoes that have flavour.
The root cause is that consumers tend to optimise for cost.
Quality is harder to give a number to.
We're not completely screwed yet - with time/effort (and moderate means) you can find some amazing places at normal prices.
And there are people willing-enough to spend time/effort plus wealthy-enough but that market is much smaller (more exclusive). And unfortunately there are a lot of expensive places that don't optimise for food quality (because people desire other things for their money e.g. obsequiousness, rent-a-vibe cuisine, gastroflex, mealfluencing, yadayada). Aside: Roget's gets spanked by AI when looking for modern words.
> "Wow - I didn't realise bidfood.co.nz was a US chain bidfood.com (Bidcorp)."
It's actually a South African/UK headquartered group, I believe. But operates in many countries around the world.
As somebody that built a TPM product for the industry, I hate prison and school bids. It's so fucking dystopian.
Can you tell us more?
It's lowest bidder, shit tier quality food that is usually a different SKU than they sell retail / food service (because people wouldn't buy it for themselves).
The people making the decision to buy this slop aren't the ones who have to eat it.
restaurant food distribution is event more consolidated. For example in the Midwest there is really only 1-2 companies you can get your seafood from. It has its pros and cons. Source: I work in restaurants and I also supply these distributors
The food industry is due for a good old opensource disruption, where each restaurant can setup their private menu hub (like you would an instagram account), add their payment processing details, and start delivering their own orders. It's a win-win for the restaurant and their recurring customers.
Worked years ago at a restaurant that had its own website and app ordering...
Ubereats and the like still dominated the orders even with the 15% upcharge and even after notifying repeat customers that they can save money ordering direct
The convenience of having one centralized app with one account that can summon any food from any restaurant in a 10 mile area is just way too strong.
Plus the fact that you only have to give your credit card details to one large company that (hopefully) has some security professionals working for it, rather than dozens of smaller ones and hoping that none of them lose it/get compromised.
I know I sound like a broken record at this point, but Privacy.com cards for everything to minimize the blast radius
Consider supporting lower friction payment types like apple pay/google pay or any other which the customer is likely to be already using and don't need to enter their billing details to yet another random website. Maybe you already do.
Yeah I sometimes go to the restaurants own website but to be honest I'm often too lazy.
But I only order food once or twice a month- it's a little indulgence for me.
The target audience for consolidated food delivery apps isn’t the person who wants to manage the fine details of ordering from 10-20 different local restaurants.
The majority of people using these apps just want to scroll some restaurants and order something quickly. Saving 10% by going through extra steps, installing extra apps, going to a company’s website, and doing custom orders isn’t what most of their repeat customers want to do.
It’s a convenience thing.
Most consumer are just like that.
I'm the one who don't bother ordering directly to get better value, but I started noticing less and less restaurants (that I order from) having this option anymore.
They probably saw too little people using it and stopped accepting, sadly.
Having dedicated delivery drivers stops making sense after a while
One benefit of these apps is companies which would never have had a driver now can be ordered, but the cost is all the businesses who did no longer do.
And it’s going to be a hard sell for a small business owner to pay for not employees that are in low demand by the consumer vs the zero fixed cost apps that manage that for you.
Stuff like this already exists (AFAIK not open source but cheap enough that restaurants would prefer to use it if they could). The problem is modifying user behaviour: people used to go directly to the restaurant to order food but are now very used to opening the food delivery app, browsing it, and ordering.
You could have the slickest ordering experience in the world and it won’t help you if no one sees it.s
This.
These certainly exist. My local favourite Thai restaurant has its own ordering website and has its own staff deliver the order, with no markup over the in-restaurant menu prices.
The company that operates their ordering platform is mobihq.com (I have no affiliation with them)
What about users? Will they install one app for each restaurant they order from on their phone or will they prefer to do everything in the same app?
There are middle man services for certain types of food in certain areas.
For example Slice is a popular one for pizza. I know a business owner who uses it.
They have an app and optionally an online menu on your custom domain to take online orders and physical hardware for taking orders in your store. Think POS system, register, terminal, printers, etc..
