Platform Capital Sclerosis
As of today, Tuesday 6th May, Deliveroo has been acquired by Doordash in a deal worth £2.9 billion. Having written about Deliveroo and the struggles of platform workers for almost a decade now, I thought it might be useful to offer some brief contextual thoughts on what the deal represents, and more importantly, what it might mean for the people dragging burgers across London and New York for poverty wages.
Doordash is the largest US food delivery platform. It has a capitalisation of $87 billion and controls more than two thirds of the US market.
Its origin story is so Silicon Valley that it verges on parody. In 2013, three Stanford students set up PaloAltoDelivery.com, and before long they had seed backing from infamous venture capital fund Y Combinator. (For more on the Silicon Valley ecosystem, see Malcom Harris’ magisterial Palo Alto, for more on the structural power and history of venture capital see here and here). By 2019 the platform was the biggest in the US, and in 2020 the company went public with a $3.37 billion IPO. The platform made its first annual profit in 2024. Its list of shareholders reflects the role of US based asset managers in pooling the common stock of the capitalist class. Major institutional shareholders include Vanguard at 9.98%, BlackRock at 6.10%, and Morgan Stanley at 4.80% and the Singapore state wealth fund at 4.86%.
So far, so generic. The model was the same as every other food delivery platform: get venture funding, absorb massive losses to grow market share, gradually drive down delivery worker wages, weather their strikes and protests, extract rents from restaurants, speculate about the automation of food production as a pathway to profitability – whilst actually becoming profitable through hyper exploitation of precarious migrant workers. This is all relatively familiar to anyone who has spent time thinking and reading about the dynamics of platform capitalism.
The new element of the story that Doodash begins to tell is how the monopolistic tendency of platform capitalism plays out on a global scale. Like many platforms, it has attempted to internationalise through direct market entry. But it has also used acquisitions to enter markets without the need to fight existing local platforms for dominance. In 2022, Doordash bought Wolt, a Finnish platform operating in 25 countries (primarily across Scandinavia and Eastern Europe.)
Deliveroo has become the next target for acquisition shortly after posting its own first annual profit. But as the FT’s Lex put it, the platform’s lack of deep-rooted domination in any one market made it ripe for a takeover: “This is a market for deep-pocketed duopolies, not for those ranked third or fourth. Growth is thus about empire building: collecting top slots in as many jurisdictions as possible.”
In any one national market, platforms act as desperate wannabe monopolies. The whole industry lives and dies by Peter Thiel’s rule that “competition is for losers.” They are willing to burn $20 billion plus to take control of a market. Dirty tricks are part of the game. In a 2024 case, Uber claimed Doordash had “coerced restaurants into working exclusively with them by threatening to issue penalties or demote restaurants in the DoorDash app.”
But increasingly the apps are becoming profitable. As market share becomes consolidated, capital valorisation is no longer a distant future prospect. It is interesting to compare how the platform founders used to say they would become profitable with the reality. Early investors were seduced with dreams of automated food production and delivery – but actual profits have only been reached when hyper exploited migrant labourers have had their wages forced down to below subsistence levels. This is not high-tech production, it’s algorithmically-enabled sweated labour.
Platform workers have repeatedly shown that they are very able to contest this exploitation. Massive mobilisations have been achieved over and over again - the challenge they continue to face is creating a form of collective organisation that can endure from once cycle of struggle to the next. There are no simple answers to that challenge.
It strikes me that food delivery platforms represent a mode of operation somewhat analogous to the emerging Trumpian political economy. US-based firms are using their resources to stake out territory in a global marketplace defined by the constant looming threat of economic contraction and declining ‘consumer confidence’. They are engaged in a zero sum fight to the death, grappling with each other to find whatever advantage they can. Jamie Merchant’s excellent Endgame, which diagnosed the economic nationalist turn well in advance of events, offers us a way to think about how this competition might play out.
Needless to say, platform capital is not a dynamic global force that could lead to a revival of capital’s fortunes. These platforms extract rent from existing industries and hyper exploit urban surplus populations by using technology to accelerate the informalisation of labour. The colossal valuations of firms like these represents something like the nihilism of the contemporary ruling class. They know this system is rotten, and yet they continue to pump it for all its worth. As Adorno put it, “the bourgeoise live on, like spectres threatening doom.”
The only way to escape that doom is through struggle. Start climbing. One way out!
