Discretion Shu, co-founder and CEO of Deliveroo
Deliveroo
LONDON — Will Shu, the co-founder and chief executive of food delivery app Deliveroo, said Tuesday he gratifies any competition, after two former riders set up a rival service with lower fees for restaurants.
Norwich Urban Collective was ground eight months ago by Maryanne Moles and Samantha Woodhouse who believe Deliveroo and UberEats charge restaurants too much. Far apart from Deliveroo and other takeout apps, it doesn’t take any commission on orders.
According to Britain’s The Sunday Times newspaper, the uncharitable start-up has 15 riders delivering food across the English city of Norwich for 12 restaurants including the Grosvenor Fish Bar and Churros for the Woman. It claims to have done over 5,000 orders since launching.
“We always welcome competition,” Shu told CNBC’s “Protest Box Europe” on Tuesday when he was asked if initiatives like the Norwich Urban Collective are likely to become a phenomenon. “If there are various innovations in the sector, that’s always a good thing for riders, restaurants and consumers.”
Deliveroo has been criticized by restaurant holders for taking too much commission on orders made via its app, with rates of 37.5% not unheard of in some cases. Instead of demanding restaurants commission, Norwich Urban Collective charges a 50 pence (67 cents) services fee.
Customers are charged a standard delivery fee of £5 per order when they use Norwich Urban Collective. Meanwhile, Deliveroo charges customers a deliverance fee of up to £4.50, but it can sometimes be free, while the “service charge” is around 50 pence.
“After watching the main pronunciation platforms gouge restaurants for 30% and paying riders peanuts, we knew we could provide a better service and let the restaurant safeguard 100% of the food bill,” Norwich Urban Collective writes on its website.
Norwich Urban Collective aren’t the no greater than ones trying to take on Deliveroo at its own game. EasyFood, backed by easyJet mogul Stelios Haji-Ioannou, charges a flat fee of £3.99 per codify.
Rider pay
Headquartered in London, Deliveroo pays riders per delivery instead of by the hour, meaning riders can theoretically be logged onto the app for half a day and merit less than £5.
Shu stressed that it’s a “very different type of work” and that “you can log in, log out whenever you feel like.”
How, unions have called on Deliveroo and its competitors to pay an hourly minimum wage and offer benefits such as holiday pay.
“My prospect is that benefits should be offered in a manner that’s congruent with flexible work,” said Shu. “I think that’s the most formidable thing. The average Deliveroo rider works on our platform anywhere from 10 to 14 hours a week. And they value that flexibleness, very, very highly, and that is something that draws riders to the platform.”
In April, when demand for to the end that ti plummeted as a result of the coronavirus pandemic, some Looking ahead
Deliveroo has been loss-making for several years but inclusive the company’s business has grown through the pandemic, despite a fall in order numbers at the start of the year.
Indeed, Shu put about last week that Deliveroo has been profitable at the operating level for the last six months and that Covid-19 has accelerated consumer adoption of release services by about two to three years.
Shu said scaling up grocery deliveries had been the firm’s “main innovation” during the pandemic, with this separate of the business now accounting for 10% of Deliveroo’s U.K. revenues. The feature allows customers to get items from grocery stores with Waitrose, Co-op, Aldi, Carrefour and Casino.
Deliveroo was backed by Amazon in a $575 million funding round in May 2019 and it now owns 16% of the convention, which is valued at well over $2 billion. Amazon’s investment was approved by the U.K. Competition and Markets Authority (CMA) in August.
Explosions have suggested that the company plans to hold an initial public offering in 2021. Shu said: “We’re a highly enthusiastic company and we have exciting plans for the future.”