For a business owner that covers you for accepting online and offline orders, and you can deliver direct to your customers.
95% of his online delivery orders go through this system because DoorDash charges him (the business owner) 30% for each order so he raised his prices there to partially offset that. Slice on the other hand is 5% cheaper than his baseline price for online orders for customers so it's a no brainer most use that. With that said, way more people call in or come in person than using the app. Probably a 90% / 10% split.
There's no need for apps to make online orders.
It's crazy to think, but I think we're quickly reaching an inflection point where the generation of on demand multi-sided marketplaces that gained steam in the 2010s is ready to be disrupted itself.
Some locations in India are experimenting with https://ondc.org/ which is similar to this kind of model.
Similar to how JustEats works. Or at least used to. The restaurants have their own driver, and create their own menu. Though I think the cut from JustEats is still quite high.
If there are 5 companies, doesn’t that count as “competition”?
If not, how many companies does there have to be to have “competition”?
If there were only 1 or 2 companies, that would seem much more of a problem.
Great question! And a great example of why the central question in any antitrust issue is defining the market.
Define it narrowly enough, and Firm A buying Firm B might create a monopoly - the regulator cannot approve that.
Define it broadly, and Firm A buying Firm B takes the market from 21 firms to 20 - the regulator is unlikely to stand in the way.
(In practice the market definition question in the US will often happen in front of a judge and the two sides are the merging parties vs. the regulator (FTC or DOJ).)
In this case, is the relevant market “restaurant delivery service via an app” ?
In that case five firms is (likely) moderately concentrated at last. (If you have the market shares of the five firms, you can compute an index called the HHI to get a rough sense of how much more concentrated the market will be before and after a merger.)
However… “app based food delivery” doesn’t seem like a credible market to me. The firms are unlikely to have pricing power either over restaurants or customers.
Candidate competing markets:
- going to the restaurant directly
- making food at home
- delivery provided by the restaurant
Any one of the five firms currently in the market who wanted to buy another would argue to include all three as the “relevant market” in which case their share (both before and after) is tiny.
The regulator will argue for a narrower definition.
When you see commentary on this website about “X is a monopolist” or strong claims like that (which are made frequently!), almost never is there any appeal to a market definition!
Fortunately judges get better input than HN commentators.
But there are only 1 or 2 companies in any particular market. I'm in the US, where DoorDash and Uber Eats dominate. I've never even heard of the other 3 (Meituan, Prosus, Delivery Hero) which dominate in other regions.
5 companies in a city is probably great, but this is 5 companies globally.
Where I live there's only 2 companies really, and I'm guessing in almost every market it'll be 1 to 3.
This post doesn't appear to present any evidence that five companies control any significant share of the food delivery market. It looks at transaction volume of major deliverers, comparing them to each other.
But it's not at all clear that major deliverers are even a majority of the delivery market. There are no pizza chains on the list. There are certainly no individual restaurants on the list.
> Why is my $8 burger $23 after fees - An average reddit user
Delivery in China (through Alipay, which may or may not be backed by Meituan) is generally cheaper after fees than it would be if you just went and bought the food in person. This might explain why Meituan has so much more transaction value than Doordash and Uber Eats. But it's not something I'd imagine drives a lot of user complaints.
Isn't it funny? Lina Khan and the US government in general blocked all kinds of tech acquisition and merger to the point that companies got creative and as a result many Windsurf employees got screwed. On the other hand, it's totally normal that a handful companies control our food supply chain. And it's totally normal for the federal government to spend $2.5B to revamp a 4/5-story HQ. In contrast, China built Hangzhou Bay Bridge of 36 kilometers for less than $2B. The U.S is starting to feel more and more like the late Western Roman Empire — tangled in the competing interests of entrenched factions, with real reform no longer possible
> Lina Khan and the US government in general blocked all kinds of tech acquisition and merger to the point that companies got creative and as a result many Windsurf employees got screwed. On the other hand, it's totally normal that a handful companies control our food supply chain.
Lina Khan's FTC also successfully sued to block the Kroger-Albertsons merger...
