IPOs for DoorDash and Instacart Reveal Two Very Different Set of Expectations for Food and Wealth Distribution

In the next little while, DoorDash and Instacart are going public. One delivers prepared meals from restaurants and the other delivers groceries. When they go public, it'll make hundreds of people rich. Over the next decade, they might create wealth for hundreds of thousands.

The stock market is a great device. One of my great thrills was standing "on" the first stock exchange in the world. There is a walking bridge in Amsterdam that people cross as they exit the train station to go downtown. That is where people used to stand if they were interested in buying or selling shares of Dutch East India Company stock. When the Dutch emigrated to North America, they built another stock exchange in New Amsterdam, on the street by the wall. The Dutch created both the first stock exchange and - in a place now called New York - the world's largest stock exchange.

The stock market is a most excellent device for creating wealth. A company that distributed food the way it distributes wealth, though. would have some problems.

As late as 1990, the top 1% had 22% of the nation's wealth. In this century, their share has gone up, ranging from 25 to 33 percent.

By contrast, in the last decade the bottom 50 percent have had a share ranging from only 0.3% to 1.4% of the total. (Yes. 0.3%. Less than one percent. For half the country.)

"How is your new meal delivery service doing?"
"Oh, it's great. We're delivering more meals than ever."
"How many customers do you get per night?"
"We usually deliver about 100 meals to 100 different homes each night."
"Wow. That seems very equitable. Each home gets one meal?"
"No. It varies. A lot."
"How is that?"
"Well Jeff is one of our regulars. We usually deliver about 25 to 33 of the meals to him."
"But you only deliver 100 meals. What happens to the other customers?"
"Well, they have to share. We have about 50 customers who share one meal each evening."
"How does that work out?"
"Oh, we get some complaints but I think that most people are impressed that we've increased the number of meals that we're delivering. We've nearly tripled the number."
"But mostly to Jeff."
"Well, sure. For now at least."

Henry Ford's genius was not that he invented the car or even the assembly line. Ford's genius was that he figured out how to make cars so affordable (and middle-class workers so productive) that Ford ended up delivering cars to a percentage of Americans no one thought possible only decades earlier. In 1900, there was about one car for every ten thousand Americans; by the 1960s, there was about one car for every two Americans. That's what progress looks like.

We are still at the pre-Henry Ford stage of wealth creation. We know how to create wealth but don't yet know how to ramp up its production to mass manufacture and deliver wealth to a wider market. It would be most excellent if we could figure out how to deliver wealth to the other 50%. You can bet that DoorDash is going to be worth more if they work out a delivery algorithm that does better than delivering 30% of their meals to Jeff. So will our capital markets.