DoorDash was selling pizzas from the restaurant for $16 while paying the restaurant $24 per pizza. Bird was losing $27 for every $10 it made on rides.

The Decadence of Venture Capital: How Modern Unicorns Are Bred

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2021-06-30 23:00:08

DoorDash was selling pizzas from the restaurant for $16 while paying the restaurant $24 per pizza. Bird was losing $27 for every $10 it made on rides. There are a lot of examples of companies providing an investor-subsidized service: Uber, Lift, Life, We Work, AirBnB and others. All their “disruption” consisted in selling a dollar for half price.

This article was motivated by an excellent publication in The New York Times with the headline “Farewell, Millennial Lifestyle Subsidy”. The author of this work describes a golden time when everyone rode an extremely cheap Uber, got their laundry delivered by Washio, and their house cleaned by Homejoy. He recalls valets from Luxe and his experience of buying a used car, delivered to him in a giant bow by Beepi at a mystically low price. All these companies provided “investor-subsidized service”. Most of them simply burned tens of millions of venture dollars and closed, the survivors are raising prices.

For years, these subsidies allowed us to live Balenciaga lifestyles on Banana Republic budgets. Collectively, we took millions of cheap Uber and Lyft rides, shuttling ourselves around like bourgeois royalty while splitting the bill with those companies’ investors.