With the shuttering of SpoonRocket last week, the recent news that Instacart was slashing its fees and commissions to drivers, and the December closure of rideshare also-ran Sidecar, there's been plenty of talk about the bursting of bubbles, particularly in the on-demand app sphere. CNet takes up the topic this week, asking if the on-demand economy also referred to as the shut-in economy when you're just talking delivery apps might be dying. But, of course, the answer is probably no it's just contracting.
Given how many players there are in the arena, it's natural that the third- and fourth-place competitors aren't going to make it unless they've somehow already figured out how to be profitable. Companies like Sprig and Munchery still seem to be going strong, though it's likely the low prices per meal they've maintained in some cases will not stay so low as they begin to test their customers' loyalty and run out of VC cash. (How long can I possibly get to have warm dinner delivered for $12 with no tip?)
In the world of on-demand house-cleaning startups, Homejoy already shut its doors last year despite having raised $38 million in startup funds they said because they couldn't afford to classify independent contractor house cleaners in California as employees.
The on-demend laundry service world seems most certainly overcrowded, with Laundry Locker, Instawash, Rinse, and Washio all still battling it out, and competitor Prim already pushed out of the game two years ago.
Meanwhile, Caviar, Eat 24, Postmates, Door Dash, and Grub Hub/Seamless are all going to get a real run for their money following last week's launch of Uber Eats an attractive app with a solid array of restaurant partners and faster delivery guarantees. Of course, backlash against the hegemony of Uber and its questionable screening process for drivers may work against it, too.
And let's not even start with the on-demand valet service apps like Zirx (which shut down last month), Caarbon (which "temporarily" shut down in preparation to pivot or get bought last August), and Luxe Valet, which is still running around in blue jackets downtown, but if anything's going to die a fast death in a market down-turn, it's a valet parking app.
No doubt there will always be laziness and a demand for delivery and for many years San Francisco was especially bereft when it came to food delivery options, a market that got filled right quick. But venture capitalists reportedly cut investments in these startups by a third in the last quarter of 2015 signaling that they all know there's a glut of on-demand everything, and something's gotta give.
Wired insists "the demise of a few companies does not signal the end of the on-demand idea," and they're of course right. There are, though, a few more failures to come before this whole situation shakes out.
Previously: Are Caviar, SpoonRocket, And Instacart Doomed To Go The Way Of Kozmo And Webvan?
