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Deliveroo raises $385M in new funding

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Re: Deliveroo raises $385M in new funding

#121

Post by martinald »

georgespencer wrote: post #31
Zenst wrote: post #11

Earlier quoted context omitted.

£128.56m in sales last year, and a loss of £129m. So very much curious how they managed such a valuation without over-hype.

For a crowd who presumably work in startups, folks on here are always weirdly surprised by how this works. Generate vast revenue, reach scale, cut central costs. (To be clear, Deliveroo's challenge seems to be cost of sales.)

Well, it's a pretty huge loss (more than revenue!

Also, I think people were surprised or amazed that they had no core profitability. Especially when it's likely COGS will go up with more and more regulation around their gig economy employees

Re: Deliveroo raises $385M in new funding

#122

Post by Doctor_Fegg »

arthurfm wrote: post #49
amyboyd wrote: post #20

Earlier quoted context omitted.

What makes you think Just-Eat ran out of steam "years ago"? Stock price is higher than ever: http://www.londonstockexchange.com/exchange/prices-and-marke... They are reporting good growth: http://www.cityam.com/256734/just-eat-reported-order-growth-... I see lots of Deliveroo bikes around where I live in the centre of London, but they are basically non-existant when I go to other towns and cities. Also, Deliveroo sta…

> I see lots of Deliveroo bikes around where I live in the centre of London, but they are basically non-existent when I go to other towns and cities. Whenever I visit Oxford I always see lots of Deliveroo bikes driving around the city centre.

Yes. Same in the (little, Midlands) city of Worcester, and some decent enough restaurants too. If they've cracked Worcester then they're very far from being London-only.

Re: Deliveroo raises $385M in new funding

#123

Post by T2_t2 »

manarth wrote: post #110
pbhjpbhj wrote: post #62

Earlier quoted context omitted.

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 spe…

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-...

The source of that article - 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.

Re: Deliveroo raises $385M in new funding

#124

Post by danielfoster »

sleavey wrote: post #103
ue_ wrote: post #73

Earlier quoted context omitted.

You say that Deliveroo has shitty working conditions and I probably don't disagree (I know nothing of them), but I'm a second year university student and I'm being pressured to find a job by my parents while I'm here; Deliveroo seems like my best bet at the moment with flexible hours; I probably wouldn't be making any more than minimum wage elsewhere anyway. I hope that's some insight as to why it's attractive to som…

That's the crux of this whole gig economy debate - for some people, these kinds of jobs are ideal: zero hours contracts, with the ability to work more or less depending on what else is going on in your life. That being said, some people take these jobs because they're the only ones they can get. I don't know your circumstances, so I'm going to guess here, but from what you write it sounds like you have the safety net…

Companies like Uber and Deliveroo have become a full-time job of last resort for many people, even though they may have been intended only as part-time gigs. Isn't it technically society's fault, and not Deliveroo's or Uber's, that no other full-time employment exists?

People working in the gig economy deserve a safety net and also deserve better pay, but you can't solely blame Taskrabbit, Uber or Deliveroo for these issues.

Re: Deliveroo raises $385M in new funding

#125

Post by wott »

mbrookes wrote: post #6

What have Deliveroo done differently to be more successful than the food delivery startups that came before?

Nothing, they just managed to convince more investors to continue pouring tens and hundreds of millions in the hole of their losses, while others were rightfully let to die.

Re: Deliveroo raises $385M in new funding

#126

Post by T2_t2 »

martinald wrote: post #121
georgespencer wrote: post #31

Earlier quoted context omitted.

For a crowd who presumably work in startups, folks on here are always weirdly surprised by how this works. Generate vast revenue, reach scale, cut central costs. (To be clear, Deliveroo's challenge seems to be cost of sales.)

Well, it's a pretty huge loss (more than revenue! Also, I think people were surprised or amazed that they had no core profitability. Especially when it's likely COGS will go up with more and more regulation around their gig economy employees

Depends what you think the lifetime value of a customer is, plus what the ongoing cost to retain them is.

