Deliveroo

Deliveroo
Private
Traded as Roofoods Limited
Industry
Founded 2013
Founder Will Shu
Headquarters WC1, London, United Kingdom
Area served
Key people
 Will Shu (CEO) and Greg Orlowski
Number of employees
  • Over 13,000 employees (as of November 2016)[1]
  • Around 20,000 technically self-employed couriers (as of September 2016)[2]
Website deliveroo.co.uk

Deliveroo is a British online food delivery company with operations spread across eighty-four cities [3] in the UK, the Netherlands, France, Germany, Belgium, Ireland, Spain, Italy, Australia, Singapore, United Arab Emirates, and Hong Kong. It was founded in London in 2013 by Will Shu (a former economical analyst for S.A.C. Capital Advisors and ESO Capital and former investment banker at Morgan Stanley) and Greg Orlowski (who previously worked as a software developer and as a director of technology) [4]

Orders are placed through its website and then either employed or self-employed [5] bicycle, motorcycle or car couriers transport orders from restaurants to customers.

Business

The company makes money by charging restaurants a commission fee, as well as by charging customers a fee per order.[6]

Early June 2016, the German Hotel and Catering Association (German: Deutscher Hotel- und Gaststättenverband) cautioned for delivery services such as Deliveroo or Foodora (a competitor using almost an identical business model; and at that time almost equally present in Germany), claiming that they attack their value chain without respect. In this warning, the Association wanted to prevent the market for food delivery services starting to resemble that of hotels, where businesses have become dependent on booking portals such as Booking.com or HRS but are unsatisfied with the commission fees required by those portals.[7]

In mid-June 2016, the founders of Deliveroo, Will Shu and Greg Orlowski received an award for the "Best Startup Founders" as part of "The Europas Startup Conference and Awards", which are given to technology companies.[8]

One media article reported that in early August 2016, Deliveroo had 800 employees,[9] while another article of around the same date reported there were 6,500 riders employed by the company.[3] On 8 September 2016, The Financial Times reported that 20,000 self-employed couriers were working for Deliveroo.[2] As of November 2016, one source claimed that over 13,000 people worked at Deliveroo.[1]

Deliveroo's main competitors are Just Eat, GrubHub, UberEATS and Hungryhouse.[10]

Deliveroo provides the delivery service as well as marketing and order taking, allowing it to provide food from restaurants that do not normally offer a delivery service. In a press release of May 2016, the German Bar Association (German: Der Deutsche Anwaltverein) informed the public that delivery companies such as Deliveroo, Take Eat Easy or Foodora are legally responsible for problems about the quality of the food, not the restaurants themselves.[11]

Deliveroo recorded a loss of £1.4m for the year 2015. Mid-November 2016, the company reported a huge loss of £18.1 million for that year.[12][13]

On 16 November 2016 it became known that the brewing company Heineken International had closed a deal for Deliveroo to deliver the latter's beers and ciders, initially across 15 sites in London, Bath and Cardiff. This delivery deal, whose activities started that same week, was considered the biggest one of its kind (that is, with regards to the brewing industry). Further expansion of these activities across the UK were planned by the end of the year 2017.[14][15]

In January 2017, Deliveroo announced plans to create 300 UK tech jobs when it opens its new head office in London later in 2017. The British-born company currently employs more than 1,000 full-time staff.[16]

Technical malfunctions

On 7 September 2016, the Deliveroo website and application crashed in the city of Chelmsford, reportedly due to a high demand on the first night of launching its service in that city.[17]

On Tuesday 1 November 2016, at around 8PM (GMT) technical problems caused the Deliveroo system to be unable to operate for around an hour. Due to this malfunction, both its delivery applications, as well as its website went off-line. Reportedly, thousands of customers who had already paid for their orders got upset, also due to a lack of clear communication being provided by Deliveroo during the crisis. Some customers had to wait for hours to get their food delivered.[18][19][20][21]

Again on 21 January 2017, the Deliveroo app went down due to a server crash, and hundreds of UK customers were delivered cold food, hours late, or even no food at all.[22]

Funding

In June 2014, Deliveroo raised a £2.75 million series A investment round from Index Ventures and Hoxton Ventures, as well as an assortment of angel investors.[23]

In January 2015, Roofoods Ltd, doing business as Deliveroo, received $25 million in series B funding largely from Index Ventures, Hummingbird Ventures and Hoxton Ventures at an estimated valuation of $100 million.[24] At this time Deliveroo was providing deliveries for approximately 750 restaurants.

In July 2015, it secured a further $70 million in series C investment from Index Ventures and Greenoaks Capital. That was Deliveroo's third funding round in a year.

