The competition between GrubHub, DoorDash, Postmates, and UberEats illustrates the importance of expanding supply and focusing on growth over profits
which reminds me that Postmates announced that it was filing for an IPO over a year ago and still hasn't pulled the trigger. https://medium.com/... Dare Obasanjo / @carnage4life : Great summary of how Grubhub won and lost the food delivery wars. They focused on connecting restaurants that already delivered to customers while UberEats/Postmates/Doordash built delivery as a service. Funny thing is Grubhub's model's more profitable. https://medium.com/... Tren Griffin / @trengriffin : 1/ “When you start in a small, focused market, it's a lot easier to build liquidity and get to a meaningful percentage of that market, becoming the best place for both the supply and demand to go. When this happens, your network effect kicks in...” https://medium.com/... Boris Wertz / @bwertz : .@sarahtavel on what marketplaces can learn from the food delivery wars: 📈 Dramatically increasing supply is a great strategy to win against incumbents 🌐 Local marketplaces should focus on dominance in a market, not aggregate GMV across many markets https://medium.com/... Robin Dechant / @robindchnt : Spot on analysis of the food delivery biz by @sarahtavel with many take-aways for marketplaces in general. => Dominance in a market, not aggregate GMV across many markets, is the goal of any marketplace. https://medium.com/... @garrytan : Dominance in a market, not aggregate GMV across many markets, is the goal of any marketplace and ultimately what determines equity value. https://medium.com/... Hussein Kanji / @hkanji : Food delivery wars in the US https://medium.com/...
Context & Ripple Effects
The piece lands mid-arc in the US food delivery wars: GrubHub built an order platform for restaurants that already delivered — a model analysts like Dare Obasanjo note is the more profitable one — while DoorDash used SoftBank money to win the suburbs with delivery-as-a-service, prioritizing GMV growth over unit economics. Postmates, caught between models, had been sitting on a delayed IPO while exploring exits.
What makes the argument durable is what came after: Postmates' stalled listing and acquisition talks with DoorDash, Walmart, and Uber showed the growth-first playbook needed a buyer or a balance sheet, and later coverage of rapid grocery delivery startups losing $20+ per order and Gopuff's post-pandemic retreat confirmed how expensive synthetic supply gets when subsidies fade.
First-order effects
- Restaurants that pivoted to delivery during the pandemic became dependent on whichever platform controlled their demand, deepening the lock-in the growth-at-all-costs players were buying with subsidies.
- Postmates faced a forced choice between a much-delayed IPO and selling itself, since its burn rate left it unable to keep matching DoorDash and UberEats subsidy-for-subsidy as an independent.
Second-order effects
- Just Eat Takeaway's acquisition of Grubhub was a direct bet on the rival model — restaurants handle delivery, the platform avoids fleet costs — meaning the 'profitable' strategy survived only inside a consolidator.
- Capital providers effectively set the competitive rules: as long as SoftBank-scale money kept flowing to DoorDash, rivals had to raise and burn at the same pace or cede market share, pushing pricing power toward whoever could fund the flywheel longest.
Third-order effects
- If the pattern holds, local delivery marketplaces consolidate into one or two subsidized winners per geography, with the loss-making phase functioning as a moat that late entrants cannot cross without comparable capital.
- The recurring $20+-per-order losses across grocery and food delivery point toward structural repricing once public-market investors demand contribution margins — shifting the industry from growth-maximizing private funding logic to execution-driven economics.
The trend: Marketplace competition in on-demand delivery rewards subsidized supply expansion over profitability until capital dries up and consolidation forces the survivors to monetize the demand they bought.