This example is not a hypothetical. The meal-kit company Blue Apron revealed before its public offering that the company was spending about $460 to recruit each new member, despite making less than $400 per customer. From afar, the company looked like a powerhouse. But from a unit-economics standpoint—that is, by looking at the difference between customer value and customer cost—Blue Apron wasn’t a “company” so much as a dual-subsidy stream: first, sponsoring cooks by refusing to raise prices on ingredients to a break-even level; and second, by enriching podcast producers. Little surprise, then, that since Blue Apron went public, the firm’s valuation has crashed by more than 95 percent. - Derek Thompson, The Millennial Urban Lifestyle Is About to Get More Expensive, The Atlantic
I don't usually do much news commentary but I've been skeptical of the gig-economy and mommy-services for ages.
The bigger question for me has, how did Silicon Valley start-ups manage to fleece investors for this long? The example that jumps to my mind is MoviePass, which was hemorrhaging money so fast that it went as far as to change user passwords to keep users from using its service. Many of these services existed as a "hack" via legal shenanigans. Labor laws are catching up, as Gavin Newsom signed AB 5.
When these services actually charge what it costs to use them, like eScooters, or have the double-whammy of having to raise prices to be profitable and content with actually employing the people they're exploiting and be profitable, it's going to be brutal. Many customers will be priced out from food delivery to ride-hailing services. They'll be just like the services they "disrupted" but only with a nicer app to show for it.