Basic Economic Model of Food Delivery Apps

 This basic economic structure of food delivery apps was constructed in Aguilera et al.’s 2018 paper “L’envers et l’endroit des plateformes de livraison instantanée: Enquête sur les livreurs micro-entrepreneurs à Paris.”

Their profit P is defined as: P = n(tv+p-l) - C

n= Number of meals delivered
t= Commissions taken by restaurants 
v= Average meal value 
p= Revenue from consumers (delivery fee)
C= Costs for the platform (Fixed app development costs and Marketing costs + Salaries of deliverers) 

Though this model, we can see that the only real variable of profit delivery apps can control is the payment of drivers. The others are mostly controlled by exterior forces. P can not be shifted very much as consumers will quickly switch to another app if the delivery fee is too high, and marketing cannot easily be reduced either. By this model, a lot of delivery apps are not even profitable, since consumers do not actually pay the whole cost of remunerating the delivery driver in P. Thus, apps are very resistant to meet deliverer’s claims for higher salaries.