Page 12 - aruba-today-20220421

A12 TECHNOLOGY
Thursday 21 april 2022

Latest apps promise fast service but

can they deliver?

are having growing pains.
Gorillas dropped its "10 min-
utes" delivery promise from
its U.S. marketing — now
it's just "in minutes." Gopuff
recently laid off 3% of its
workforce — more than
400 people.
It's not a sustainable busi-
ness model, says Len Sher-
man, an adjunct professor
at Columbia University's
business school. "There is
going to be a lot of consoli-
dation on some very pain-
ful terms."
Getir, a Turkish company

A worker sets to make a delivery on a bicycle in front of Goril- that operates in Europe as
las mini-warehouse in the Williamsburg section of the Brooklyn well as Boston, Chicago
borough of New York on Monday, April 12, 2022. and New York, said the key
Associated Press to profitability is adding
more mini-warehouses in
By TALI ARBEL ready started complaining the cities where it delivers.
AP Technology Writer about how they operate, "We're here for the long
NEW YORK (AP) — When saying it's bad for employ- term," said Langston Dug-
Mahlet Berhanemeskel ees and residents. ger, Getir's head of U.S. op-
gets back to her New York "The problem I see is that erations.
City home from her 90-min- quick commerce players, The company recently
ute commute, she doesn't despite the huge valu- raised $768 million, valu-
feel like cooking. So instead ations enjoyed and the ing it at close to $12 billion,
she orders food like BLTs, seemingly unstoppable and plans to expand in the
Cheez-Its and cookies from money flow that they get U.S. Customers range from
an app called Gorillas. It's to grow, at some point they people "ordering a late
affordable and takes 10 will have to find a path to night ice cream to some-
minutes. profitability," said Bain part- body who is doing a full
"It's instant gratification," ner Marc-Andre Kamel, the grocery shop for the week
she said. co-author of a recent re- for a family and everything
Gorillas is one of several port on the online grocery in between," he said.
companies that venture market. Lee Hnetinka, the founder
capitalists have poured Services are already shut- of FastAF, a delivery com-
billions into in the latest ting down. One, 1520, pany with a two-hour de-
pandemic delivery craze: closed in late December, livery model in New York,
companies that promise to and two more, Buyk and San Francisco and Los An-
get you a bottle of Tylenol, Fridge No More, shut down geles, said profitability is
an iced coffee, hummus, a in March, apparently hav- "just not a priority" right now
cucumber or a roll of paper ing run out of money. Buyk's as it invests in customer ex-
towels in 30 minutes — or Russian founders reportedly perience, saying their strat-
even 15 minutes — or less. were not able to provide egy is a long-term one and
They typically deliver from money due to restrictions pointing to Amazon's early
mini-warehouses in residen- put in place during the beginnings when it too was
tial and commercial neigh- Ukraine war; it did not re- unprofitable.
borhoods. spond to questions. Fridge There are new competitive
Experts say they are unprof- No More, in a tweet, said it threats from established
itable. Bigger companies was closing after two years restaurant delivery com-
are nonetheless muscling "due to growing competi- panies DoorDash, Grubhub
in. And officials in Europe- tion and other industry re- and Uber and grocery de-
an cities and in New York, lated issues." Its founder did livery service Instacart that
which has become the U.S. not answer questions. have noticed the appeal
launching pad, have al- Other delivery companies of the fast-delivery apps.
DoorDash has three
"DashMarts" in New York
that promise delivery of
groceries and conve-
nience-store items within 15
minutes, and says more lo-
cations are coming; it also
aims to deliver from Albert-
sons Cos. grocery stores in
more than 20 cities in half
an hour. q