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Another unicorn that can only exist because it uses fake self-employment to turn their workforce into a cheaper one. Just like Uber and so many others this onl

Another unicorn that can only exist because it uses fake self-employment to turn their workforce into a cheaper one. Just like Uber and so many others this only works because for some reason turning paid work into something that is not even self-sustaining suddenly is accepted. Does nobody have ethical issues with seeing value in devaluing people?

mattmanser 9y ago
While I agree this self-employed farce has to stop, the service itself is good. Previously takeaways were all the more greasy options, the deliveroo options are nicer food and it's aimed at a different market segment. It allows venues access to a market that was previously denied to them because they couldn't justify running their own delivery service full-time. They charge £2.50 per delivery. If they were paying couriers minimum wage I assume they'd be able to make money off it still. I think that price probably includes the high risk that the self-employed status will be rescinded.
- dnh44 9y ago
  Deliveroo also take 30% of the food sale so I always assumed the £2.50 went to the rider, which seems like decent amount.
  - mattmanser 9y ago
    Yeah, I forgot to say that. 30% is very similar to just eat's take too. Seeing as the minimum order is invariably £10, the minimum take for deliveroo is £5 per order, but I'm guessing it's usually more like £7-£10. They'll definitely still be able to make money after a change in status.
    - badestrand 9y ago
      Where have you got that 30% number from? I am pretty sure it was around 10% four years ago in most parts of western Europe and it would surprise me seeing it tripled.
      - mattmanser 9y ago
        Oh yeah, no idea why I got 30% stuck in my head.
  - mvc 9y ago
    Are they going to make people use their local restaurant 30% more? Otherwise it's just eating the restaurant's profits (pardon the pun).
    - jasoncartwright 9y ago
      30% to remove the tables & waiting staff (plus toilets, waiting area) for those customers? Seems like a decent deal.
      - mvc 9y ago
        Only if you never want to eat out or be waited on now and again.
  - pbhjpbhj 9y ago
    Wow, 30%? So restaurants that use deliveroo I should be able to ask for at least a 20% discount for collecting food? Sounds like Groupon's modus, once the restaurants realise they're giving away such a large part of their profits surely they stop using them? Isn't it cheaper to have your own delivery people? Edit: Thinking about it, if I order pizza for £20, the company adds £2.50 for delivery. So £8.50 is being spent on delivery (?) .. a normal taxi is about £5 for that trip; an Uber or similar must be cheaper still?
    - manarth 9y ago
      a normal taxi is about £5 for that trip; an Uber or similar must be cheaper Uber's fares are subsidised (59%) by their VC funding [1], so they make a poor long-term comparison. Expect them to either corner the market, at which point fares go up, or run out of runway. [1] https://motherboard.vice.com/en_us/article/9a3vye/uber-true-cost-uh-oh https://motherboard.vice.com/en_us/article/9a3vye/uber-true-...
      - T2_t2 9y ago
        The source of that article - https://www.nakedcapitalism.com/2016/11/can-uber-ever-deliver-part-one-understanding-ubers-bleak-operating-economics.html https://www.nakedcapitalism.com/2016/11/can-uber-ever-delive... - makes no sense to me. The cost of sales and operating expenses seem non-sensical. What are Uber's cost of sale? What are it's operating expenses? How are they different? If Uber takes a 20% cut, the only cost of sale I can't see is credit card costs. Everything else - including servers - is just an operating expense. More than likely the lifetime value of a ride sharing customer is huge, so rather than subsidising riders, they are likely front loading acquisition costs, and hoping to make it back in lifetime value. That seems to me a pretty darned solid strategy.
- gaius 9y ago
