Close Ad

The Spoon

Daily news and analysis about the food tech revolution

deliveroo

Deliveroo Is Running a Reusable Container Program in Paris

Deliveroo France and circular-packaging company barePack have started offering customers of the delivery service the option to get their food delivered in reusable containers, according to a report from Green Queen. Around 60 of Deliveroo’s restaurant partners are already participants in the program, which is live in Paris with plans to expand to other areas of France in the future. The program is also available to customers in the London area.

Deliveroo and Singapore-based barePack first partnered in 2020 to bring the reusable container option to customers in that city-state.

The Paris deal is similar. Deliveroo customers wanting their meals in reusable containers must first download the barePack app and sign up for a monthly or yearly subscription, which go for about $2.43 and $23 USD, respectively. The barePack app will provide a passcode users can enter into their Deliveroo account that then allows them to select the barePack option from participating restaurants at no additional charge. 

Customers can return containers to any restaurant participating in the Deliveroo-barePack Paris program. All containers are professionally washed and returned to the circular system. 

Deliveroo is the first major delivery service to offer a program for reusable containers. While 60 restaurants in a single city is only the smallest of dents, it’s nonetheless a dent in the world’s restaurant trash problem. If the Paris program is successful, it could bode well for reusables throughout the rest of Europe, where serves multiple countries, including the Netherlands, Italy, Spain, and its home country, the U.K. The company also operates in Australia, Hong Kong, Kuwait, and the UAE. 

No delivery service in the U.S. has yet to implement a widespread reusables program, though the hope is that a company as large as Deliveroo could wield a certain amount of influence over others. DeliverZero is a smaller operation that offers reusable packaging in parts of the U.S., and Dishcraft offers its own “containers as a service” program for restaurants. Some chains, including McDonald’s and Burger King, are working with TerraCycle’s circular packaging business Loop in the U.S. and elsewhere.

Is Deliveroo’s IPO a Turning Point for Third-Party Delivery’s Labor Force?

This is the web version of our Restaurant Tech newsletter. Sign up for the best news and analysis of the alternative protein market.

U.K.-based Deliveroo is the latest third-party delivery service getting ready to debut on the public market, with plans to go public in early April. As usual, the move comes with the standard buffet of controversies surrounding third-party delivery services, particularly those around pay and protections for workers actually doing the last mile of the food delivery. Unlike usual, the labor issue is actually making would-be investors think twice this time.

Six major U.K. investors, including Aberdeen Standard, BMO Global, and Aviva Investors, said last week that they will not participate in Deliveroo’s initial public market, citing working conditions for the delivery service’s couriers and drivers. 

Like DoorDash, Uber Eats, and others, Deliveroo classifies the folks doing the actual food delivery as independent contractors, and therefore isn’t required to offer minimum wage, paid time off, or paid sick leave. As we’ve written ad nauseam, this is problematic for many reasons, not the least of which is that many workers struggle to make a living wage off these delivery gigs, as evidenced by a recent report from the Bureau of Investigative Journalism that found some Deliveroo riders earn as little as £2 ($2.76 USD) per hour during a shift.

What’s turning investors off, however, is more than just an ethical issue. Some apparently see a business built on gig workers as a risky model because of the regulatory scrutiny that model is getting of late, at least in the U.K. and in Europe. Case in point: Uber recently lost a fight against the U.K. supreme court and must now classify its drivers as employees, not independent contractors. For now, that doesn’t impact the company’s Eats business, but it’s been enough to, in the words of investment forecasters, “dampen the mood” around Deliveroo’s IPO. 

Deliveroo itself admitted in its investment prospectus that having to reclassify its workers as employees would have a “material impact” on the business. Part of the reason third-party services, including Deliveroo, have been able to achieve such high valuations in the past is because their businesses are built off the idea of minimizing labor costs. Paying drivers a minimum wage and other benefits eats into those costs, and puts the idea of steady profitability further out of reach. Additionally, Deliveroo suggested having to change its worker classifications would also impact its ability to operate in certain markets. 

The chances of Deliveroo having to reclassify its workers seems high. Just Eat Takeaway.com, another major food delivery service in the U.K. and Europe, as already pledged to do away with the gig worker model. The aforementioned Uber fight with the U.K. supreme court also doesn’t bode well for Deliveroo.

What is yet to be determined is whether this will have a ripple effect across the pond. Some recent events, like California passing Prop 22 in November of last year, seem to suggest gig workers are losing the fight against third-party delivery. On the other hand, Just Eat Takeaway.com has plans to acquire U.S.-based Grubhub, which means it may eventually bring its employee-based model Stateside.

