The main advantage of hyperlocal delivery for the customer is reducing the delivery duration, but it's not limited to hyperlocal business now as even Amazon is able to deliver the same day by shipping from warehouses within the city or from a seller within the city.
The reason why hyperlocal delivery business struggle to make money like @Trevor said is because traditional ecommerce e.g. Amazon work with minimum margin but at large scale, sellers/manufacturers pass on the savings from not having their own distribution and logistics to the buyers in Amazon. A hyperlocal businesses don't have advantage of scale when they start as they are limited to a locality and they can't have markup over something which you can walk up to a shop and get it for lesser price. So usually hyperlocal businesses, especially groceries and essentials loose lot of money during initial years till they setup their own source (e.g. farms), get their logistics fine tuned while scaling up to other cities.
A city only ecommerce, sourcing items from local shops such as books, electronics, sports goods etc. cannot price the item as competitively as an ecommerce sourcing items directly from the sellers/manufacturers.