Softbank may get a winner and a loser in the food delivery market - Business Insider

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With Grubhub reportedly looking to throw in the towel, SoftBank may finally have a winner in the food delivery market. But it may have a loser too.

Unlike its two big competitors, Grubhub has been profitable. But its CEO felt forced to duplicate some of the unprofitable practices of its rivals amid slowing growth.

SoftBank's Vision Fund, the brainchild of CEO Masayoshi Son, has used money as a weapon in an attempt to anoint winners in particular markets.DoorDash was on track to lose $450 million last year, not including taxes, amortization and depreciation, on about $1 billion in sales, according to a report in The Information.

Since its founding in 2004, Grubhub has focused on teaming up with small and medium-sized restaurant businesses, typically ones that already had their own delivery drivers. Grubhub essentially acted as a marketplace, creating a central spot where consumers had a lot of choice, and helping its restaurant partners take online and app-based orders.

But Maloney believes the days of the three big services all thriving in their own niches is over, as he told Business Insider in an interview late last month. "The green fields are over," Maloney said in the interview with Business Insider last month. "You have three heavily capitalized firms at scale. It's going to be a street fight until something breaks."Assuming the Journal's report is correct — Maloney did not respond to an email seeking confirmation — it looks like Grubhub may be the one that broke first.

 

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Only till most of fast-food delivery services wise up and start delivering their own food like pizza places do.

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