I'm not quite as pessimistic on the food delivery market as you are and would be interested to hear your/others' reactions.

>Food delivery platforms will get centralized. [...] Because consumers want that. It's more convenient. And probably network effects apply here.

I agree consumers want all restaurants in the same place. I'm less convinced that that implies platform consolidation because every party has incentives towards multi-tenanting to ensure access. Both restaurants and end customers have incentives towards multi-tenanting to reach each other and for a market-making DSP to demand exclusivity, they have to undermine the core thing both sides of the market want (access to supply/demand). A16Z has a good discussion of multi-tenanting as a limit to the economic value of network effects here [0].

> With food delivery centralized, Dark, big centralized kitchens will win over restaurants(for most popular meals). They're just cheaper.

I agree there are cost efficiencies to dark kitchens and the delivery market is likely to trend that direction (cheaper real estate, leaner front of house, less decoration work, etc). It's not clear to me, though, that there are worthwhile economies of SCALE to be had here (at least in the core urban market), or that they're necessarily winning.

* Ingredients are low-margin, with prices dominated by transportation, so bargaining power over suppliers is limited.

* Delivery time matters. That's a small pro for large kitchens because you can more accurately forecast demand/staffing, but also a medium-sized con because 5 locations spread out in a city with 20 units of capacity each are more likely to be close to demand than 1 location with 100 units of capacity.

* Cooks aren't fungible, which makes it hard to capitalize on scale without consolidating similar restaurants. The guy who makes my favorite lamb vindaloo is a TERRIBLE sushi chef (in fact, he doesn't even make a very good a saag paneer, imho). If he were trained, he could probably learn to make a mediocre pad thai, but I'd probably still be happier ordering from a known thai restaurant. With 70% annual turnover in the restaurant industry[1], you're going to need to pay for a lot of training to capitalize on the more predictable staffing by supporting a large (i.e. multirestaurant) menu without sacrificing quality. If you plan to support a small menu at scale (e.g. combining a NY borough's worth of Indian restaurants into one giant Indian kitchen), the demand you'll need to support it will be spread out over a borough, so you're likely to have difficulty maintaining service levels.

* People have different tastes in food and there's value in variety. I probably have a neighbor who really likes my restaurant's saag. If you merged the two Indian restaurants near me, had an expert pick the best recipe for each dish on their menus, then taught those to the combined kitchen staff, either my neighbor or I would be disappointed in the saag.

>Long term, making delivered food isn't a good place for a small business. And that'll happen with subsidies or without.

Without subsidies, this ultimately depends on whether it's harder to make good food or to build awareness of said food. A restaurant can hire a delivery driver to transport food, which puts a cap on the cut a DSP can demand from them for the delivery portion of their service. It's slightly less efficient, but trivial to implement. The expensive/hard part is getting people to place orders before your lease runs out. If there are multiple DSPs willing to list your food in order to sell their own delivery services, that seems like a recipe for lower start-up costs, which would tend to favor pop-up restaurants/Kitchen Incubators/iteration at small scale relative to the classic sit-down storefront restaurant model.

[0] https://a16z.com/2019/05/09/data-network-effects-moats/
[1] https://guide.michelin.com/us/en/illinois/chicago/article/fe...