Deliveroo deal shows UK still can’t hang on to big firms

20 comments

1. Who even wants to hold on to this type of tech? What good has come from any of these food delivery platforms?

2. I agree that UK companies being sold to the US is a general concern, but nobody is going to be mourning the loss of Deliveroo. They’ve never made any real money, and they only exist still because they worked out how to get immigrants without passports to ride bikes for poverty wages.

   Being sold off to a larger takeaway service was an inevitability for them.

3. Presumably door dash will want to recover some of the money they spent here quite soon.

   Price increases and longer waits for food incoming.

4. These companies are nothing to be proud of: they’re highly explorative.

   Žižek makes the argument about how deviously ingenious these sorts of companies are from a late capitalist perspective. You count as self-employed and compete with other riders for jobs—so there’s no possibility of solidarity, mutual support, or job security. Precarity is built into the system.

5. This is the nature of the business. These companies are facilitators, not innovators. Each country has 2 to 3 Deliveroo type companies that all offer same things.

   The only way for them to deliver shareholder value is to expland operations while keepings costs low. Best way to do it is to merge with other company doing the same thing. That way, the cost of maintaining and developing code is reduced.

6. Enshitification incoming

   Not that I used deliveroo much anyway

7. Judging from all these comments. It seems I was the only person that liked using them.

   Their refund policy is really good and normally, with the offers, the price is better than in store

8. Who’s the vampire that’s sucking British blood again?

9. I still don’t understand the economics of these tech startups.

   Deliveroo lost £30m EBITDA in H1 of 2021 – £100m statutory loss which includes depreciation. It had a bigger loss in H1 the previous year of £128m, so for those 2 years alone, they lost £450m.

   Until the last set of results, they lost £30m EBITDA so safe to assume that was £85m stat loss per half year, adding £170m for the year and and the year before that let’s assume the same.

   So things a business that since 2020 has lost £800m. Not sure how long it’s been going, but losses that the I Beatles have had to provide cash support for would have been bigger earlier.

   I’ve not looked this up, but it’s entirely possible that the £2.9b only just covers the net investment to get to that point.

   And it’s a huge risk because someone has now paid £2.9b for a business that is making a positive cash flow of £3m per annum. It’s a 0.1% return.

   With rates as low as they can go for riders and the market competition, there is little to increase this.

   How long is it before there is a realization that someone is left holding the baby and with no way of making it profitable, there is a huge backdraft down the investment pipe.

10. Will never forget Amazon’s short lived food delivery service – was only launched around central London and had a 30min delivery guarantee, otherwise you got a load of money back (can’t remember exactly but think was like 20 quid).

    Sat in my office in Old Street ordering lunch from the furthest place on the map and basically ate for free for a week or two until they figured it out

    Good times.

11. > big firms

    Not a big firm, not a FTSE 100 company. It’s not the big firms we can’t hold onto, it’s the smaller and medium sized ones getting snapped up

12. I’ve worked in a few startups and their exit routes, besides going bust have always been to the NYSE or private buyers – especially other startups that need whatever you are building or are looking to expand the regions they cover.

    If you look at the FTSE 100, there’s no company like that would be a likely exit for Deliveroo. https://www.hl.co.uk/shares/stock-market-summary/ftse-100

    I think it’s a good time for Deliveroo to take the cash, it’s getting to the point where prices have gone up enough to make the deliveries beyond the price point people expect. They also have the issue of the legality of the subcontracted delivery people to contend with at some point.

    They have cut a number of unprofitable/overly competitive markets recently which is usually a sign they’re sinking, about to be sold or both!

13. ‘Vassal State’ by Angus Hanton is a good book about this. I don’t think the average person knows to what extent we are controlled by America.

14. Isn’t it just because almost everyone prefers Justeat?

15. I recently discovered that I get Deliveroo premium for the year because I have amazon prime. Worth it for the reduced delivery and other fees.

16. We don’t know anything about Door Dash’s ownership really, but I think that US ownership is probably the only way to clear up what Deliveroo is doing crime wise and to the economy. Someone needs to investigate all the dirty money now, I hope the US will do it. However, it’ll probably just be another Uber (and on it goes). Really these services need to be eradicated so that businesses and the economy can recover. 

17. what happen to the 135.000 “contracted” driver? jobless?

18. I’ve lived in villages or small towns near cities the last 5 years. I’ve never lived in a place delivaroo could deliver. JustEat and Ubereats work just fine

19. Let’s be honest… If I had started a company like Deliveroo and could sell it for billions and retire for life. I don’t care who’s buying it.

20. Of all the hills to die on Deliveroo ain’t it.

    That said, part of this is because we don’t block takeovers. Especially by private equity firms, or companies that leverage the takeover through our banks. Even when that company is smaller

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