Workplace

Why is 15-minute delivery everywhere in NYC?

DoorDash is just the latest of at least six companies fighting for the chance to get a can of Red Bull to you in under 15 minutes.

Delivery drivers for Gorillas

Delivery companies are fighting to corner the market on ultra-fast delivery in the United States, starting in Manhattan.

Photo: Gorillas

When we asked delivery companies why anyone would really need 15-minute, ultra-fast delivery in Manhattan, two of them cited running out of diapers as a personal use case. What did parents in New York do before they could drop a wad of cash just to have a personal courier race to their house on a Zoomo e-bike? Who’s to say?

Regardless of how many people really need diapers in 10 minutes, the race to capture the market for ultra-fast delivery is quickly nearing the 25 mile-per-hour speed limit New York has set for e-bikes. In June, two international delivery companies — JOKR and Gorillas — announced ultra-fast delivery in Manhattan, accompanied with full-time employees and company-provided e-bikes. In the early fall, Buyk and Gopuff followed suit with similar business models. DoorDash arrived with its own competing offering on Monday, and Instacart is reportedly preparing the same for early 2022.

Representatives for DoorDash, Gorillas and Gopuff all told Protocol versions of the same one-liner: People expect convenience. They are no longer satisfied with the one-hour-or-less deliveries of the days of yore. Consumers want more, and they want it right now.

And, of course, if you’re a takeout delivery company struggling to survive in New York City, you can’t be the only one to stick with your boring 35 minutes for takeout. Once one company starts becoming your ultra-speedy personal grocery service, everyone has to do the same or risk losing their hard-fought customer base.

“I don’t foresee one winner, especially in New York or the United States. It’s going to be similar to how there are three or four or five different companies to choose from if you want food delivered or if you want food service,” Adam Wacenske, Gorillas’ head of U.S. operations, said. “The pandemic has sort of shown that this quick-delivery model is something that people want, and now it’s starting to really heat up in the U.S.”

DoorDash, one of the later entrants to the space, claims not to be worried about the competition either. Vice president of Public Policy Max Rettig told Protocol that he believes the company’s profits from its core takeout delivery business, plus its experience surveying and listening to consumers, merchants and delivery drivers, should set the company up for success despite coming a bit late to the party.

The design for the ultra-fast model appears to be almost identical for every company.

Step 1: Find a location that’s central to a massive population of people. For DoorDash this week, that location is Manhattan’s Chelsea neighborhood.

Step 2: Find a warehouse-like facility that can serve as a storage and packing location for convenience products and also house a collection of e-bikes. Basically, a ghost bodega. Whether or not you label the facility depends on the company — Gorillas says that all of its locations are noticeable to people walking down the street.

Step 3: Find gig workers who want a full-time job and hire them as employees instead of contractors to do basically the same job they were doing before — only with benefits, regular shifts and company-provided e-bikes and delivery gear. Most of the delivery companies claim that the employee model is the only way to guarantee you will always have enough workers available to make ultra-fast deliveries and keep warehouses stocked. Gopuff has bucked this trend, however, instead hiring employees inside its fulfillment hubs and keeping delivery drivers as contractors.

Step 4: Repeat this until you have identical hubs scattered all over every major city, blanketing the most populous areas in the world.

So far, the ultra-fast delivery model has not been applied to takeout food, and that model is likely still a long way off. Aside from rumors about Domino’s trying to predict when you want pizza before you’ve even decided to place an order, most restaurants cannot take an order and have it ready to go in five minutes, only to then have it at your door in another five to 10.

But the stuff you can buy at CVS or your neighborhood bodega — now that’s an area ripe with opportunities to tap into our deepest consumerist desires. That Ben and Jerry’s pint you didn’t get just because you didn’t want to leave your house? It’s there before you can think twice about whether you really wanted it. That Red Bull you desperately need for a work all-nighter? You’d pay extra just for the 10 minutes it would take to go buy it yourself.

Zach Boisjoly In June, Gorillas announced ultra-fast Manhattan delivery. Photo: Gorillas

“It doesn’t always have to be your weekly groceries on the app. People are starting to order more in real time. It’s eliminating food waste, it’s making it so that you don’t have to plan seven days in advance,” Wacenske said. “I am starting to order each night for dinner; I literally have almost no waste, whereas before I did. The fruit would go bad in a week, the asparagus would go bad.”

Of all the new competitors, Gopuff sees itself as the creator of the “instant needs” market. In 2013, while most companies were focusing on restaurant delivery — or not even envisioned yet, aside from the ill-fated dot-com startup Kozmo — Gopuff was building out a slower version of convenience delivery for college students who wanted late-night snacks. It took eight years of building experience in other cities across the United States, but Gopuff finally entered the speedy Manhattan convenience delivery market in October of this year.

“When we think about our business and what we’ve built, it’s taken eight years in investment in infrastructure,” Daniel Folkman, the senior vice president of business at Gopuff, told Protocol. “A lot of companies that are looking at this space are realizing how operationally complex this space is. A lot of the infrastructure that we’ve built is very difficult to build independently. The access to capital that we have is a competitive advantage as well. You can’t build the infrastructure and categories that we’ve built without substantial funding.”

Wacenske said that Gorillas’ big questions are the same questions grocery stores have to answer — what products do people want and where can they be found for the lowest price. In a lot of ways, these ultra-fast services are more like iterations of the modern grocery store than they are iterations of restaurant takeout delivery. Both Gopuff and Gorillas emphasized the importance of vertical integration: For a successful short-term delivery, the company needs to provide the best and most-desired convenience products immediately and without fail. They need to predict what people will want, and how to get it cheaply.

And when the supply-chain crisis interferes with availability, they need a workaround immediately. At the top of mind for Wacenske on Monday was strawberries. They’re a seasonal produce tough to source for regular grocers at this time of year, and Gorillas is facing the same problem. “Strawberries are incredibly difficult right now. They are out of season. There are certain things that all grocery stores deal with cyclically. And there are certain things we are dealing with as a result of the current conditions,” Wacenske said.

“We need to have the best assortment, and we need to have that every single time a customer goes into the app. When I say the best assortment, that means everything that I want is in stock and it’s there.”

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