I ordered off Deliveroo in Sydney Australia, and they advertise on AdWords against individual restaurant names. If the Diliveroo brand is strong, and that AdWords click made me a Deliveroo customer, that is a win. If I always search and they always pay, this may prove problematic long term.

That's the equation - if $X upfront + $y ongoing < lifetime value then you have a chance at profitability, assuming you can get overheads under control / can scale up the offering with minimal growth in overheads (the classic 2X revenue, 1.5X costs model).

Re: Deliveroo raises $385M in new funding

#127

Post by martinald »

T2_t2 wrote: post #126
martinald wrote: post #121

Earlier quoted context omitted.

Well, it's a pretty huge loss (more than revenue! Also, I think people were surprised or amazed that they had no core profitability. Especially when it's likely COGS will go up with more and more regulation around their gig economy employees

Depends what you think the lifetime value of a customer is, plus what the ongoing cost to retain them is. I ordered off Deliveroo in Sydney Australia, and they advertise on AdWords against individual restaurant names. If the Diliveroo brand is strong, and that AdWords click made me a Deliveroo customer, that is a win. If I always search and they always pay, this may prove problematic long term. That's the equation -…

I mean the core delivery service assuming 0 marketing, tech, customer service costs is not really profitable according to their last accounts.

Re: Deliveroo raises $385M in new funding

#128

Post by ue_ »

sleavey wrote: post #103
ue_ wrote: post #73

Earlier quoted context omitted.

You say that Deliveroo has shitty working conditions and I probably don't disagree (I know nothing of them), but I'm a second year university student and I'm being pressured to find a job by my parents while I'm here; Deliveroo seems like my best bet at the moment with flexible hours; I probably wouldn't be making any more than minimum wage elsewhere anyway. I hope that's some insight as to why it's attractive to som…

That's the crux of this whole gig economy debate - for some people, these kinds of jobs are ideal: zero hours contracts, with the ability to work more or less depending on what else is going on in your life. That being said, some people take these jobs because they're the only ones they can get. I don't know your circumstances, so I'm going to guess here, but from what you write it sounds like you have the safety net…

That's true, I have my parents if things go wrong; the thing is that before I started university last year my parents convinced me not to get a student maintenance loan (i.e what pays for my living expenses and rent). Instead I get a sum of money at the start of each month and that's supposed to subsist for the utilities in the house where I live and any other expenses I have, except rent which my parents pay. I have no children or dependents nor do I pay any taxes.

It's also true that I don't need a job, but I'm being pressured to get one for the idea that my parents will at some point stop giving me money, and that I need something to put on my CV/resume (I don't think Deliveroo is all that impressive personally).

My other options are things like working in a fast food joint, or something like a cinema. But I don't know if I can do that and fit in my education at the same time plus have some free time to relax myself, play a video game or whatever. It's honestly worrying and I feel pushed into a corner by all this.

Re: Deliveroo raises $385M in new funding

#129

Post by convolvatron »

adrianm wrote: post #108
ue_ wrote: post #73

Earlier quoted context omitted.

You say that Deliveroo has shitty working conditions and I probably don't disagree (I know nothing of them), but I'm a second year university student and I'm being pressured to find a job by my parents while I'm here; Deliveroo seems like my best bet at the moment with flexible hours; I probably wouldn't be making any more than minimum wage elsewhere anyway. I hope that's some insight as to why it's attractive to som…

Look into work-study opportunities on campus. You may be able to find a job which is connected to your major.

this can also be a really good opportunity to develop a relationship with interesting faculty.

i spent so much time in college working to cover living expenses I had to drop out. thats a pretty stupid result.

Re: Deliveroo raises $385M in new funding

#130

Post by cakedoggie »

mattmanser wrote: post #16

I find it funny they're claiming some sort of AI system will help them make better margins. In my city, Nottingham. all the deliveroo people gather in Trinity Square waiting for jobs. There's obviously no special AI needed. I do think though that it raises the issue that they should be paying for their own business premises and stop using our public spaces as their company waiting spots.

> I do think though that it raises the issue that they should be paying for their own business premises and stop using our public spaces as their company waiting spots.

How is it ok to constantly have cars using these spaces for free? Using roads for free?

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