In November 2015, Deliveroo raised $100 million in Series D Funding.[10]

In August 2016, Deliveroo raised a Series E of $275 million from the hedge fund Bridgepoint.[25]

Criticisms

Australian-based employment lawyer Josh Bornstein, principal at Maurice Blackburn, examined work contracts from Deliveroo and its competitor Foodora in late March 2016 and described the contracts as "sham", designed to pay workers "below the award rates" and to "deny their basic benefits".[26]

Law firm Maurice Blackburn announced that test cases against Deliveroo, as well as against Foodora, were being prepared regarding as they were "accused of under-paying their delivery riders and failing to meet minimum employment conditions". Such allegations were confirmed by the Young Workers Centre in Australia, which claimed that the contracting arrangements by those companies left workers without access to minimum pay rates, WorkCover insurance, leave and superannuation.[27] The Centre's "Rights for Riders" campaign aims "to improve safety, pay, conditions and job security for food delivery riders".[28]

Complaints have also been made regarding the company's failure to provide cycle training and safety equipment (such as lights and helmets) to its sometimes inexperienced riders. It has been argued that the need to race against the clock is another reason for risky cycling behaviour exhibited by the couriers; and that bikes should be checked for safety.[29][30]

Strike

Deliveroo's London drivers held a day-long strike in August 2016 to protest a new pay plan that they claimed would result in riders earning substantially below minimum wage,[31][32] and the continuing lack of sick and accident pay.[33][32] The company later abandoned these plans.[34]

During these strikes, as a means of protest, London Deliveroo drivers held up signs containing the neologism "Slaveroo", a term formed as a contraction between "slavery" and the company's name. The term and its corresponding social media hash-tag were adopted by several news outlets, including non-English international media.[35][36][37][38]

In the aftermath of these protests, chair of the Independent Workers Union of Great Britain Couriers and Logistics Branch, which represents couriers and delivery drivers in London, Mags Dewhurst, published an article in The Guardian wherein she backed up the protestors, saying that Deliveroos' claim of freedom and flexibility vis-à-vis its couriers are sham, calling it "exploitation and exhaustion" instead.[39]

On 8 November 2016, news headlines covered the demand of Deliveroo drivers in the United Kingdom to gain rights such as minimum wage and to seek union recognition by the company. The Independent Workers Union of Great Britain (IWGB), representing the drivers in the Camden area of north London, was leading such a campaign in an attempt for Deliveroo to negotiate worker conditions with union representatives.[40][41][42][43]

In mid-November 2016, it was reported that Deliveroo's CEO, Will Shu, almost doubled his salary around the same time that low-paid Deliveroo drivers were demanding better employment conditions. Shu increased his pay to £102,135 in the year to December 2015, from £53,333 the year before that.[13]

