Food delivery service Deliveroo has projected a 66% growth in partnered restaurants this year in Ireland alone. Fellow competitors in the meal delivery service Just Eat, Amazon restaurant delivery, Uber Eats and Marvin.ie all expect positive returns as the market continues to grow both within and outside the confines of Dublin.
The fast-paced growth of the meal delivery sector is exemplified by the story of Deliveroo. From its humble origins as a London-based startup in 2013, the founder Will Shu recognised that the volume of restaurants in London were under-served by their delivery solutions.
In response, Shu used a combination of bike, motorbike and van couriers to expand the influence of restaurants far beyond their home-base in central London. As a modern company eager to get an edge over their competitors, the ‘Frank’ algorithm was developed to increased efficiency of order distribution based on the location of restaurants, riders and customers. This was clearly a successful model, as Deliveroo has increased its earnings 650% year on year.
Innovations in Machine Learning
Machine learning is used to predict the amount of time it takes to prepare each meal on average for Deliveroo partners. As a result of this and the Frank algorithm, riders were making more deliveries per hour and increasing earnings, deliveries are now 20% faster, and restaurants have increased their sales by up to 30%.
The company continues to innovate with it’s more recent ‘Editions platform’, which helps restaurants expand to new areas by identifying places under-served by specific cuisines or brands. An expansion of this is the ‘Roobox’, which is a field kitchen without a restaurant front, forming what is essentially a meal distribution centre that only takes 8-12 weeks to set up and cuts on cost by not having a front-of-house. This concept came from a New-York based startup company called Maple, which was acquired by Shu in 2015.
Strike Action by Deliveroo Riders
As is becoming more common with startups in the gig economy, the treatment of employees has been far from perfect. Strike action and legislation in European countries has made the situation less volatile for riders but still far from perfect. Riders are guaranteed set amounts of hours, have the option to be paid as soon as the next day, and agency workers are more readily hired in busy times of year.
Deliveroo is currently expanding its business model by offering unlimited free delivery with a Netflix-like 10.99 per month subscription. The company currently operates in 14 markets in more than 500 towns and cities, and aims to serve 100 million customers and 85,000 restaurants in Europe by the end of 2019.
Uber Eats is a fast-growing competitor which began in 2015 in the US and 2018 in Dublin, Cork, Limerick and Galway all at once. Interest in the taxi company’s food service was already high as more than 30,000 people had downloaded the app before the service was even available. While Uber Eats is separate to the flagship ride-sharing product, it is powered by the same technology. The application tracks delivery, pay, tips with the same account a user uses for Uber, with no need for cash. Just like deliveroo the main thing it offers to customers is the data aggregation to help restaurants target areas and times. Despite its late 2018 launch, Uber Eats now partners with 430 restaurants in Cork, Dublin, Limerick and Galway with its fleet of 900 riders.