The flaws in the app economy

Innovative start-ups threaten to topple established leaders, but the apps now face being disrupted themselves.

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Will Deliveroo wobble under the strain of a price war?

Venture capital has been pouring into the app economy. New billion-plus companies are being minted all the time and smart entrepreneurs are making fortunes for the investors savvy enough to back them early. But beware: the sector looks like it's beginning to wobble. Last week, shares in online estate agency Purplebricks plunged more than 40%, and it reshuffled its management after missing its revenue forecasts. In the same week, Uber Eats, the food-delivery arm of the massive taxi company, started a price war with rivals such as Deliveroo and Just Eat, opening up its platform to lots more restaurants and cutting the fees it charges for using the service. Just Eat's shares fell 5% on the news. Over in the US, shares in Dropbox came under pressure as it reported figures that disappointed the market as more rivals pile into the online file-storage industry.

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Matthew Lynn

Matthew Lynn is a columnist for Bloomberg, and writes weekly commentary syndicated in papers such as the Daily Telegraph, Die Welt, the Sydney Morning Herald, the South China Morning Post and the Miami Herald. He is also an associate editor of Spectator Business, and a regular contributor to The Spectator. Before that, he worked for the business section of the Sunday Times for ten years. 

He has written books on finance and financial topics, including Bust: Greece, The Euro and The Sovereign Debt Crisis and The Long Depression: The Slump of 2008 to 2031. Matthew is also the author of the Death Force series of military thrillers and the founder of Lume Books, an independent publisher.