Two companies now control 90% of the phone market. I think the restaurant food delivery market is quite healthy.
Do you mean the App Stores rather than the phone market? That is soon to be 3, as Harmony OS takes hold in China and other markets.
I thought Harmony was a banned word in China. It's what the government called its own totalitarianism, then it's what the people called the government's totalitarianism, then the government banned it because they don't want people to talk about the totalitarianism.
I see these types of stats often, x number of companies now control over x% of x. On the face of it, what's the issue?
Food delivery starts out as this awesome new tech that allows delivery and its prices are cheap for early adoption, lots of small players come to the market to try and ride the hype. The service grows in popularity and becomes steady state, companies start to look to drive further profit, companies consolidate where possible to avoid shutting down altogether. Global markets impact fuel prices, food costs and sees the delivery services grow further in price for all those across the supply chain.
How we have a number of steady state food delivery companies that have the capital, and/or subsidy capacity to run across different markets globally.
Also fun fact, Deliveroo doesn't operate in Australia and had to close due to high costs. Australian Government has been looking to increase rights of gig-economy workers, a cost that smaller player wouldn't be able to handle.
Meanwhile I have seen a lot of local restaurants advertising how ordering through their own delivery/pickup service can be 30% less than Uber Eats or DoorDash on their takeout boxes (and consequently in your uber/doordash order). It’s interesting that some of the POS companies are getting into the market: https://www.toasttab.com/local
There’s huge room for disruption in this model when a $12 chipotle order costs the consumer $30 after higher menu prices + delivery fees + tip.
When I worked at a restaurant that did Ubereats/door dash/GrubHub, we had a 15% upcharge on order through those platforms.
We would tell repeat customers they could use our website/app/phone to order directly and save the 15%. Almost no one converted. Convenience really is king.
So what this POS company is doing that’s kind of interesting is they have a mobile app just like Uber Eats/Doordash but it seems to be direct through the restaurant: https://apps.apple.com/us/app/local-by-toast/id1362180579
Actually when I ordered through it I paid $45 instead of $60 via DoorDash/Uber Eats but the order was delivered by Uber.
The reason why I think this version will work is because it’s the same level of convenience in a centralized mobile app so single payment method, single portal to browse restaurants etc.
(I have no association with this company I just was looking into this last week on the train)
Win-win then, since you made the upcharge.
I would care a lot more if this market had even existed as recently as 15 years ago, but most of what this article is making a case for is that the next 5 years in this space are almost completely unpredictable.
And the alternative to restaurant delivery service is really the way we get the other 98% of our food. Anything I can ignore without being at some sort of disadvantage I don’t really get worked up about consolidation.
I wish we had more than 3 cell phone networks, this could all be one and I’ll just drive to the restaurant.
There was a discourse prior to the last election about how cost of living was out of control based on people sharing delivery bills from their "burrito taxi". I do get that this article isn't "about" that discourse, it's about an investment thesis, but my real point is just: there is no reason to believe any part of this market has settled to the point where you could make reliable predictions. Everything is very new.
Yeah I remember Jeff Bezos saying something very much like that at the launch of the kindle phone. Something like “smart phones have only been around for seven years there’s no reason to think the two platforms in the lead now will always be the only two.”
Sometimes a market has already ossified five years in. I guess we’ll see.
I don't understand, are you saying the market was so small that it might as well not have existed? I don't have the impression that it's gotten magnitudes bigger here in Germany, maybe in China it did (what hasn't), in the US...? People just use the web instead of using a phone. AT&T didn't charge a commission.
Realistically in the US before the various online delivery companies figured out how to make it work, most places just didn't do delivery at all. Traditionally pizza places and Chinese food were something you could order delivered. Almost everything else was either drive through or take-out.
What is sort of crazy is that these delivery services didn't even supplant pizza delivery. All the major chain pizza delivery places and most of the local spots all still run their own delivery service long into this app era.