Right now there seem to be more questions than answers surrounding the fate of third-party delivery services. But as more countries and governments take a harder stance against the gig-worker model, and as more investors think twice before backing such ventures, we may finally start to see the balance of power start to shift in favor of the folks on whose backs these businesses are actually built.

Restaurant Tech ‘Round the Web

Starbucks aims to become carbon neutral with its coffee by 2030, the company said this week. The Seattle-based coffee giant says it will do this with things like precision agronomy and climate-resistant coffee plant varieties.

Yum Brands, parent company of KFC, Pizza Hut, and Taco Bell, has acquired omnichannel solutions company Tictuk Technologies. Tictuk is known for its “conversational commerce,” which will allow customers to place food orders via social media, SMS, email, and many other formats. 

Restaurant Group Brinker International this week announced a Google Maps and Google Search integration for the company’s It’s Just Wings virtual brand, in a bid to further digitize the off-premises experience.

Major Investors Avoid Deliveroo, Citing Concerns Over Worker Treatment

Ahead of Deliveroo’s initial public offering next week, six major investors in the U.K. say they will not buy shares of the third-party delivery service, citing concerns over the way the company treats workers. Additionally, hundreds of couriers plan to refuse making deliveries when the company starts trading next week, according to a report from Bloomberg.

Aberdeen Standard, Aviva Investors, BMO Global, CCLA, LGIM, and M&G said they would not participate in the Deliveroo IPO due to the working conditions for Deliveroo drivers and couriers. 

Like other third-party delivery services, including U.S.-based Uber Eats, Grubhub, and DoorDash, Deliveroo classifies its workers as contractors. In doing so, the company does not have to pay things like minimum wage or sick leave. 

Investor concerns come the same week the Bureau of Investigative Journalism published a report that found Deliveroo riders can earn as little as £2 per hour during their shifts. The analysis is based on “thousands of invoices from more than 300 riders over the past year.”

A BMO Global portfolio manager told Bloomberg that the workers’ rights issue “is too big a hurdle for me to take any risks with my clients’ capital today.” He added that there are “better business models” out there than the gig-economy one used by Deliveroo, Uber Eats, and others. 

One alternative model is that of Just Eat Takeaway.com, which has pledged to move away from gig workers recently in order to classify its drivers and couriers as employees. Uber, meanwhile, was recently forced to reclassify its workers as employees in the U.K., after a supreme court case in February, although for now the decision does not apply to the company’s Eats’ business. 

Deliveroo may at some point be forced to do the same. In February, the European Commission launched an initial consultation on conditions for gig-economy workers and is planning to draw up legislation that would govern how the gig economy works in the EU.

That potential legislation also makes Deliveroo a bigger risk for investors. “If Deliveroo is forced to change the way it classifies its riders in the future, it is likely to puncture its profits prospects, and could even derail the delivery giant,” the company said in documents outlining its IPO plans. It has set aside over £112 million to cover the potential legal costs around how the company classifies its workers. 

Deliveroo Raises $180M, Nabs $7B Valuation

Deliveroo announced this week it has raised over $180 million in Series H funding from existing investors. The round was led by Durable Capital Partners LP and Fidelity Management and Research Company LLC. With it, Deliveroo is now valued at over $7 billion, according to an official company statement. 

The new funds come ahead of Deliveroo’s initial public offering, which is expected to happen in the next few months.

The London, U.K.-based company said it would use the new funds to “further drive growth and enhancements to its services for restaurants, riders and consumers.” Examples of those areas include expanding Editions, Deliveroo’s delivery-only kitchen sites, expanding its grocery delivery service, and expanding its Plus subscription service. The company also said it would offer more restaurants its Signature service, which lets customers order via a restaurant’s own website.

It’s a shift from several months ago, when Deliveroo had to cut 15 percent of its staff in response to the pandemic. Also around that time, U.K. regulatory watchdog the Competition and Markets Authority approved Amazon’s highly scrutinized investment into Deliveroo, saying the delivery business could collapse without the funds. 

But, like other third-party delivery services around the world, Deliveroo has wound up faring very well so far throughout the pandemic. Will Shu, Deliveroo’s founder, told The Guardian in December that COVID-19 had “accelerated consumer adoption of food delivery services by about two or three years,” and that order volumes for the service in the U.K. and Ireland were double those of 2019. In the same interview, Shu also said his company had been profitable “at the operating level” for about six months.  

