NEW YORK (AP) – When Mahlet Berhanemeskel gets back to her New York City home from her 90-minute commute, she doesn’t feel like cooking. So instead she orders food like BLTs, Cheez-Its and cookies from an app called Gorillas. It’s affordable and takes 10 minutes.
“It’s instant gratification,” she said.
Gorillas is one of several companies that venture capitalists have poured billions into in the latest pandemic delivery craze: companies that promise to get you a bottle of Tylenol, an iced coffee, hummus, a cucumber or a roll of paper towels in 30 minutes – or even 15 minutes – or less. They typically deliver from mini-warehouses in residential and commercial neighborhoods.
Experts say they are unprofitable. Bigger companies are nonetheless muscling in. And officials in European cities and in New York, which has become the U.S. launching pad, have already started complaining about how they operate, saying it’s bad for employees and residents.
“The problem I see is that quick commerce players, despite the huge valuations enjoyed and the seemingly unstoppable money flow that they get to grow, at some point they will have to find a path to profitability,” said Bain partner Marc-Andre Kamel, the co-author of a recent report on the online grocery market.