The Food Delivery War

5

October

2016

5/5 (1)

Uber launched the food delivery app UberEats in Amsterdam one day prior to the IPO of rival Takeaway.com. “Uber has been delivering people around cities for years, we are a key part of the infrastructure and we know how cities move,” said Jambu Palaniappan, general manager for UberEats in Europe, the Middle East and Africa. With UberEats people can order food from restaurants which do not have their own delivery service. Uber’s deliverers go back and forth between restaurants and customers by bicycle, car or scooter following the instructions of an app.

It is – after the arrival of the British Deliveroo and German Foodora to major cities in the Netherlands – a new concern for Take-away.com, the parent company of Thuisbezorgd.nl. The company issued an IPO on September 30, just when international competition is entering a new phase between food deliverers. The regional start-ups are trying to stay ahead of wealthy US companies, such as Uber and Amazon.

Size is crucial

Takeaway.com hopes to raise about 161 million euros with the IPO. In comparison: Uber managed to raise about 13 billion euros in the last couple of years. Also the pockets of Deliveroo and Foodora are much deeper than those of the Dutch company. However Thuisbezorgd.nl claims to still have about 90 percent of the Dutch market. According to the prospectus, the company has grown rapidly in Germany and Poland as well. The reason for the fierce competition in the food delivery market is that the companies believe that the winner-takes-all. This means that the eventual winner could monopolize the entire market.

Market penetration

General manager Jambu Palanappian for UberEats in Europe also thinks that the food delivery market works this way. According to him, it is all about global economies of scale in order to keep costs down and to maintain a technological edge. UberEats is moving into the Amsterdam delivery market by giving big discounts. For example, it does not charge for delivery and there is no minimal order amount. Also Foodora and Deliveroo have recently engaged in similar activities. It is the question whether Takeaway.com can keep up to this fight with its limited resources. It is going to be very interesting to see who will be the winner who takes all, if there is any.

 

References

https://www.ft.com/content/9761e788-84ca-11e6-8897-2359a58ac7a5

https://www.nrc.nl/nieuws/2016/09/27/uber-stort-zich-ook-op-maaltijdbezorging-4480414-a1523662?

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What makes you click: The biggest experiment of all time

28

September

2016

4.9/5 (10)

At the moment we’re living in the biggest experiment of all time. You may not know it and you may not have asked for it, but we all take part in it. The results are being used to persuade you, influence your political opinion, make you stare longer and more often at your smartphone screen, and to make you buy more stuff. Billboards and commercials are being replaced by online persuasions. The persuaders have learned how your brain works, and with that, how to make you click. It’s all about conversion rates, time-spent, clicks and habits.

Back in the 1930’s, a psychologist at Harvard University named B.F. Skinner showed us how positive reinforcement of behavior worked. He did this by placing a hungry rat in a box, which contained a lever on one side, as the rat moved it would accidentally hit the lever. When it did so, a food pellet would drop into the box. The rat quickly learned to go straight to the lever and hit it: the reward reinforced the behavior. Skinner introduced a new school of psychology called behaviorism, which sees human behavior as a function of incentives and rewards.

On the internet, behavior is measurable. It doesn’t know how you feel, but it knows if and when you clicked. Almost all e-businesses are trying to learn how to persuade us to click, spend time, and buy stuff on their websites. The websites that want to sell you stuff, the forms that push you towards one decision over another and the apps that ask your attention are all being researched and ultimately designed to hack the human brain. Websites like Booking.com experiment with small things like colors, images, text font, etc. in order to find out what leads us to book a room and what does not.

Skinner’s insights in behavioral design are being used to pump us with dopamine and to keep us returning to an app or website. Within apps, users are triggered into certain behavior. A trigger is effective only when the person is highly motivated, or when the task is very easy. For example, after watching a show on Netflix, its so called Post-Play feature makes sure the next episode plays automatically, unless you tell it to stop. In this situation motivation is high, because the last episode left you hungry for more. The level of difficulty is reduced to less than zero, it is actually harder to stop than to keep watching. In similar situations in which a task is easy and motivation is high, people become very responsive to triggers like the vibration of a smartphone, Facebook’s red dot, the email from Aliexpress featuring a time-limited offer on your favorite tech.

Behavior design may seem innocent, because it’s mostly just clicking and tapping on screens. But what happens when you put the principles into an entire global economy? Then it’s all about power. The more influence big companies have on our behavior, the less control we have over ourselves. Companies tell us that they are just getting better at giving people what they want. But the average person checks their phone 50 times a day. Is that a conscious choice? With big data companies are getting better at getting people to make the choices they want them to make. Is this ethical? Are we in need of a set of rules that will diminish the tech giants’ power in order to protect own choice? Does own choice even exist?

We can all leave the vicious circle of incentive and reward, but few of us choose to. It is just so much easier to accept and connect. If we are captives of persuasive technologies, then we are willing ones.

 

References

https://www.1843magazine.com/features/the-scientists-who-make-apps-addictive

http://www.npo.nl/vpro-tegenlicht/25-09-2016/VPWON_1257581

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