Currently, Deliveroo operates in 12 countries, including a number of Western European nations as well as Singapore, Australia, and the United Arab Emirates. Its main competitor, Just Eat Takeaway.com, operates in many of the same markets.

Deliveroo and Waitrose Launch a 30-Minute Grocery Delivery Trial

Following similar recent moves from other third-party delivery services, Deliveroo is expanding its presence in the world of online grocery shopping. At the tail-end of last week, grocery chain Waitrose announced it will pilot a 12-week program with Deliveroo to get groceries to customers around the UK in as little as 30 minutes.

The news comes just as Waitrose’s longstanding deal with online grocery retailer Ocado comes to an end. From Tuesday, September 1, Ocado will instead deliver groceries from Waitrose rival Marks & Spencer. 

Deliveroo will ferry more than 500 Waitrose items to customers “in as little as 30 minutes,” according to the Waitrose press release. Customers will be able to place orders via Deliveroo from one hour after the shop opens to one hour before it closes. Waitrose says the partnership is meant to “compliment” its own two-hour grocery delivery service.

The Guardian noted over the weekend that Waitrose has seen more than 100,000 extra orders for online groceries since the UK’s pandemic-induced lockdown started. Online grocery orders across the UK have almost doubled thanks to the pandemic. It’s a similar story to what the U.S. is currently experiencing where grocery e-commerce sales hit $7.2 billion in June.

Given all that, it’s no surprise that third-party restaurant delivery services like Deliveroo are diversifying their sales channels to include grocery. Deliveroo, in particular, has struggled to keep business strong during the pandemic as restaurants shutter permanently. For example, the Competition and Markets Authority (CMA), the UK’s antitrust watchdog, finally approved Deliveroo’s long-scrutinized deal with Amazon on the grounds that Deliveroo would have had to exit the UK food delivery market without the Seattle giant’s investment.

Adding more grocery services is one way to make up for some of the lost restaurant sales. New sales channels may also give third-party delivery services a fighting chance a profitability, something that keeps getting eroded by fee caps, battles over worker classification, and other regulatory issues.

It’s a narrative we’re familiar with in the U.S., too. Uber Eats now delivers groceries, and DoorDash just announced its own grocery delivery service in addition to its partnerships with convenience stores.

The initial Deliveroo-Waitrose trial, which also starts September 1, will serve about half a million households and, if successful, will extend to more locations in the future.

UK Regulators Finally Approve Amazon’s 16% Stake in Deliveroo

The UK’s Competition Markets and Authority (CMA) has at last approved Amazon’s 16 percent minority stake in food delivery service Deliveroo. The CMA’s findings, released today, note that the proposed Amazon-Deliveroo deal “has not resulted, and may not be expected to result, in a substantial lessening of competition (SLC) within a market or markets in the United Kingdom (UK) for goods and services.”

That concern — that Amazon’s investment in Deliveroo would lessen competition and consumer choices along with it — has hindered the investment since it was first announced back in May of 2019. For a quick recap, here’s how the saga has played out since then:

  • May 2019: Amazon announces its participation as the largest investor in Deliveroo’s $575 million Series G funding round.
  • July 2019: The CMA opens an investigation into Amazon’s investment, saying there were “reasonable grounds” that such a deal would mean the two companies would “cease to be distinct.”
  • October 2019: The CMA launches a formal probe into the deal.
  • April 2020: The deal gets initial approval, with the CMA citing “significant decline in revenues” for Deliveroo thanks to the pandemic.
  • June 2020: Regulators grant provisional clearance of the deal.

With this final approval, the CMA did warn Amazon that that increasing equity ownership of Deliveroo could result in further investigation, according to CNBC.

The approval comes at a time when consolidation is rampant among third-party food delivery services worldwide. The CMA finally approved the Takeaway.com’s acquisition of Just Eat, a deal that has created the largest food delivery service outside of China. The newly formed Just Eat Takeaway.com then swooped up Grubhub. Uber Eats, meanwhile, had been looking to buy Grubhub but backed away from such a deal in part because of the regulatory scrutiny the move would raise. Instead, it acquired Postmates in July.

With the pandemic still wrecking much havoc on the restaurant industry, we will probably see more of this consolidation — and probably a good deal of scrutiny, too — before the year is out.