  While I agree this self-employed farce has to stop, the service itself is good I think they are having issues then with scaling out - I've used Deliveroo a grand total of 3 times, all for restaurants that I know are about a mile from my house, every time Deliveroo have been 45-60 minutes after their estimated time, the food was cold and it would literally have been quicker to walk to the restaurant, eat, and walk home. Anecdata I know but I don't see how they can make it work without hiring a lot more people. And this business can only work financially if they don't.
CPLX 9y ago
While I strongly agree with your overall sentiment it's worth noting that this is not a new startup-developed characteristic. The people driving FedEx delivery trucks to your office are independent contractors too.
- deleted 9y ago
  [deleted]
- toomuchtodo 9y ago
  Fedex settled for hundreds of millions of dollars for misclassifying Ground delivery truck drivers as independent contractors. http://mobile.reuters.com/article/amp/idUSKCN0Z229Q http://mobile.reuters.com/article/amp/idUSKCN0Z229Q
- erdle 9y ago
  Some Fedex Ground routes are awarded to independent companies, as in a local company that bids on the region or route. But it's not all Fedex deliveries and I can't vouch for every company that has one of theses routes as to the employment status of their drivers. And as far as I know, Fedex is not giving our Ground routes to individual contractors. And as far as I know Fedex Express is not handled by any outside contractors. Express and Ground are essentially 2 separate businesses within Fedex.
rrivers 9y ago
Are gig economies the problem (and the companies that create them) or are they an inevitability? I''d argue the latter, especially as the wave of automation that is foreseeable in the very near future will displace more people. Companies are going to innovate but what we are witnessing now is innovation that under the current market economy ) this innovation "devalues" people. Perhaps the solution is better legislation and regulation of business to support this new, growing, and likely inevitable shift towards a gig economy and the people who operate within the sphere.
- mschuster91 9y ago
  > and likely inevitable shift towards a gig economy The "gig economy" scam must be stopped before it's too late. It is not "innovation", but pure exploitation. As for automation, tax robots and distribute the profits to the people made jobless by them.
  - icebraining 9y ago
    What would "tax robots" entail? Fixed amount per machine? A percentage of profits per machine? Is there a concrete proposal you have in mind?
- maxerickson 9y ago
  It's a problem if they are flouting employment law in order to "innovate".
z3t4 9y ago
And when they want to increase their margins, guess who's gonna get cut !? The long game is to replace all manual work with self driving/flying drones. But for that to ever happen, those who are now carrying out manual work need to demand more, so it becomes economical to actually replace them.
skrebbel 9y ago
It's even worse than Uber. With Uber, at least you can drive for multiple companies at the same time. If you want to bike for both Deliveroo and, say, Foodora you need to first go home and swap one branded backpack for the other. (Not sure if that's an international thing - here in NL the delivery people use bikes and have branded backpacks)
- BillinghamJ 9y ago
  In the UK, it’s very common to see riders with a wide mix of differently branded clothing, bikes, boxes, etc. Very common for them to be working for Uber Eats, Deliveroo, Jinn, Etefy, etc. all at the same time There may be some kind of rule around consistent branding, but I have never seen it enforced.
  - triplesec 9y ago
    I've never seen this but that is really interesting. I'm surprised they don't prevent them from doing that but I'm glad that they don't
pveierland 9y ago
It feels as if the devaluation and irony is pushed further by Uber using the profits from human workers to invest in autonomous vehicles which will directly eliminate the same workers. Deliveroo doesn't seem to currently invest in robotics research, but other companies such as https://www.starship.xyz/for-businesses/ https://www.starship.xyz/for-businesses/ are pursuing autonomous delivery.