References

  1. 1 2 "Deliveroo". Kunden. easyPEP. Retrieved 3 November 2016.
  2. 1 2 O'Connor, Sarah (8 September 2016). "When your boss is an algorithm". The Financial Times. Retrieved 13 November 2016.
  3. 1 2 Sahoo, Sananda (7 August 2016). "Food delivery service Deliveroo aims to expand in Dubai". The National. Retrieved 12 November 2016.
  4. ↑ Deliveroo (4 February 2016). "Introduction to Deliveroo" (PDF). European Commission. Retrieved 12 November 2016.
  5. ↑ Beeger, Britta (26 July 2016). "Die Chancen der „Gig-Economy“. Digitalisierter Arbeitsmarkt". Frankfurter Allgemeine. Retrieved 14 November 2016. Und auch der Essenslieferdienst Deliveroo, der derzeit Fahrer mit großen Thermo-Rucksäcken durch die Großstädte schickt, sucht seinen Stellenausschreibungen zufolge Fahrer, die selbständig oder auf Midijobbasis tätig sind.
  6. ↑ Olson, Parmy (17 February 2016). "Here's How Deliveroo Built An Army Of 5,000 Drivers In Just 3 Years". Forbes. Retrieved 12 November 2016.
  7. ↑ "Die pinkfarbene Verführung". ZEIT ONLINE. 7 June 2016. Retrieved 3 November 2016.
  8. ↑ Butcher, Mike (17 June 2016). "The Europas Awards 2016 honored the best tech startups in Europe". TechCrunch. Retrieved 3 November 2016.
  9. ↑ satariano, Adam Satariano (5 August 2016). "Deliveroo Raises $275 Million to Escalate Food-Delivery Wars". Bloomberg.com. Retrieved 9 August 2016.
  10. 1 2 Davidson, Lauren (23 November 2015). "Deliveroo raises $100m". Tech Crunch. Retrieved 23 November 2015.
  11. ↑ "Foodora, Deliveroo & Co.: Die Rechtslage bei den neuen Lieferdiensten". Ernährung. Deutsche Anwaltauskunft (Das Rechtsportal des Deutschen Anwaltvereins). 6 May 2016. Retrieved 3 November 2016.
  12. ↑ "Deliveroo boss doubled his pay ahead of riders' protest". The Guardian. 11 November 2016. Retrieved 12 November 2016.
  13. 1 2 "Fury as Deliveroo boss nearly doubles his pay while his workers fight for better wages". This is MONEY. 11 November 2016. Retrieved 12 November 2016.
  14. ↑ Ambrose, Jillian (16 November 2016). "Heineken joins Deliveroo to create booze delivery brand". The Telegraph. Business. Retrieved 18 November 2016.
  15. ↑ Arthur, Rachel (17 November 2016). "Deliveroo and Heineken partner to launch beer delivery brand". Beverage Daily. Retrieved 18 November 2016.
  16. ↑ "Deliveroo to add 300 UK tech jobs in new London office". BBC News. 18 January 2017. Retrieved 18 January 2017.
  17. ↑ Brown, Ric (7 September 2016). "Deliveroo website crashes on first night in Chelmsford". EssexLive. Retrieved 13 November 2016.
  18. ↑ "Deliveroo website crashes leaving hungry customers FUMING". Birmingham Mail. 1 November 2016. Retrieved 13 November 2016.
  19. ↑ Gillett, Francesca (1 November 2016). "'London is starving': Hungry Londoners left angry and waiting hours for food after Deliveroo site crashes". EveningStandard. Retrieved 13 November 2016.
  20. ↑ "Hungry people of the nation go into a state of panic as Deliveroo website goes downHungry people of the nation go into a state of panic as Deliveroo website goes down". Bailwick Express. 1 November 2016. Retrieved 13 November 2016.
  21. ↑ Wheatstone, Richard (1 November 2016). "Deliveroo website goes down leaving thousands of hungry customers waiting for their food". Mirror Online.
  22. ↑ "Is Deliveroo growing too quickly?". Daily Mail. 23 January 2017. Retrieved 28 January 2017.
  23. ↑ O'Hear, Steve. "Premium Restaurant Take-Out Platform Deliveroo Raises £2.75M From Index ventures, Hoxton ventures, And Others". TechCrunch. Retrieved 10 May 2016.
  24. ↑ Chapman, Lizette (29 January 2015). "Food-Delivery Startup Deliveroo Picks Up $25 Million in Series B Funding". Daily Telegraph. Retrieved 18 September 2015.
  25. ↑ Lunden, Ingrid; O'Hear, Steve. "Food startup Deliveroo raises $275M as Uber eats into its European market". TechCrunch. Retrieved 5 August 2016.
  26. ↑ Hatch, Patrick (30 March 2016). "Deliveroo and foodora accused of using sham contracts for bicycle delivery riders". The Syndey Morning Herald. Retrieved 3 November 2016.
  27. ↑ "Delivery services Foodora and Deliveroo face claims of exploitation, underpayment". The Syndey Morning Herald. 29 July 2016. Retrieved 3 November 2016.
  28. ↑ Young Workers Centre, Rights for Riders FAQs, accessed 3 January 2017
  29. ↑ Marsh, Grace; Boswell, Josh (5 June 2016). "Deliveroo cyclists are accused of causing mayhem ‘riding against the clock’". The Sunday Times. Retrieved 13 November 2016.
  30. ↑ Laker, Laura (8 November 2016). "Deliveroo criticised for letting inexperienced riders loose without lights". road.cc. Retrieved 13 November 2016.
  31. ↑ Metro.co.uk, Harry Readhead for (11 August 2016). "Deliveroo drivers are on strike all day today in row over pay". Retrieved 16 August 2016.
  32. 1 2 "Deliveroo rider: 'After an accident or injury we are on our own' - Business - The Guardian". 15 August 2016. Archived from the original on 15 August 2016. Retrieved 16 August 2016.
  33. ↑ "Why the Deliveroo strike matters for the future of workers' rights". 12 August 2016. Retrieved 16 August 2016.
  34. ↑ "Deliveroo has scrapped plans to force its ‘absurd’ new contract on staff". 17 August 2016. Retrieved 19 August 2016.
  35. ↑ "London Deliveroo drivers stage protest over 'slaveroo' changes in pay". International Business Times. 11 August 2016. Retrieved 12 November 2016.
  36. ↑ Benfield, Jim (27 October 2016). "#Slaveroo, Industrial Action and Cooperativism: What Does the Future of the Digital Platform Economy Hold?". Novara Media. Retrieved 12 November 2016.
  37. ↑ Signoret, Perinne (12 August 2016). "A Londres, les coursiers de Deliveroo déjà en grève". Libération. Retrieved 12 November 2016.
  38. ↑ van de Wiel, Clara (17 August 2016). "Waarom het succes van de Deliveroo-staking een beetje hoop geeft". Vrij Nederland. Retrieved 12 November 2016.
  39. ↑ Dewhurst, Mags (16 August 2016). "Deliveroo couriers are right to strike: the company’s claims of freedom are a sham". The Guardian. Retrieved 12 November 2016.
  40. ↑ Pitas, Costas (8 November 2016). Addison, Stephen, ed. "After Uber case, UK union pushes for pay deal at Deliveroo". Technology News. REUTERS. Retrieved 13 November 2016.
  41. ↑ Chapman, Ben (8 November 2016). "Deliveroo drivers demand union recognition and minimum wage after Uber workers’ rights ruling". The Independent. Retrieved 13 November 2016.
  42. ↑ Murgia, Madhumita (8 November 2016). "Deliveroo couriers demand union recognition and rights in UK". The Financial Times. Gig Economy. Retrieved 13 November 2016.
  43. ↑ Coleman, Clive (8 November 2016). "Deliveroo riders seek to unionise and gain workers' rights". BBC News. Retrieved 13 November 2016.
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