Instant Delivery Startups Test a New Tactic: Slower Delivery

Instant-delivery startups promising to ferry groceries to customers in 15 minutes or less have rushed to expand in major cities like New York and Chicago in the past year. But they're burning far more cash in the U.S. than in other countries where they operate, causing several of them to test major changes to their business model -- including longer delivery windows that could allow the startups to pack in more orders per trip. The Information: One example is Jokr, last valued at $1.2 billion on paper, which told investors in the fall it would experiment with slower delivery times and a subscription service to reduce its heavy losses, according to a person with direct knowledge of the matter. In the month of August, the one-year-old startup was losing $159 per order in the U.S., according to internal data sent to investors in the fall, viewed by The Information. Buyk, a smaller instant-delivery startup, may also introduce longer delivery windows, its CEO said in an interview. And Fridge No More, an instant-delivery firm founded in 2020, plans to introduce a new private-label offering for items like olive oil and milk and to sell prepared foods such as pizza to similarly boost margins, according to a fundraising document seen by The Information. The pressure to change strategy so soon after launching illustrates the challenge of operating an instant-delivery business in the U.S., where intense competition from other rapid-commerce startups and more-established delivery firms like Instacart make it more expensive to attract customers. Labor and real estate costs are also much higher in the U.S than in developing markets like Brazil or Turkey, where some startups first set up their rapid-delivery operations.

Read more of this story at Slashdot.