One of the things I like about ridesharing and delivery apps is about how they “flatten” some of local real estate markets, which are otherwise extre…

One of the things I like about ridesharing and delivery apps is about how they “flatten” some of local real estate markets, which are otherwise extremely sensitive to differences of a few blocks and, for some businesses, a few tens of feet.

(I think the real estate market doesn’t fully appreciate this yet? Seems to be something where the first movers are going to do quite well for themselves, but relative illiquidity and huge cycle times for real estate mean that might take a while.)

Examples:

A restaurant is two businesses. One is a demand aggregator; it gets sited in expensive commercial real estate because high-demand locations are that. The other is a commercial kitchen; it is in expensive commercial real estate only because has to be collocated.

If the demand aggregator is your listing on an app, then you can put the commercial kitchen anywhere within a bike ride (/etc) of the customer base, which can easily be 1/3rd of the rent. Restaurants budget 25% of gross for rent; that is not a small savings.

Similarly, if you think of “Where would you site an apartment building aimed at single or couple professional?”, that is dominated by access to transit and local amenities... but while six blocks is a long way for that decision it’s ~nothing if you assume availability of apps.