thisisit 9y ago
Is it even cheap? Uber's cost is more than what it seems: https://motherboard.vice.com/en_us/article/9a3vye/uber-true-cost-uh-oh https://motherboard.vice.com/en_us/article/9a3vye/uber-true-... So while it is cheap from a customer's perspective someone else is footing the bill. Once they run out of investor's money someone has to pay for it. In India, drivers are already demanding more bonuses. They went on strike: https://yourstory.com/2017/02/bengaluru-drivers-indefinite-strike-against-ola-and-uber/ https://yourstory.com/2017/02/bengaluru-drivers-indefinite-s... Now they are building their own ride hailing app: https://yourstory.com/2017/03/disappointed-ola-uber-drivers-unite-start-own-app/ https://yourstory.com/2017/03/disappointed-ola-uber-drivers-...
rce 9y ago
Delivering food is not a high value activity. Most people are only willing to pay a few dollars to have food delivered to them. If you raise the cost of employing low skill workers then many of these business models cease to exist. It's hard to survive on very low wages. That's one reason we have a social safety net. Many argue that it should be the company's responsibility to pay their workers higher wages and not society's responsibility to take care of unskilled members of society. However, this is not a realistic option in all cases because some fraction of these jobs would cease to exist if higher wages are mandated as not all customers will be willing to pay higher prices. In the food delivery case it's a large fraction of customers and the business will probably cease to exist. The fundamental problem here is that our economy is becoming more advanced and more and different skills are being required to be able to provide value to society and many people don't have the required skills. There are only a few things that can happen in this scenario: society educates low skill residents to prepare them for more valuable jobs, low skill residents work in low value jobs, low skill residents are unemployed. We should make the education option available and highly encouraged. We should provide for necessities like nutrition, safety, shelter that many young people are lacking that prevent them from availing themselves of educational opportunities. However, in the case that people aren't willing or able to complete the education required for jobs requiring a highly educated workforce, I think it's better that people have the option of working in lower value jobs rather than effectively outlawing it. This does not mean these workers should be treated as having low value beyond being paid low wages. There should be worker protections, customers should treat workers with respect, etc. It would be better for the world if we had more people working in more valuable jobs like science, medicine, technology, etc. and fewer in food delivery. But raising wage regulations to the point that Deliveroo's business model is no longer sustainable probably just means that its workers are unemployed and people have fewer food delivery options.
- tolien 9y ago
  > If you raise the cost of employing low skill workers then many of these business models cease to exist. At risk of getting into a discussion about UBI and tax doctrine, is that a bad thing? The business doesn't have a right to exist. If it can't operate without paying its staff below-subsistence wages, why should it (or the VCs who provide it funding) expect the state (read: other taxpayers) to subsidise that? Regarding your second point I'd argue the money would be better diverted to providing the education to raise the overall skill level of the economy rather than enabling people to work menial jobs that will (in the case of Deliveroo, Uber, et al) be automated away anyway.
Fricken 9y ago
I was a bicycle messenger for a little under a year a little over a decade ago. While the pay was shit, it was the most fun I ever had working a job. It didn't even feel like a job, it felt like a big game. If there was any kind of bike based delivery service in my city that allowed me to work casually, I would do it just for an excuse to go out and dodge traffic on a bike a few evenings a week.