It kind of makes sense. App delivery is notorious for being pretty terrible service quality and having the food end up worse with more time spent between kitchen and you eating it. Pizza delivery on the other hand has been seen as quick with drivers interested in earning their tip, pizza places being conservative with delivery radius to not overextend their drivers, etc. Customers don't like getting an inferior product or service one day.
> App delivery is notorious for being pretty terrible service quality and having the food end up worse with more time spent between kitchen and you eating it. Pizza delivery on the other hand has been seen as quick with drivers interested in earning their tip, pizza places being conservative with delivery radius to not overextend their drivers, etc. Customers don't like getting an inferior product or service one day.
Additionally, at least in my experience it's pretty easy to get to where just paying the delivery fee of a pizza place is cheaper than paying for inflated per-item rates.
>are you saying the market was so small that it might as well not have existed?
They're saying that the space these companies are competing in literally did not exist. It didn't in the US, maybe not 15 years ago, but 20 years ago it was nonexistent.
Waiters on Wheels was founded in 1987 and had cornered the market. But they really only did large orders as far as I'm aware; used more for a corporate lunch than a dinner for two at home.
B2B and B2C are so different from each other they are essentially entirely different market segments, even if they are providing roughly equivalent services.
> As long as food delivery is better than other ways of consuming food, like cooking, takeaways, or dining out, it will be able to keep customers in the network.
Made me laugh out loud. It's strictly the worst option. Only use it if my job wants to pay, or if very sick.
Cold food. Unpredictable delivery times. More expensive than eating out. Usually less nutritious than cooking yourself. And of course expensive as hell.
Less competition would certainly be bad for consumers and drivers. But has that actually happened here?
Doordash and Deliveroo do not operate in the same markets, so their merger would not reduce competition in any given market.
Prosus is a big conglomerate with its fingers in many different industries. But unless it starts buying multiple delivery companies that operate in the same markets, its acquisition of Just Eat also doesn’t appear to be reducing competition.
I think tech companies that are in sectors like this with a great deal of money moving around a few different entities tend to inadvertently operate as de facto cartels in a lot of ways. They tend to mirror business decisions due to poaching eachother for the same talent and consulting with the same agencies who are giving them the same information and findings. The way they set up their companies and operate is all pretty much the same and designed to be similar so as to be useful for investors looking to compare businesses in the sector. ux patterns are the same or similar enough. How they pay their drivers also the same or similar enough. When there is this much similarity of behavior in the sector one has to ask if there would even be a difference for the consumer between having all delivery under 1 company or 10000 companies all operating the same business model? No different than a small town restaurant scene lost to 15 different chain fast food restaurants all operating the same franchise model: customers have diversity of business on paper, but not really since it is all just more or less the same sort of business with marginally different offerings.
I can't think of a single industry or segment, whether consumer or enterprise, where 90%+ of the market isn't controlled by 1-5 companies. That's just how business works.
Chinese food restaurant? Lawn service
If I spent more than 2 seconds I could probably think of others
Schooling
I still tend to discover a takeaway or restaurant and then figure out how to get them to deliver.
I've never not ordered from somewhere I was keen on based on their choice of delivery service.
If the consolidation results in price hikes and poor service, what's the lock-in? Why can't the takeaways just go rogue and offer independent deliveries?
> Why can't the takeaways just go rogue and offer independent deliveries?
Because many of these delivery 'ad-hoc contractors'[0], sometimes even eating cost [1].
Pre-covid, you were often best off as a business either doing something that was 'known' to be delivery offered (i.e. pizza) or your next best option was to aggressively advertise it and have an extra staffer on hand willing to do the deed.
Then, you've also got the other form of arbitrage (or perhaps a cost thereof), of smaller independent restaurants/chains being unwilling or unable to handle the costs of properly covering drivers [2] and their pay when not driving [3].
Some restaurants started doing delivery during covid and kept it going. However most around here dropped because the volume wasn't worth it to them, on top of the 'streamlined flow' (don't need to give a route, the app the person picking up the 'pick-up' order is handling, does that for them.)
I'm not saying I like it but I get how it got here.
[0] - Remember that in the early days some of these companies would do all sorts of weird things like just have someone order on behalf.