The Good, the Bad, and the Ugly of Deliveroo’s New Table Service Feature

U.K.-based food delivery service Deliveroo launched a new feature this week that sounds convenient on the surface but could cause some problems for more than one party in the restaurant biz. This “Table Service” feature, as it’s dubbed, is meant “to help restaurants reopen safely to dine-in customers and help the recovery of the sector,” according to a company blog post. The feature is available on July 15.

In terms of how it works, the feature is simple: Customers sit down at the cafe, restaurant, or bar, pull up the existing Deliveroo app, and order their food with the Table Service feature, rather than directly interfacing with a server. Payment also happens in the app, so that all the restaurant staff (theoretically) have to do is cook the food and bring it out to the table.

Here’s the good of this new way of operating dining rooms:

If you’re an existing Deliveroo user, it’s convenient. You don’t have to download yet-another mobile ordering app, and since this is table service, not delivery, the extra fees third-party services tack onto orders should be minimal. Deliveroo also said in its blog post it will charge zero commission fee to the restaurant on these orders.

Without a doubt, there is also a level of social distancing built into this concept that will be safer for both restaurants and customers. Being able to sit down and order a meal from your phone gets rid of long lines and crowding near a cash register, and it does, to a degree, minimize customer-to-server interactions.

But on that note, here’s what’s less awesome about Deliveroo’s new feature:

It’s not as socially distanced as the hype would have you believe. Someone has to run the food and be available to refill drinks or assist if there is a problem with the meal. (“I said fries, not salad!”)

This isn’t a Deliveroo-specific problem. All restaurants and restaurant tech solutions have to account for the fact that in any sit-down dining experience, you can’t get away from at least some customer-to-staff interactions. I don’t think Deliveroo, or any company, is promising to completely eradicate those interactions. The company blog post specifically says “minimising in-person contact.” Even so, it’s something to keep in mind as more companies come to market with these contactless solutions for dining rooms. 

More worrying is what a feature like Deliveroo’s Table Service means for restaurant tech companies. Like I said, tech companies, and even non-tech companies, offering contactless dining room solutions have multiplied in the last several weeks. Sevenrooms, Presto, Zuppler, this signage company, and many others offer restaurants the technical means to let guests order and pay from their phones in the dining room. Paytronix has a system that even lets you keep your virtual “tab” — that is, ticket — open so you can order another round of drinks or dessert without making multiple transactions.

If third-party delivery starts offering order and pay features for the dining room en masse, it could be a serious competitive threat for these companies. 

Most alarming about this new feature is what it means for customer data. Ownership of customer data is already seen as a huge issue with third-party delivery services. If restaurants can’t see data about what their customers are ordering, when they’re doing it, etc., they’re less able to cater to exactly what those customers want when it comes to food. 

Deliveroo owning the customer data in the dining room could potentially mean restaurants wouldn’t get the feedback they need to deliver good service that’s enjoyable and simultaneously safe in this pandemic-stricken era. 

A while back, one restaurant tech CEO told me that the COVID-19 pandemic should be treated as “a wakeup call” for restaurants when it comes to their data. In his view, these restaurants need to “to rethink how they’re connecting digitally with their customers.” This is likely to become even more important going forward as governments encourage contactless technologies in restaurants and more customers gravitate towards using their phones for browsing and buying from restaurant menus.

So before you restaurants go signing up for Deliveroo’s new model for the dining room, consider first your digital relationship to your customers, how you treat your customer data, and, most important, how willing you are to part with it when it comes to the newly reopened dining room. 

U.K. Regulators Grant Provisional Clearance to Amazon’s Highly Scrutinized Deliveroo Investment

The U.K.’s Competition and Markets Authority (CMA) has provisionally cleared Amazon’s 16 percent investment in Deliveroo on the basis that the deal would not likely “damage competition in either restaurant delivery or online convenience grocery delivery,” according to a statement from the CMA.

Amazon was set to be the largest contributor to a $575 million investment announced in May 2019. By July of the same year, British regulators were scrutinizing the deal, claiming there were “reasonable grounds” to suspect that Amazon and Deliveroo would “cease to be distinct” were it to go through. Many months and a pandemic later, the CMA provisionally approved the deal in April 2020. Grounds for approval were that, thanks to the pandemic decimating the restaurant industry, Deliveroo would have had to exit the food delivery market without Amazon’s investment.

Though it seems the stakes are actually less dire for Deliveroo. The CMA said today that it has revised its provisional findings from April and found that “Deliveroo would no longer be likely to exit the market in the absence of this transaction.”

