Deliveroo is a food delivery company that serves as an intermediary between customers and restaurants. Using the app, customers place (and pay for) an order, which is then conveyed to the participating restaurant.
When the food is prepared, a Deliveroo courier collects the food and delivers it to the customer in the comfort of their own home, office, or wherever else they’ve chosen. Deliveroo takes a cut of the revenue, and pays the delivery delivery, unless the restaurant carries out its own deliveries.
Deliveroo was founded by Will Shu in 2013. The American (a banking analyst by trade) had recently moved back to London after an MBA, and was shocked at how few of the city’s (many) better restaurants offered delivery. He moved to rectify this by creating Deliveroo, alongside Greg Orlowski.
The pair had attempted something similar a few years before, after Shu initially moved to London and found himself eating from his local supermarket as opposed to the higher-quality takeaways he enjoyed in New York. They were limited by the failure of smartphone technology to match their ambitions, however.
The company’s purported goal is not just to make restaurant quality food more easily accessible – but to kill home cooking altogether (notably Shu claims an omelette is the height of his culinary prowess – so home cooks might want to take that with a pinch of Maldon salt).
The app uses an algorithm (named Frank) to ensure the efficient delivery – aiming to maximise earnings for both restaurant and courier, and minimise customer waiting time. Delivery radius is limited to maintain this level of efficiency, and to encourage people to order from restaurants that are local to them.
Most deliveries are made by a fleet of Deliveroo couriers, who along with Uber drivers are archetypes of the gig economy. Like many other names in the gig economy, Deliveroo has seen its fair share of controversy over workers’ right and pay.
Despite this – or partly because of it – the ‘unicorn’ company has been wildly successful. Indeed, it enjoyed a period as the fastest growing company in Europe. It has expanded into a number of new markets in Europe, Asia, and Australia operating in a total of 12 markets (having left the 13th, Germany, in August 2019).
Deliveroo moved offices in 2017 to Cannon Street in London, and hired 300 new tech staff in a move to build one of the largest tech hubs in the country. Deliveroo also bought Edinburgh-based software company Cultivate in 2019, as part of a move to set up a new tech hub in Scotland. Difficulties arising from the coronavirus pandemic, however, have led Deliveroo to lay off 15% of its staff.
Deliveroo’s troubles, however stem from before this period. It has made a loss on every delivery made since day one. While revenue continues to rise, losses continue to deepen – calling the robustness of the business model into question. After ranking first and second in the Financial Times‘ list of Europe’s fastest growing companies in 2018 and 2019, it completely feel out of the ranking in 2020 (covering 2015-2018).
Investment from Amazon was intended to give Deliveroo a boost in late 2019. The UK Competition and Markets Authority, however, launched an investigation into the investment under anti-monopoly laws. Eventually, provisional approval was given in April 2020 (drawing criticism from rival Just Eat). Much damage, however, was thought to be done by the delay.
Whether Amazon’s $575 million stake will help to improve Deliveroo’s fortunes will be of great interest to many startups and observers. Deliveroo’s collapse coming so soon after its supposed success would stand as a damning indictment of a venture capitalism model predicated on loss.
The coronavirus pandemic of 2020 put additional strain on the company. While we might have expected it to thrive in the circumstances, it seems a considerable proportion of Deliveroo revenue came from big chains. With these shutting their doors, Deliveroo revenue was consequently hit. This gives lie to Deliveroo’s claims that its model centres on independent, local businesses.
We have collected data and statistics on Deliveroo. Read on below to find out more.
Deliveroo key statistics
- Deliveroo generated £1.2 billion revenue in 2020, a 54 percent increase year-on-year
- Deliveroo also reduced its net loss in 2020, from £317 million in 2019 to £223 million in 2020
- There are six million Deliveroo users, mostly in the UK
- Deliveroo lost 31 percent of its value on the first day of its IPO (Bloomberg)
|Launch date||February 2013|
|People||Will Shu (founder, CEO)|
|Business type||Public (LON: ROO)|
Sources: Deliveroo, Financial Times
Deliveroo gross transaction value
|2020 (IPO)||$10.5 billion|
Deliveroo UK market share
Want to learn more? Check out our food delivery report
How many countries does Deliveroo operate in?
Deliveroo currently operates in 12 countries
How many riders work for Deliveroo?
Deliveroo has over 100,000 couriers working for it, the majority of which are based in the UK
How much do riders earn on average?
According to Indeed, Deliveroo drivers earn between £7.71 and £13.89 per hour in the UK (Indeed)
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