mattmanser 9y ago

While I agree this self-employed farce has to stop, the service itself is good. Previously takeaways were all the more greasy options, the deliveroo options are nicer food and it's aimed at a different market segment. It allows venues access to a market that was previously denied to them because they couldn't justify running their own delivery service full-time. They charge £2.50 per delivery. If they were paying couriers minimum wage I assume they'd be able to make money off it still. I think that price probably includes the high risk that the self-employed status will be rescinded.

dnh44 9y ago
Deliveroo also take 30% of the food sale so I always assumed the £2.50 went to the rider, which seems like decent amount.
- mattmanser 9y ago
  Yeah, I forgot to say that. 30% is very similar to just eat's take too. Seeing as the minimum order is invariably £10, the minimum take for deliveroo is £5 per order, but I'm guessing it's usually more like £7-£10. They'll definitely still be able to make money after a change in status.
  - badestrand 9y ago
    Where have you got that 30% number from? I am pretty sure it was around 10% four years ago in most parts of western Europe and it would surprise me seeing it tripled.
    - mattmanser 9y ago
      Oh yeah, no idea why I got 30% stuck in my head.
- mvc 9y ago
  Are they going to make people use their local restaurant 30% more? Otherwise it's just eating the restaurant's profits (pardon the pun).
  - jasoncartwright 9y ago
    30% to remove the tables & waiting staff (plus toilets, waiting area) for those customers? Seems like a decent deal.
    - mvc 9y ago
      Only if you never want to eat out or be waited on now and again.
- pbhjpbhj 9y ago
  Wow, 30%? So restaurants that use deliveroo I should be able to ask for at least a 20% discount for collecting food? Sounds like Groupon's modus, once the restaurants realise they're giving away such a large part of their profits surely they stop using them? Isn't it cheaper to have your own delivery people? Edit: Thinking about it, if I order pizza for £20, the company adds £2.50 for delivery. So £8.50 is being spent on delivery (?) .. a normal taxi is about £5 for that trip; an Uber or similar must be cheaper still?
  - manarth 9y ago
    a normal taxi is about £5 for that trip; an Uber or similar must be cheaper Uber's fares are subsidised (59%) by their VC funding [1], so they make a poor long-term comparison. Expect them to either corner the market, at which point fares go up, or run out of runway. [1] https://motherboard.vice.com/en_us/article/9a3vye/uber-true-cost-uh-oh https://motherboard.vice.com/en_us/article/9a3vye/uber-true-...
    - T2_t2 9y ago
      The source of that article - https://www.nakedcapitalism.com/2016/11/can-uber-ever-deliver-part-one-understanding-ubers-bleak-operating-economics.html https://www.nakedcapitalism.com/2016/11/can-uber-ever-delive... - makes no sense to me. The cost of sales and operating expenses seem non-sensical. What are Uber's cost of sale? What are it's operating expenses? How are they different? If Uber takes a 20% cut, the only cost of sale I can't see is credit card costs. Everything else - including servers - is just an operating expense. More than likely the lifetime value of a ride sharing customer is huge, so rather than subsidising riders, they are likely front loading acquisition costs, and hoping to make it back in lifetime value. That seems to me a pretty darned solid strategy.
gaius 9y ago
While I agree this self-employed farce has to stop, the service itself is good I think they are having issues then with scaling out - I've used Deliveroo a grand total of 3 times, all for restaurants that I know are about a mile from my house, every time Deliveroo have been 45-60 minutes after their estimated time, the food was cold and it would literally have been quicker to walk to the restaurant, eat, and walk home. Anecdata I know but I don't see how they can make it work without hiring a lot more people. And this business can only work financially if they don't.

CPLX 9y ago

While I strongly agree with your overall sentiment it's worth noting that this is not a new startup-developed characteristic. The people driving FedEx delivery trucks to your office are independent contractors too.

deleted 9y ago
[deleted]
toomuchtodo 9y ago
Fedex settled for hundreds of millions of dollars for misclassifying Ground delivery truck drivers as independent contractors. http://mobile.reuters.com/article/amp/idUSKCN0Z229Q http://mobile.reuters.com/article/amp/idUSKCN0Z229Q
erdle 9y ago
Some Fedex Ground routes are awarded to independent companies, as in a local company that bids on the region or route. But it's not all Fedex deliveries and I can't vouch for every company that has one of theses routes as to the employment status of their drivers. And as far as I know, Fedex is not giving our Ground routes to individual contractors. And as far as I know Fedex Express is not handled by any outside contractors. Express and Ground are essentially 2 separate businesses within Fedex.

rrivers 9y ago

Are gig economies the problem (and the companies that create them) or are they an inevitability? I''d argue the latter, especially as the wave of automation that is foreseeable in the very near future will displace more people. Companies are going to innovate but what we are witnessing now is innovation that under the current market economy ) this innovation "devalues" people. Perhaps the solution is better legislation and regulation of business to support this new, growing, and likely inevitable shift towards a gig economy and the people who operate within the sphere.

mschuster91 9y ago
> and likely inevitable shift towards a gig economy The "gig economy" scam must be stopped before it's too late. It is not "innovation", but pure exploitation. As for automation, tax robots and distribute the profits to the people made jobless by them.
- icebraining 9y ago
  What would "tax robots" entail? Fixed amount per machine? A percentage of profits per machine? Is there a concrete proposal you have in mind?
maxerickson 9y ago
It's a problem if they are flouting employment law in order to "innovate".

z3t4 9y ago

And when they want to increase their margins, guess who's gonna get cut !? The long game is to replace all manual work with self driving/flying drones. But for that to ever happen, those who are now carrying out manual work need to demand more, so it becomes economical to actually replace them.

skrebbel 9y ago

It's even worse than Uber. With Uber, at least you can drive for multiple companies at the same time. If you want to bike for both Deliveroo and, say, Foodora you need to first go home and swap one branded backpack for the other. (Not sure if that's an international thing - here in NL the delivery people use bikes and have branded backpacks)

