Tech firms are realizing they need to make money, which has millennials wondering if they should just pick up their own dinner.
The cost for so-called gig economy services, including food delivery apps, is going up. That's because the price presented for the last several years really didn't reflect the behind-the-scenes cost.
Instead, the start-ups willingly lost money in an effort to build customers.
The New York Times dubs it the "Millennial Lifestyle Subsidy." The paper says ride service Uber, laundry services, valet apps, even the electric scooters, used discounts to ensure customers didn't feel sticker shock.
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MoviePass is a notorious illustration of this: they offered unlimited theater visits for a flat-fee, but the card often didn't work as the company didn't have enough cash to cover the cost of those countless tickets.
Another example: DoorDash at one point only charging $16 for a $24 pizza.
Times author Kevin Roose writes "many of the daily activities of big-city 20 to 30 somethings were being quietly underwritten by Silicon Valley venture capitalists." He enjoyed having his dirty clothes picked up, cleaned, and returned.
But no more.
Those investors eventually need to see a profit, which means prices are starting to rise, including on those ubiquitous electric scooters.
Bird raised its rental price from a dollar to start and 15 cents a minute to $1.42 a minute in some cities. It went from losing $9.66 on every $10 transaction in 2019 to $1.43 in profit in the last half of 2020.
So, getting that unique Airbnb or convenient Lyft might start costing more like a traditional hotel or taxi these days. Already Uber has trimmed its losses from $3 billion last year to $108 million in the first quarter.
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