The first section of 2016 has not exactly been smooth sailing for the various innovators and entrepreneurs that decided to jump into the exciting world of becoming the Uber of something or other.
As the list of firms that have either winked out of existence, been folded into another firm or suffered at the hands of a down round continues to grow, the questions about the long-term viability of the space are becoming rather pointed. Calling your business the Uber of something and actually building a scalable, profitable firm that looks or acts anything like Uber are quite different things, as it turns out, and one is far less easily attained than the other.
After some free-wheeling fun in the demand marketplace — powered by some free-flowing capital — the market space seems mostly to be narrowing and winnowing down those firms that are better in concept than they are in action.
And while such course corrections have generally been touted as necessary in a market that had become oversaturated, there is still something undeniably underwhelming about considering the possibility that the best days of innovative ideas in the on-demand market are for the most part over.
Or are they?
This week, we look in on all the relatively new players stepping into the On-Demand Game of Thrones — far fewer than there were a year ago, but still shooting up and even grabbing some early funding to get up and growing. The garden is smaller in 2016 but, after weeks of reporting closures, the signs of spring may yet be encouraging.
We’re also taking a look at the uptick in partnering going on in the space, as firms are looking to consolidate and differentiate their offerings.
And, of course, the random trend of the week.
Darkstore | With $150,000 from Gary Fritz, the former president of Expedia.com, Darkstore is a testament to the phrase, “if at first you don’t succeed, try and try again.” Darkstore comes from former WunWun head Lee Hnetinka. WunWun was an on-demand delivery service for consumers that was in the early wave of washouts when it shut down about a year ago. Darkstore is an update on the WunWun concept founded by Hnetinka and JustVacay founder Wilson Lee. It acts as an on-demand delivery fulfillment platform for eCommerce brands — and currently it’s working with Tuft & Needle.
Darkstore works by first grabbing up excess capacity in storage facilities, malls and bodegas and repurposing the spaces as fulfillment centers. Its clients are direct-to-consumer eCommerce brands that don’t have local, brick-and-mortar stores that want to offer faster delivery times.
“We’re not going to take on real estate leases and we’re not going to run these warehouses ourselves, so we want to be the largest fulfillment company that doesn’t own a fulfillment center,” noted Hnetinka.
Capsule | Recently seeded for an undetermined sum, medicine on demand is the basic premise behind Capsule — a business that was conceived after its founding CEO had a truly traumatic trip to a pharmacy and wondered if there were a way he could use the Internet to never, ever go back.
And the Internet — specifically the mobile Web — provided insofar as it allowed him to build an NYC-based service that will drop meds off right at a customer’s door.
The system works by allowing customers to request for their doctors to fill out prescriptions for the capsule pharmacy instead of at one of the real-world’s equivalents. Capsule itself is tied into all electronic medical systems, meaning prescriptions are entered as they would be for any pharmacy. The customer then logs into their Capsule account (on Web or iOS) and designates a time and place for the medicine to be dropped off.
Capsule also provides 24-hour live chat via SMS or email to answer questions that consumers might normally ask their pharmacist. There is no extra charge for using Capsule for medication delivery.
Deliveroo/RooBox | While bemoaning the worrisome state of food delivery on demand has become fashionable of late, Deliveroo is jumping into the race with a sort of novel spin on the premise. They aren’t focused on making the food so much as they are hoping to help give restaurants a space to cook it in — and a way to deliver it.
Specifically, Deliveroo has started investing in kitchen space as a means of helping the service grow into new areas, particularly those that are underserved by restaurants (which tend to clump in cities). According to Deliveroo Co-founder Will Shu, there are a lot of residential areas in London (where Deliveroo is based) that just don’t have enough restaurants to go around.
The idea is called RooBox, and the plan is to draw restaurants into those neighborhoods that have takeout demand but not quite the ability to support a sit-down establishment. The RooBox is their cooking space. Deliveroo makes the upfront investment in the space, and the restaurant enters into an agreement for use. Deliveroo is now selling merchants access to both hungry customers and a place to prep their dinners.
RooBox also allows the firm to remain committed to its hyperlocal delivery zones, which exist to make sure that customers get their food quickly enough so as to not have already cooled. Since Deliveroo focuses on higher-end fare, as opposed to QSR cost, Shu notes those concerns are particularly central.
Carl’s Junior & DoorDash | The parent company of Hardee’s and Carl’s Jr, CKE has announced a pair-up with DoorDash to finally make a Carl’s Jr. premium burger something consumers can eat on demand — in Southern California anyway. To celebrate CKE’s jump into the wonderful world of food on demand, DoorDash is waiving all fees for a limited time on Carl’s Jr. orders.
“We’re thrilled to bring Carl’s Jr. to our Southern California customers with DoorDash, making it easier and faster than ever for them to get the burgers they love,” says Tony Xu, CEO and co-founder of DoorDash. “Whether an old favorite or a new taste, we’re looking forward to giving customers a new and innovative way to get delicious, custom orders from Carl’s Jr. right to their doorsteps.”
Shopify & Postmates |
Postmates has paired up with eCommerce software provider Shopify to allow its online merchants the option to offer on-demand delivery to their local customers at checkout, with the service launching into 200 cities around the United States, according to Shopify.
This opens 21,000 smaller merchants on the Shopify platform to DoorDash and its same-day delivery capacity for many of their customers. However, it is not quite a plug and play integration — merchants will need to use a brief installation process to get the system up and running.
Each merchant can choose how to promote their same-day shipping offering to customers, but for all merchants, the option will appear upon checkout as a same-day delivery option. After the customer leaves the online store, they will get an option to take delivery from Postmates. From there, the merchants packs it, and Postmates gets it to the customer via courier.
As of yet, the financial details of the partnership remain unknown.
Gas On Demand | No, really, this is a thing that is catching on as a fad, according to USA Today.
“Going to the gas station is just a barrier for people during the course of the day,” said Chris Aubuchon, the chief executive officer of Filled, the 18-month-old startup that has raised $3.25 million in funding. “Nobody loves it but everybody has to do it.”
And so it is a need that Filled … well, fills with trucks carrying gasoline, ready to find your car and fill you up. Filled is far from alone — Booster Fuels, Filld, Purple, WeFuel and Yoshi are among the gas-delivery startups operating in San Francisco, Los Angeles and other cities across the country.
The only problem? Firefighters and their rules. Apparently driving around with several hundreds of thousands gallons of highly flammable fuel in a truck without proper licensing is not entirely popular with local officials.
“It is not permitted,” Lt. Jonathan Baxter, a spokesman for the San Francisco fire department, told Bloomberg.
Whether it could be in the future, some cities are more open to that idea than others.
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