BillinghamJ 9y ago
In the UK, it’s very common to see riders with a wide mix of differently branded clothing, bikes, boxes, etc. Very common for them to be working for Uber Eats, Deliveroo, Jinn, Etefy, etc. all at the same time There may be some kind of rule around consistent branding, but I have never seen it enforced.
- triplesec 9y ago
  I've never seen this but that is really interesting. I'm surprised they don't prevent them from doing that but I'm glad that they don't

pveierland 9y ago

It feels as if the devaluation and irony is pushed further by Uber using the profits from human workers to invest in autonomous vehicles which will directly eliminate the same workers. Deliveroo doesn't seem to currently invest in robotics research, but other companies such as https://www.starship.xyz/for-businesses/ https://www.starship.xyz/for-businesses/ are pursuing autonomous delivery.

thisisit 9y ago

Is it even cheap? Uber's cost is more than what it seems: https://motherboard.vice.com/en_us/article/9a3vye/uber-true-cost-uh-oh https://motherboard.vice.com/en_us/article/9a3vye/uber-true-... So while it is cheap from a customer's perspective someone else is footing the bill. Once they run out of investor's money someone has to pay for it. In India, drivers are already demanding more bonuses. They went on strike: https://yourstory.com/2017/02/bengaluru-drivers-indefinite-strike-against-ola-and-uber/ https://yourstory.com/2017/02/bengaluru-drivers-indefinite-s... Now they are building their own ride hailing app: https://yourstory.com/2017/03/disappointed-ola-uber-drivers-unite-start-own-app/ https://yourstory.com/2017/03/disappointed-ola-uber-drivers-...

rce 9y ago

Delivering food is not a high value activity. Most people are only willing to pay a few dollars to have food delivered to them. If you raise the cost of employing low skill workers then many of these business models cease to exist. It's hard to survive on very low wages. That's one reason we have a social safety net. Many argue that it should be the company's responsibility to pay their workers higher wages and not society's responsibility to take care of unskilled members of society. However, this is not a realistic option in all cases because some fraction of these jobs would cease to exist if higher wages are mandated as not all customers will be willing to pay higher prices. In the food delivery case it's a large fraction of customers and the business will probably cease to exist. The fundamental problem here is that our economy is becoming more advanced and more and different skills are being required to be able to provide value to society and many people don't have the required skills. There are only a few things that can happen in this scenario: society educates low skill residents to prepare them for more valuable jobs, low skill residents work in low value jobs, low skill residents are unemployed. We should make the education option available and highly encouraged. We should provide for necessities like nutrition, safety, shelter that many young people are lacking that prevent them from availing themselves of educational opportunities. However, in the case that people aren't willing or able to complete the education required for jobs requiring a highly educated workforce, I think it's better that people have the option of working in lower value jobs rather than effectively outlawing it. This does not mean these workers should be treated as having low value beyond being paid low wages. There should be worker protections, customers should treat workers with respect, etc. It would be better for the world if we had more people working in more valuable jobs like science, medicine, technology, etc. and fewer in food delivery. But raising wage regulations to the point that Deliveroo's business model is no longer sustainable probably just means that its workers are unemployed and people have fewer food delivery options.

tolien 9y ago
> If you raise the cost of employing low skill workers then many of these business models cease to exist. At risk of getting into a discussion about UBI and tax doctrine, is that a bad thing? The business doesn't have a right to exist. If it can't operate without paying its staff below-subsistence wages, why should it (or the VCs who provide it funding) expect the state (read: other taxpayers) to subsidise that? Regarding your second point I'd argue the money would be better diverted to providing the education to raise the overall skill level of the economy rather than enabling people to work menial jobs that will (in the case of Deliveroo, Uber, et al) be automated away anyway.

Fricken 9y ago

I was a bicycle messenger for a little under a year a little over a decade ago. While the pay was shit, it was the most fun I ever had working a job. It didn't even feel like a job, it felt like a big game. If there was any kind of bike based delivery service in my city that allowed me to work casually, I would do it just for an excuse to go out and dodge traffic on a bike a few evenings a week.