[1] - There's an article about this involving 'pizza arbitrage' here https://www.readmargins.com/p/doordash-and-pizza-arbitrage
[2] - To be clear, both the startups as well as locals have a checkered history when it comes to proper coverage...
[3] - One can argue that such a person can be made 'useful' during the waiting time, however it becomes a complicated equation between 'what can this person be paid to do' vs 'are they willing to do it for that base'.
Regarding your link to the article on pizza arbitrage,
DoorDash and Pizza Arbitrage (2020) - https://news.ycombinator.com/item?id=40806356 - June 2024 (147 comments)
DoorDash and pizza arbitrage (2020) - https://news.ycombinator.com/item?id=32086170 - July 2022 (230 comments)
Doordash and Pizza Arbitrage - https://news.ycombinator.com/item?id=23216852 - May 2020 (518 comments)
> Why can't the takeaways just go rogue and offer independent deliveries?
Because delivery is really expensive. To do it well over a large area you have to have a lot of staff. You also want to keep them all busy, so it works better with a lot of resturants. Margins are thin, lots of risk in an area that is very different from the core activity of the resturant.
Its an almost textbook example of a situation where a specialist company makes sense.
Lots of their infrastructure for handling orders (iPads, software integration into their payment system) was done around Covid, and some have started to integrate in-person orders through the same “single unified system” creating a higher and higher cost to switch delivery systems.
AFAIK there’s no well-supported open source order/delivery management software. The companies that were ready during covid took all the extra, enormous demand for building delivery and order online systems built atop a typically antiquated order management system and have stuck around since
Sometimes i’ll get a cheaper delivery/food cost calling vs ordering online, but now some places are just raising their other prices to match online
And yet, why do you need software?
In the 80s, I delivered pizza with no software. The place had a normal cash register, for pickups.
People would call, order, and we'd write it down. They it'd go on a wire with a clothes pin, until made. Then it went with the driver.
Each delivery was written down before leaving with it.
This worked for decades for everyone in the industry, flawlessly, perfectly, without issue.
Why is software required? Any given reasons are an unneccessary complication.
And here's the thing. Even in Palo Alto I order from companies still doing it this way.
The above system, paperwork wise .. again, is perfect. It's been done forever. It is faster and far less expensive than any unified payment and order system.
Seems to me, they're the smart ones.
as long as you've got enough order volume to keep a delivery driver consistently busy, that works fine and the apps are unnecessary. for a pizza restaurant, or anybody else focused on delivery orders, the apps aren't necessary
the utility of the apps is to distribute the load from multiple restaurants across a shared pool of delivery drivers, so a restaurant who otherwise wouldn't be able to offer delivery can tap into that labour pool for infrequent delivery orders. food delivery apps have greatly expanded the number of places that offer delivery. most restaurants simply didn't offer it before the apps.
Once you have multiple restaurants, you leave the mom and pop shop scenario, and move into realms of more sensible optimization.
But there are so many independents. And they make very good food. And they still do it without apps, and do very well.
Everyone hates calling and apps give customers a list of restaurants with menus to browse. Restaurants also do all of their in-restaurant management with software (why not paper? ask them idk) which I assume has some integration with the app.
I can imagine some type of open protocol that lets them self-host an order service though, or at least an open solution that’s hosted by many providers and many separate apps. That would be nice for everyone
I remember when McDonald's didn't have kiosks. Human interaction with a fast food worker is vastly overrated. Both sides hated it.
Maybe we should all make the world a better place, suck it up, and just call?
Maybe making the world a better place, means human interaction and less automation.
Say what you will but customers pay to not suck it up
There's no reason this software has to be expensive. I'd rather fix the software in this case.
And phones in particular suck when you involve real-world connection quality and accents.
That would make my own world worse
I only order from places that deliver themselves.
Rappi is missing. It's huge in all of Latin America.
You're absolutely right, I'm guessing the GMV of rappi should appear on the graph. My guess is about 3-5B.
