Thank you guys for the thoughts! I agree that growing competition will likely be a major concern for GrubHub moving forward. The real question is has GrubHub built a substantial enough amount of brand equity as a first-mover to combat future competitive threats.
To follow up on one point, given the nature of GrubHub’s business model, the Company does not currently have the ability to improve price or delivery time to the customer — these are elements entirely under the control of the restaurant. But I think it points to an important point in that perhaps GrubHub does need to find new ways to embed itself in the takeout system other than merely serving as an online marketplace connecting diners with restaurants.
Interesting post, Ni. I was completely unaware of the fact that Drizly doesn’t clip a portion of each transaction similar to other “online/mobile marketplace” companies like Uber or GrubHub. I agree that the barriers to entry are incredibly low in this space — you essentially need a few smart software engineers to develop the app and a sales-oriented founder to pitch the local retailers. I could see this newfound industry evolving into a vicious land grab in which certain companies (or apps) establish dominance over certain major metropolitan areas of the country, and the only natural path to further progress is through consolidation (see Seamless / GrubHub).
As a New Yorker tried-and-true, thanks for the post! I certainly agree with you in that Mayor Bloomberg’s initiatives played a critical role in capturing the immense value embedded in New York City’s seemingly endless public assets. In addition to establishing economic incentives and business development programs, I think Bloomberg did a great job tapping into the pride of native and resident New Yorkers — these people want their city to be a beacon of modern society, personal and financial success, and fun. To meet this vision, local, homegrown businesses need to be able to flourish under the resources that the city could provide.
Great stuff, Lisa! To add on to Claire’s point, I’m also curious about the implications of benevolence and social mission in for-profit entities. As a consumer, I certainly like the fact that a pair of eyeglasses is being donated as a direct consequence of my own purchase, but I’m not entirely sure as to how much monetary value I place in that. If there were another retailer selling a similar pair of glasses for $20 less than Warby Parker’s frames, but with no equivalent social good, I might be tempted to go with the cheaper pair. I also wonder about the sustainability of the mission over time: the Company is riding huge tailwinds currently as a young, growing business, but what if performance starts to plateau or decline? Given that WP could essentially double gross margins without its philanthropic efforts, do you think management would ever consider using this as a lever to pull back on in tough times?