Deliveroo Is Killing, Not Saving The Restaurant Trade

Vaunted teal meals on wheels unicorn, Deliveroo has claimed this week that they'll generate 70,000 new jobs in the restaurant trade and help bring the industry back to its former glory thanks to huge new investment across the UK. Thank god. More bikes, fewer employment contracts, and less human interaction - just what the kangaroo ordered.

News outlets are lapping this up - hopping on the story and dishing up praise for this loveable London-based gang of food delivery aficionados.

But I take serious issue with the company for a variety of reasons.

Delivery Drivers Are Worthless

This is essentially their slogan. Delivery drivers are essentially paid less than minimum wage and are reduced to dodging traffic on peddle bikes, while moving food across our cities.

Restaurant Prices, Takeaway Quality

The food at a restaurant is only one part of the puzzle. Aside from the atmosphere of a place, the expertise of your waiting staff, and quality of interaction you can have in-person, your food should be expertly-crafted and served up fresh from the kitchen.

Deliveroo forces restaurants to shove food into containers ready to be slung across the city and yet still charge you full-whack! Insanity.

This is a race to mediocrity. A race to generalisation. If you run a restaurant slapping Deliveroo on to your offering diminishes the quality of your brand because you're subtly telling your customers that coming to your place isn't as important as convenience.

Centralisation of Resource

The idea that 70k jobs will magically appear in the industry thanks to the amazing investment by Deliveroo is pure fantasy. As a restauranteur it makes little sense to pay for a city-centre spot if you're just sending food out on bikes.

As larger chains increase their investment in delivery it makes sense to create centralised production kitchens. This will happen at scale and drive down the number of high-quality jobs generated.

A Venture and Nothing More

Venture capital is a thing. Like it or loathe it, people with money to spare will always want to see it grow.

But as with many new companies, Deliveroo's profits are almost non-existent and laughable when compared to their turnover. In-fact last year losses soared 43% and yet thanks to the fact that people will always want food to their door, they continued to grow.

If you don't make a profit, you shouldn't be in business. When the economy turns businesses that don't generate money turn too. You don't need an MBA to understand this.

But...

Customer needs will always win and the market is clearly voting for Deliveroo. Their service is slick and thanks to Amazon's hefty investment they have plenty of runway.

I don't like the business, but that won't stop it succeeding.

I just hope people don't forget to go outside once in a while.

Published by

Tom

http://fulltimeninja.com/tom