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Comment by pgrote | Hacker News Reader

This is the one thing I cannot wrap my head around. How does anyone make any money on orders this low? Based on the screenshot the total was 12.28. UberEats takes 1.00 for a fee and I think some from the vendor. The delivery person gets 1.29.

Does UberEats pay a minimum for the delivery to the delivery person and the tip is addtional? If so, whose end does it come out of?

Are the delivery services trying to make it up in volume?

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UberEats is making money from VC and isn’t profitable [1]. They charge the customer a fee, and take 30% from the restaurant as a middleman fee.

[1] https ://nymag.com/intelligencer/2020/08/if-uber-eats-isnt-profitable-now-when-can-it-be.html

30%. Thirty freakin percent. Plus a delivery fee. And they can't turn a profit? That's not a business model that can be fixed by optimizing some conversion rate or efficiency factor by any reasonable percentage.

> That's not a business model that can be fixed by optimizing some conversion rate or efficiency factor by any reasonable percentage.

Many, many people made this exact case during the heyday of gig economy companies. Many a VCs and investors (including those who run this illustrious site) mocked this criticism as that of know-nothing haters who simply could not understand the brilliance of the minds behind these operations.

They don’t. All of the delivery companies are massively (as in billions) unprofitable with no reasonable path to profitability due to competition from other equally unprofitable VC funded companies.

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