In a commentary, SMU Professor of Marketing Nirmalya Kumar discussed the persistent profitability challenges faced by gig economy firms, particularly ride-sharing and food delivery apps. While companies like Grab have projected positive free cash flow for 2024, the business model remains problematic due to high competition, limited pricing power, and consumer expectations of low-cost delivery. Prof Kumar highlighted issues such as environmental impact, labour exploitation, and the difficulty of monetising customer data through advertising. He opined that achieving long-term profitability in this sector remains an uphill battle.