Can someone help me understand how many companies are generally needed for healthy competition, as opposed to a market being considered fragmented or monopolistic? To the untrained eye, having 5 players might seem like a reasonable level of competition and suggest a functioning market. Personally, I’ve always seen food delivery as a premium service rather than an essential one — so it makes sense that there's a higher cost for the convenience of having a burrito delivered to your door in near real time.
Because the 5 players are for the entire planet, not any individual market. In any particular market, there are one or two big delivery companies. The 5 companies are Meituan, DoorDash, Uber, Prosus, and Delivery Hero. I'm in the US, where DoorDash and Uber Eats are the major players. I've never even heard of the other three, which dominate non-US markets.
5 companies dominate a market that 5-10 years ago didn't even exist. That doesn't exactly sound terrible.
Of course it did. People have been ordering delivery food for decades. They just called up the restaurant to do it.
I dont know where you live, but that was absolutely not true where i lived.
The only exception was chinese and pizza. Nobody else offered delivery. The current delivery market is much more than that.
Is this not missing that lots of places still do their deliveries themselves?
For e.g. in my city I can order Pizza from Dominoes or Pizza Hut. Both are located on the same road. Dominoes uses it's own staff, Pizza Hut uses Deliveroo. I've tried both but Dominoes will delivery reliably in 25-35 minutes, and Pizza Hut took over an hour and a half. Guess which one I use still!
All fueled by illegal/irregular/undocumented migrants.
I think there will be some sort of socio-economic reckoning from this in the future...
The elites don't want you to know, but you can pick up your own food for free. I have picked up 200 pizzas.
Getting in the market now is super tough.
We have a French company, called Delicity, that has been doing just that for the last few years. They have a smart strategy and determined people.
It works, but they have to fight tooth and nail for each city they get a foothold in.
I had a call with the founder, the guy has more dark circles than visible eyes.
My understanding is that the drivers are non-exclusive and can work for multiple companies at the same time.
So as their is a ready supply of drivers, anyone who can raise an amount of money, and find a niche can enter the fray?
The suppliers (restaurants) are not happy with 30% or so being taken by the giants.
i stopped ordering delivery for the most part as i'd rather walk and get it than pay the markup. a lot of restaurants are either spinning up their own app with discounts OR are offering a discount for ordering directly thru them. and honestly, i'd rather a local restaurant get more profit than just cutting it over to one of the apps.
a month ago my wife wanted to order chipotle on a lazy sunday and it was $64 for delivery and only $31 when i went to stand in line and get it. unreal.
These delivery companies have become a far bigger "Evil" than Amazon or any other megatech company people often like to criticize. Because they provide nearly no benefit to anyone on any side of the marketplace and increasingly offer horrible customer service.
But as I write this on the deck of a lake cabin I rented in New Hampshire, I'm reminded how different the world is outside of big cities like my home in NYC. There is one place on Doordash up here.
Please explain why people are collectively spending billions of dollars on these services if they provide nearly no benefit to anyone.
VC funding subsidizing the entry of these firms into the market. Few competitors contributing to pricing power among these firms. Network effects arising from coordinating the multi-sided market of drivers, restaurants, and consumers.
Early subsidization has led to the position of these firms as middlemen that can extract something akin to rent from their dominant market position. The vig that middlemen collect isn’t a benefit to consumers but something they pay for with every transaction (price mark ups, service fees, narrowed choices).
No, profit isn’t a sign of consumer benefit. Often it’s quite the opposite actually.
I said "nearly," not no benefit whatsoever.
Personally speaking, I use it because it allows me to be lazy. Every time I do I say next time I wont.
How do they measure 90%? If every restaurant in the US used Uber Eats and also had their own delivery, what % would their methodology say that Uber Eats had?
> total food delivery market worldwide
This is the article's claim, but I'm fairly certain it's of the food delivery aggregator market. There's still plenty of independents.
Yeah, there’s no way Domino’s doesn’t appear on that chart.
Tragic that I spent much of my economics classes at high school and university learning about "perfect competition". I get that it's a theoretical underpinning, and rarely a reality, but still. I remember learning that monopolies being really frowned upon ... and yet here we are ... in a world of increasing monopoly.