Even so, a lot has changed in the third-party since Amazon first announced its plans to invest in Deliveroo. The biggest development (besides COVID-19) has been Takeaway.com’s acquisition of Just Eat that was approved in April and created one of the largest food delivery companies in the world. That deal alone makes the U.K. food delivery market more competitive, and renders Amazon (a little) less of a behemoth come to gobble up marketshare. Uber Eats also operates in the U.K., as do a handful of smaller players. 

Another concern of the CMA’s was that through its investment, Amazon would cease to be competitive with Deliveroo. Thanks in large part to the Just Eat-Takeaway.com deal, that appears to no longer be the case.

“Looking closely at the size of the shareholding and how it will affect Amazon’s incentives, as well as the competition that the businesses will continue to face in food delivery and convenience groceries, we’ve found that the investment should not have a negative impact on customers,” Stuart McIntosh, Inquiry Chair for the CMA, said in a statement.

The CMA will now ask for views on the new findings by July 10. From there, it will make its final decision, which is due by August 6, 2020.

More COVID-Related Cuts for Food Delivery: Grab Lays Off 5 Percent of Its Workforce

Singapore-based food delivery service Grab is letting go of about 5 percent of its workforce and “winding down” several projects and functions, according to AgFunder News. 

The layoffs are part of Grab’s ongoing struggles with COVID-19’s impact on the global economy. Grab had previously asked its workers to accept decreased hours or take unpaid leave of absence in an effort to avoid having to reduce its workforce. The company also implemented pay cuts for senior management.

But in a letter to staff that was cited by AFN, Grab cofounder and CEL Anthony Tan noted that after trying everything possible to avoid staff reductions, the company now has to accept this reality. “In spite of all this, we recognize that we still have to become leaner as an organization in order to tackle the challenges of the post-pandemic economy,” he said.

Affected employees will receive “enhanced severance payments, expedited equity vesting, extended medical insurance coverage, and access to career advice and mental health support.”

Softbank-backed Grab bills itself as “your everyday everything app.” The company offers on-demand food delivery as well as ride hailing services in about 300 cities across Southeast Asia. 

And it’s hardly the first food delivery service to announce layoffs in the last few months. In India, the two major players in third-party delivery, Swiggy and Zomato, both announced layoffs in May. U.K.-based Deliveroo cut 15 percent of its workforce in April, citing coronavirus’s impact as the reason, and Uber recently laid off employees, including those working for the company’s Eats division.

At the same time, consolidation has come for the food delivery world, most notably in Just Eat Takeaway’s plans to acquire Grubhub. In 2019, Delivery Hero bought South Korean Woowa Bros.’ food delivery service, and Brazil-based iFood merged with Colombian service Domicillios.com.

Layoffs don’t necessarily signal that a company is about to get gobbled up by an acquisition, but the pandemic has certainly caused many on-demand businesses around the world to struggle, cut costs, and become leaner all around. Competition has long been fierce in food delivery, especially in Southeast Asia, where Grab competes with rival Gojek for dominance. Grab’s announced layoffs this week are hardly the last we’ll see in the coming months as the market for on-demand food delivery becomes even more cutthroat.

Zomato Cuts 13 Percent of Its Workforce

Zomato, one of India’s largest third-party food delivery services, is cutting 13 percent of its workforce and requiring the rest of its employees to take a pay cut, according to the Economic Times. Not surprisingly, the moves are in response to the ongoing pandemic and its effect on the food delivery industry in that country. 

Those affected by the layoffs will receive their health benefits as well as half their salary for six months or until they find their next job. In June, the rest of the company will take a temporary pay cut to preserve as much cash as possible. The cuts are expected to be for at least six months.

In an email sent to staff, Zomato founder and CEO Deepinder Goyal wrote that the company is preparing for “things getting worse” in terms of COVID-19 and the simultaneous collapse of the restaurant industry as we know it. He noted that many restaurants in India have already shut down permanently. “I expect the number of restaurants to shrink by 25-40% over the next 6-12 months,” Goyal wrote.

Zomato’s news comes just after Swiggy, it’s chief rival in India, announced layoffs of its own, also in response to COVID-19. Swiggy cut about 1,000 jobs at the end of April, mostly in its ghost kitchen division. This came just weeks after it announced a $43 million Series I fundraise.

It’s not just India, either. Worldwide, third-party delivery services have been making cuts as business gets drastically and negatively impacted by the pandemic and country-wide lockdowns. Deliveroo cut 15 percent of its staff at the end of April. Uber has made layoffs that affect some Eats employees. The company also recently exited eight markets.

