A look at the bruising price war in Latin America among food delivery companies Uber, Didi, and Rappi, all of which are funded by SoftBank
Wall Street Journal : Tweets: @rwhelanwsj , @rwhelanwsj , and @andreanavarror Tweets: Robbie Whelan / @rwhelanwsj : This story is about venture capital's excesses, but it's also about how something so traditionally Mexican as churros and chocolate can explain competitive decisions made by huge investors. Thanks @jakenaughton for making delicious photos of fried dough. https://www.wsj.com/... https://twitter.com/... Robbie Whelan / @rwhelanwsj : “The SoftBank-funded fight is ‘just bad business,’ said Chris Sacca, founder of Lowercase Capital, an early investor in Uber. 'When an investor infuses multiple direct competitors with money to spend in a race to the bottom, it's just a waste.'” https://www.wsj.com/... via @WSJ Andrea Navarro / @andreanavarror : Investor giant SoftBank is funding all 3 sides in the battle between food-delivery & ride-hailing services in Latam Uber, Rappi and Didi have the Japanese fund as their biggest owner, creating a sort of circular firing squad. via @RWhelanWSJ @eliotwb https://www.wsj.com/...
Context & Ripple Effects
Rappi entered this fight as Latin America's on-demand darling — a startup operating in 28 cities that closed a $220M round led by DST Global at a $1B-plus valuation back in 2018. What changed is who sits on every side of the table: SoftBank is now a major owner of Uber, Didi, and Rappi simultaneously, so the region's food-delivery price war is three of its own portfolio companies burning cash against each other.
The WSJ frames it through venture capital's excesses — early Uber investor Chris Sacca calls the SoftBank-funded fight 'just bad business' — and it fits a pattern the coverage keeps documenting: SoftBank money also powered DoorDash's transformation into the biggest US delivery app, while rapid grocery startups in New York raised $5.5B+ only to average reported losses of $20+ per order.
First-order effects
- Uber, Didi, and Rappi are directly subsidizing orders against each other in Latin America, with SoftBank's capital effectively financing discounts on both sides of each transaction.
- Restaurateurs absorbing the platforms' high fees are already routing around them — in Mexico City, Facebook has emerged as a low-cost alternative to Uber Eats and Rappi.
Second-order effects
- Growth-at-all-costs economics are degrading the product itself: experts note Rappi's service has worsened even as the company keeps growing, opening the door for competitors like JOKR.
- The subsidy war invites non-VC challengers — Brazil's government launched its own delivery app Valeu to take on iFood's 80%-plus market share, showing incumbents' pricing power attracts state-backed entrants.
Third-order effects
- If the pattern holds, SoftBank's model of funding multiple combatants in the same market becomes self-defeating: it wins whichever horse finishes first but pays for the race three times, pressuring the firm toward consolidation or retreat in on-demand delivery.
- The structural endpoint is delivery markets consolidating around whoever can outlast the subsidy phase, with merchants and customers trained on unsustainably low prices — the same dynamic playing out from São Paulo to New York.
The trend: SoftBank's checkbook is turning subsidized price wars into the default playbook for on-demand delivery across markets — with the same investor bankrolling multiple rivals until consolidation or exhaustion ends the burn.