The last two decades have been a joke in relation to anti-monopoly action.
The thing about food delivery services is that it has one outcome people want -- to get their food delivered. It's no surprise the biggest contenders in the beginning of instant food delivery now have a monopoly.
Now to stand out you need to be dirt cheap or offer something innovative/creative..I guess like with every other industry these days
Do they control your car, legs, and bike?
Shockers, cartel to monopoly power exists in virtually all markets.
Even things like farming whose geographic distribution and commidification maybe monopoly resistant are monopolized in processing, seed, tools,etc by companies like ADM.
Five seems not that bad when compared to things like phone OS, CPUs, GPUs, browsers, where we get 2-3.
I have always been curious why I don't see more local food delivery companies in my city. I imagine for all cities where there is a market for DoorDash, a local company could beat them out with more specialized services catered to that region.
I know these are three sided marketplaces and difficult to coordinate demand and supply ... but why isn't there more locally hosted town and city level options that undercut the national/international conglomerates? Food delivery is ultimately a local thing.
I expect some open-source, distributed, and free service will disrupt all of this
I'd love to live in a country where these apps are developed by the federal government as open source freeware tools for local governments to offer tip-free deliveries to citizens, and well paying jobs with good benefits.
Unfortunately, in the US that would just mean every 4 years someone goes in and tries to literally destroy it so their buddies can privatize it. The poor post office, man.
I think this will be even more consolidated in the future. Or mostly duopoly in many markets. Food delivery is capital intensive. It is unlikely that new players enter the market.
It continues to be crazy to me that there isnt a delivery driver owned competitor that has just taken over 100% of the market.
Regardless of market position, are food delivery companies actually making money at the moment?
Sounds like a fairly normal market structure.
I think 5 is a good number based on no data or experience. Feels like enough where you could reasonably tell one to pound sand if they start getting too greedy, while not being forced to just take the other 1.
One of those companies are available where I live, and I'll never use them, because they make my pick ups insufferable.
I have kids, and can see McDonalds from my bedroom window, so I have more McDonalds points than I care to admit. Wolt is pissing me off every time. The amount of time the McDonalds staff needs to dedicate to Wolt staff is insane. They could easily serve twice the customer in resturante/drive-through if they didn't have to help a borderline incompetent Wolt staffer on a moped. It's actually rude to priorities deliveries over in restaurant customers. For that alone I will never use Wolt. Fortunately every single good pizza place nearby have their own drivers, who are actually polite and competent.
I’ve had this experience specifically with Wolt in Germany: sat in a busy restaurant with sit in diners waiting 2 hours for their meals while the kitchen seemed to be catering for a constant stream of Wolt drivers.
And the real kicker is that of course since this is Germany all the negative reviews have been sued away, including my wife’s very moderate 3 star review. Of course German restaurants will claim it is libel if you write that you had to wait for your food
I don't see the attraction of these apps either
the food arrives lukewarm, in a smaller portions and costs more
in addition their widespread use hurts the restaurants you like
and drives down wages for society, because the only people who can live on what they pay out to the drivers are illegal immigrants paying zero tax (with the state paying for room and board)
it's all negatives
I honestly just can't comprehend how people so easily just throw away money on these apps - The fees are ridiculous on top of already expensive restaurant prices.
and? network effects. what's so surprising.
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Is this surprising?
This is what our actual economic system is all about: a series of market oligopolies whose greed is unchecked by our political establishment and legal apparatus with the complicity of the voting masses. Any attempt to implement measures to palliate the social decay and corruption it breeds will be branded as chinese communism and opposed by the media and the public.
We have collectively decided that the economy shouldn't be in service of the people, canis canem edit.
Responding to a deleted comment on tech control:
They do already, google, Microsoft, meta, Amazon all AI defense contractors using their technology to suppress negative feedback to their involvement in military contracts. Police using surveillance to spy on journalists phones. Healthcare approval completely automated by AI and school that don’t know difference between student or AI homework.