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Deliveroo, and really any gig-economy services, have a real problem — their largest markets are also the ones with significant cost-of-living issues affecting b
by nness 3y ago
Deliveroo, and really any gig-economy services, have a real problem — their largest markets are also the ones with significant cost-of-living issues affecting both riders and customers. Customers are spending less, especially in London, and riders need are being priced out of the market (reducing the supply of riders across a number of competing apps.)
There was a trending tiktok by economist Kyla Scanlon on the topic of "subsidizing affluence" and how these services were able to be offered so cheap because of incredibly low interest rates and investment. Rates have risen dramatically, affecting both the appetite of debt for start-ups and the spending power of consumers. Shareholders recognised this, and it showed through Deliveroo's historically bad IPO.
Ultimately, I suspect Deliveroo will continue to underpay (relative to the cost-of-living) because of the poverty trap — poor people don't have many options, and being underpaid as a Deliveroo rider may be the only option for survival in London and other similarly major cities.
- mytailorisrich 3y agoThe issue with companies like Deliveroo is more basic than that: It's plainly profitability of the business model, irrespective of interest rates (which are blamed for anything and everything lately) At the moment the whole business model, and any plausible path to profitability, relies on squeezing riders as much as possible because (1) they are the main cost, (2) they have very low productivity (number of deliveries per hour), and (3) customers do not want to pay that much for delivery. Fees paid by customers have increased, and restaurants also often charge a different, higher price when ordering through Deliveroo and maybe this is getting to the limit of what the market will bear... So there is not much wiggle room.
- jpl56 3y agoIf I'm having dinner in a quiet restaurant, I wouldn't accept to wait for the cooks to serve Deliveroo/Uber orders instead of taking care of mine. In France, some restaurants give a 10% discount if you order take away. But I hope they don't do it for deliveries through these companies. This lowers the global quality level. You can't have the same quality with one cook and 10 tables than one cook, 10 tables and 50 deliveries per hour.
- mytailorisrich 3y agoThat's for the restaurant to decide, it's not a Deliveroo issue. Some do not accept Deliveroo orders when they are too busy.
- bawolff 3y ago> You can't have the same quality with one cook and 10 tables than one cook, 10 tables and 50 deliveries per hour. I mean, the solution is fairly obvious - hire more cooks if you are serving more food. Resturants will either handle this properly or quickly go out of business.
- CogitoCogito 3y agoI’d expect them to just limit the number of take out orders so that they could handle it. Food establishments already do this.
- Animats 3y agoFor a while, the solution seemed to be "ghost kitchens" - central commissary operations that pretend to be restaurants in their ads. The first Doordash Kitchen is in Redwood City, CA, near the intersection of Woodside Road and El Camino Real. It seems to be much less busy than it used to be. That industry has collapsed.[1] [1] https://www.cnn.com/2023/12/05/business/ghost-kitchens-were-supposed-to-be-the-future-of-fast-food-theyre-flaming-out/index.html https://www.cnn.com/2023/12/05/business/ghost-kitchens-were-...
- pjerem 3y agoMore cooks = bigger kitchen which is impossible in tiny restaurants of city centers. I also doubt it’s a good decision to invest in bigger real estate and more employees while the delivery companies are always on the edge of going bankrupt or being regulated. Also, a restaurant is not an easy to scale business : most of their value is a mix between the location and the cooking team. You can’t easily change one (or both) without changing your restaurant uniqueness.
- bawolff 3y ago