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

Trendingnow

1

Microsoft AI chief gives it 18 months—for all white-collar work to be automated by AI

2

The Bezos family just donated $100 million to help achieve one of Mayor Zohran Mamdani’s top campaign promises

3

The top foreign holders of U.S. debt may soon dump Treasury bonds and bring their money back home, potentially spiking borrowing costs

1

Microsoft AI chief gives it 18 months—for all white-collar work to be automated by AI

2

The Bezos family just donated $100 million to help achieve one of Mayor Zohran Mamdani’s top campaign promises

3

The top foreign holders of U.S. debt may soon dump Treasury bonds and bring their money back home, potentially spiking borrowing costs
TechFortune 500

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Latest in Tech

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

Most Popular

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

Latest in Tech

murdochs
CommentaryMedia
OpenAI paid $100 million for a talk show. James Murdoch is eyeing an even bigger deal. The hot new asset class is humanity
By Lin CherryMay 17, 2026
15 hours ago
dennis
CommentaryAI agents
Freshworks CEO: why agile enterprises are winning the AI race — and what they did differently
By Dennis WoodsideMay 17, 2026
15 hours ago
A man with a headset sits at a desk in a call center.
EconomyAutomation
The AI boom hasn’t stopped U.S. companies from hiring cheap offshore labor, and overseas call center employment is still skyrocketing
By Sasha RogelbergMay 17, 2026
16 hours ago
Zillow CEO doubles down on remote-work model: ‘There is talent everywhere in this country’
Workplace Cultureremote work
Zillow CEO doubles down on remote-work model: ‘There is talent everywhere in this country’
By Marco Quiroz-GutierrezMay 17, 2026
16 hours ago
Stressed job seeker
SuccessGen Z
Gen Z is right about the job hunt—it really is worse than it was for millennials, with nearly 60% of fresh-faced grads frozen out of the workforce
By Emma BurleighMay 17, 2026
16 hours ago
A 45,000-person labor strike at Samsung’s memory chip plants could throw a wrench into the AI boom
EconomySamsung
A 45,000-person labor strike at Samsung’s memory chip plants could throw a wrench into the AI boom
By Catherina GioinoMay 17, 2026
19 hours ago

Most Popular

Microsoft AI chief gives it 18 months—for all white-collar work to be automated by AI
AI
Microsoft AI chief gives it 18 months—for all white-collar work to be automated by AI
By Jake AngeloMay 16, 2026
2 days ago
The Bezos family just donated $100 million to help achieve one of Mayor Zohran Mamdani’s top campaign promises
Politics
The Bezos family just donated $100 million to help achieve one of Mayor Zohran Mamdani’s top campaign promises
By Jake AngeloMay 12, 2026
5 days ago
The top foreign holders of U.S. debt may soon dump Treasury bonds and bring their money back home, potentially spiking borrowing costs
Economy
The top foreign holders of U.S. debt may soon dump Treasury bonds and bring their money back home, potentially spiking borrowing costs
By Jason MaMay 17, 2026
10 hours ago
Former top Russian official admits the country is over Putin and can 'imagine a future without him' — even elites bail as Kremlin seizes their assets 
Politics
Former top Russian official admits the country is over Putin and can 'imagine a future without him' — even elites bail as Kremlin seizes their assets 
By Jason MaMay 16, 2026
1 day ago
'No one was coming to save me': How Reese Witherspoon built a $900 million company from a problem Hollywood wouldn't fix
Success
'No one was coming to save me': How Reese Witherspoon built a $900 million company from a problem Hollywood wouldn't fix
By Sydney LakeMay 17, 2026
17 hours ago
SpaceX heads into a record-shattering IPO with the 'deepest moat that exists today' as investors vow to 'never bet against Elon'
Innovation
SpaceX heads into a record-shattering IPO with the 'deepest moat that exists today' as investors vow to 'never bet against Elon'
By Jason MaMay 16, 2026
1 day ago

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