Deliveroo is one of the market giants in the food delivery sector.
The delivery market hasn’t changed massively over the last couple of years and has been more about consolidation with the ‘Big 3‘ taking the lead: Deliveroo, UberEATS and now Just Eat. Amazon Restaurants came and went (and then invested in Deliveroo in Series G). But I digress.
When we first joined Deliveroo 5 years ago, there was no set-up fee and they sent you a printer and ordering tablet for you to receive orders.
However, times have changed and Deliveroo wants a large wedge of your cash as a set-up fee to onboard you, input your menu and send you the hardware. I would try to negotiate this, but since their one of the largest in the market, they have a ‘take it or leave it’ approach, which is sad and not helpful for the independent restaurateur.
Deliveroo Order Process
This is something that has also been refined over the years. In the early days, you had control over when the order would be ready and Deliveroo had to be responsive and allocate their fleet around your prep times which was better for the customer, but more logistically challenging for Deliveroo.
In recent months this model has changed to Deliveroo setting the pick-up time for the order when it is placed (the customer can pre-select a time slot also). Most areas are well serviced with drivers, but – when the chips are down – a pick-up time on the order is more advisory as drivers may not be allocated on time meaning you may have to remake some of the food. This is, in part, due to the fact that the drivers are subcontractors – Deliveroo has outsourced the delivery to self-employed drivers. I discussed this logistical challenge in my post Delivery Fail: The Problem with the Gig Economy and how it affects the restaurant directly.
Here’s the ordering process:
- The order comes through on your ordering tablet
- The order is Auto-Accepted (you can switch this off, but Deliveroo prefer you not to)
- The order prints on a receipt with a pick-up time
- You make the order
- You wait for a driver who takes the food to the customer
- If the driver turns up and the food is not ready (and may need more time), they often reject the job and go onto their next gig, leaving you to wait for a new driver and there is no guarantee when that will be.
It’s a very simple, easy-to-follow process but you have no real control over the food-prep time, so for more fine dining establishments, you may need longer to make the food than Deliveroo gives you.
You can toggle a ‘busy’ switch which should give you more time to prepare the food, but in reality, it only adds a few minutes because prep times are based on averages for other restaurants in the area. You can also suspend orders by closing the restaurant on the tablet.
The system does seem to learn because this appears to be less of an issue today (as I write this) than it was when the process was first introduced a few months back. We would get 7 minute prep times for orders which could take 40 minutes to make.
In more densely populated urban areas, there is no issue with drivers (bad weather events aside) as there is always another one just around the corner. In more provincial areas, drivers can sometimes be a challenge – there just don’t seem to be any on the road at all – but Deliveroo is making investments to rectify this as it gives a bad experience for the customer and reflects badly on the restaurant as the customer may think that the restaurant is at fault even though they have no control over the driver allocations.
Yes, you then have to pay a commission to Deliveroo for every order delivered (which is increased if you work with other delivery companies also). It’s not cheap and has consistently gone up over the years. Deliveroo says it’s worked out like this because they need to manage costs, but they:
- Charge a hefty onboarding fee,
- Outsource all the delivery,
- Charge a delivery fee to the customer on top, and
- Charge you a commission for the privilege
As of December 2018, the Deliveroo Group filed a loss of £232m with Series G funding in progress. This netted £575m in further investments this year.
To the independent restaurant, the cost structure seems greedy, but in reality, it is how the group operates as it consistently makes a loss. For larger groups and chains who can operate in the same way financially as Deliveroo, it’s just another day at the office.
It took longer for Deliveroo to provide an online dashboard than others, but they do send daily sales reports to you with a full breakdown of all your items sold. The online SALES dashboard gives you access to all of this data also.
There is also an INVOICING section which lists each of your period invoices. During COVID these are daily, but prior to that they were twice monthly. You can download a CSV or PDF and it’s really easy. Import these into Excel and you can do more analysis.
Deliveroo do not account for VAT on sales. They leave this to you, so you will either have to rekey your orders into your EPOS to calculate the VAT or post-process the daily sales reports to apply the correct VAT to items sold. Bit of a hassle but easy enough to automate and your accountant can help here also.
I hope this overview was useful? If there is anything you’d like me to look at, review or provide some guides about, let me know in the comments. Thanks!