Zomato actually bought Uber’s Eats business in India for $206 million at the beginning of March, before the country went into lockdown. Goyal didn’t mention the deal in his letter, which was much more focused on outlining ways in which the company is going to save cash and prepare for things to get way worse before they get better. Seems like the rest of the food delivery industry should do the same.

Deliveroo Lowers Restaurant Commission Fees to 5 Percent, but There’s a Catch

Deliveroo this week said it would lower the commission fees it charges restaurants to just 5 percent — but only on orders where the restaurant provides its own delivery drivers. The announcement comes as restaurants increasingly call for the service to address its steep fees and as Deliveroo’s overall business struggles during the pandemic. 

The UK-based service will also completely waive commission fees on all pickup orders. Both forms of commission relief, if you can call it that, will be in effect until June 5. 

It’s a nice PR gesture, but it doesn’t solve the commission fee problems for restaurants that can’t afford to pay their own delivery fleet. With the restaurant industry currently on the brink of collapse, even paying one or two couriers on bicycles to deliver food could be more than an independent restaurant is realistically able to pay. Third-party services like Deliveroo charge up to 30 percent, and sometimes more, per transaction for these commission fees, which renders any chance at making profit null and void for many restaurants. Dropping commission fees to 5 percent but still expecting restaurants to foot the bill for their own last-mile delivery won’t benefit many businesses.

The ongoing collapse of the restaurant industry has wiped away any lingering optimism that food delivery apps are actually good for restaurants. What was for a brief minute called a “lifeline” for businesses as they pivoted to off-premises orders in the wake of the novel coronavirus is now under scrutiny from the entire industry, and the subject of much debate among governments. Multiple cities in the U.S. have already imposed mandatory caps on commission fees; overseas governments are now considering similar measures.

There’s also the fact that delivery orders won’t save a lot of restaurants. According to a recent survey from the James Beard Foundation, only 1 in 5 restaurant owners believe “with certainty” they will survive the COVID-19 crisis, and two-thirds of them are “uncertain” that off-premises orders will sustain their business. 

Some delivery companies are reportedly gaining business from the collapse, but Deliveroo doesn’t appear to be one of them. Just last week, the service cut 15 percent of its staff and furloughed others. The company said the cuts are in response to coronavirus. The UK’s Competition and Markets Authority recently approved a major investment in the service from Amazon, citing Deliveroo’s “significant decline in revenues” as reason for the approval.  

A smart piece from The Guardian’s James Ball last weekend noted that the entire (and heavily venture-backed) third-party delivery system is based on optimism. “Without that optimism, and the accompanying free-flowing money to power through astronomical losses, the entire system breaks down.”

The current state of Deliveroo could be a hint of how other third-party delivery services will weather the pandemic. Meantime, restaurants that need help making deliveries will still be paying the service those astronomical commission fees.  

Deliveroo Cuts 15% of Staff in Response to Coronavirus

UK-based food delivery service Deliveroo confirmed that it is cutting roughly 15 percent of its staff — a little over 350 people — and furloughing others, according to a report from The Telegraph. 

Fifty employees will be furloughed in addition to the layoffs. Deliveroo did not specify which roles it was cutting or which regions.  

A Deliveroo spokesperson confirmed to TechCrunch that the cuts are in response to the coronavirus pandemic, which is wrecking havoc on the restaurant industry. “This requires us to look at how we operate in order to reduce long-term costs, which sadly means some roles are at risk of redundancy and others will be put on furlough,” the spokesperson said.   

While off-premises orders — delivery and takeout — were initially hailed as the one major lifeline restaurants would have during this crisis, the reality is that many restaurants have struggled with the switch to this format. Others, including major QSR chains in the UK, have shut down completely for the time being.

Deliveroo’s cuts come just days after the UK’s Competition and Markets Authority (CMA) approved Amazon’s investment in the service. The deal had been under investigation before the pandemic. In its decision, the CMA suggested the third-party delivery service could collapse without the extra funds from Amazon.

Demand for delivery has dropped in the UK, likely in response to the economic uncertainty caused by the pandemic. With more people out of work and no real idea of when the pandemic will subside, if it will resurface, and what life will look like in two, three, or nine months, people are opting to cook at home and save money.

That doesn’t bode well for the food delivery sector, which already struggles with profitability. 

U.S.-based food delivery services have yet to make any major cuts like this, though it’s not out of the realm of possibility if things remain as they are economically or psychologically.