A 20-30% gross margin is incredibly thin. It&#x27;s smaller than brick and mortar retail, which is widely considered one of the most competitive industries. The vast majority of companies that operate on margins like this have low $&#x2F;sq ft retail or warehouse space that they operate out of, pay employees at or below market salaries, and do many other things to keep overhead costs low. I don&#x27;t know any details on Instacart&#x27;s operations, they could be incredibly thrifty in how they spend money.<p>However, the vast majority of startups operating in the on-demand space have offices in downtown SF, one of the most expensive&#x2F;sq ft places in the country to open an office. Additionally, engineer salaries in SF are averaging &gt;$150,000&#x2F;yr. Contract this with Amazon, a retail giant (&lt;35% gm) who has yet to turn a real profit and is operating at a scale most startups can only dream of achieving. Amazon based their operations in significantly cheaper Seattle, and Bezos started the company giving every employee a desk make out of old doors and 2&quot;x4&quot;s to instill a culture of thriftiness into the core of the company. Sorry, but I just don&#x27;t see how many of these on-demand startups can really make it when they are spending money at the rate they are with the cut (margin) they are taking.