Except it wouldn't be 10% slower for 60% cheaper of their item, it's 60% cheaper for the delivery cost which is a small fraction of the overall cost.

Have you looked up small, light items on Amazon and seen that they pack them up packs of large N? They do that to hide the fact that delivery is actually a very large fraction of cost on such items. Food delivery, as mentioned in the OP, is another example.

Exactly - rule of thumb is that about $4 of any small item on Amazon goes to Amazon. That seven dollar cable is really at best a $3 cable, including costs to get the item to Amazon in the first place.

This is unintuivite at first, but makes sense. As we approach last mile, economies of scale begin to not only diminish, but invert.

Let me put it another way... it's very inefficient to move cargo by a fleet of cars vs a fleet of trucks, and it's even more efficient to move cargo by train.

But it would be terribly inefficient to move that train to your home. A UPS truck is more efficient than a train, and a guy on a bike might be more efficient than a UPS truck, other than labor.

But if we can get an autonomous vehicle, then the labor goes away, and if the delivery drone is electric, then it can largely be very efficient- going point to point in a straight line.

I hadn't thought about it before, but it makes so much sense.

I doubt the cost for the drone is 0% of the cost of having a guy operate a truck.

Not 0%, but a drone center can have a few people operating many drones, so the labor cost is distributed there too.