Whenever people see old systems still in production (say things that are over 30 years old) the assumption is that management refused to fund the replacement. But if you look at replacement projects so many of them are such dismal failures that's management's reluctance to engage in fixing stuff is understandable.
From the outside, decline always looks like a choice, because the exact form the decline takes was chosen. The issue is that all the choices are bad.
I used to deliver pizzas in the early 2000s. I would get paid
$4/hour (later bumped to $5 per hour)
$1/delivery (pass through to customer)
+ tips
I had good days / times where I was pretty much always busy and made around $20/hour by the end.
So delivery cost the customer $1 + tip (usually ~$3), cost the business maybe $40 a night (~2.5 drivers for 3 hours), and I made out pretty well.
I can't compare exactly but I feel like today the business pays more, the customer pays more, the drivers get paid less and it's all subsidized by investors to boot. Am I totally wrong on this? But I feel like delivery got so much worse and I don't know where the money is going.
It is exactly that! Food delivery is an excellent example of 'things just got worse'.
In 2019, 'delivery' was a specialty a restaurant would have to focus on to offer. Pizza places (Papa Johns, Pizza Hut, etc) and other specific delivery-focused restaurants (such as Panera Bread, Jimmy Johns, or your local Chinese restaurant) would have actual W2 employees who did delivery driving, as part of their job. The restaurant would want deliveries to go well (for both the customer, as well as the driver), so would make sure their own staff had reasonable access to food, some light training, and would ensure they could deliver it somewhat well. (They would reject orders too far away, they wouldn't serve food that wouldn't survive a delivery trip well, etc)
In post-COVID 2025, "every" restaurant offers delivery, but almost no restaurant still employs their own delivery drivers (locally, Jimmy Johns might be the only one left). Everyone else just outsourced to DoorDash. DoorDash drivers are employees who are 'legally-not-employees' (1099 employees), so they no longer have any direct access to the restaurants, and they can't train well for any specific service, because they might have to visit any-of-50 restaurants on any given day, all of which have entirely different procedures (even if they are the same brand or chain). Restaurants have zero incentive to ensure deliveries go well (the drivers aren't their employees, so they no longer care about turnover, and customers have to use DoorDash or Uber Eats or equivalent, because almost every restaurant uses it, so there's no downside to a DoorDash delivery going bad).
Prices to consumers are double-to-higher than what they were in 2019, depending on the restaurant. Wages are down, employment security is entirely eliminated. Quality and service have tanked.
Presumably, investors make slightly more money off of all of this?
But since it's all investor and profit driven for the bigger company, costs get cut on every side.
These services basically don't work with Western level wages. The economics are just not there.
Cost of living from the fallout of '08 simply skyrocketed and most of the country didn't not increase compensation to make up for that. Despite that company simply charged more while cutting costs at the same time. So the driver and the customer lost out.
I know much of the answer is a mix of private equityb and an overload of debt taken from insane evaluations.
1. Pizza travels very very very well
2. Pizza is pretty cheap to make
3. Wages (and costs of transportation) were lower 20 years ago.
More generally, delivery as a model can work, but not when you have an organisation of really expensive engineers/salespeople working on a frontend to it.