Deliveroo's Prospective IPO
Discussion
NickCQ said:
okgo said:
Anyway, I want to get to a point with Deliveroo or whatever that I can buy almost anything from any shop and it be brought in 20 minutes. That is where I think they can head...
Used to exist in the Bay area 20 years agohttps://en.wikipedia.org/wiki/Webvan
I think Deliveroo is going in the other direction because they have realised that delivery alone can't be a profitable business. I suspect because the addressable market that is prepared to pay the true marginal cost for rapid delivery is smaller than you might think. Why else would they invest as much capital as they have in starting their own restaurants ("Editions")?
He said they charged a percentage of the items price. Assuming a minimum fee too.
okgo said:
Fuel?
That's why you need to do it in London. Any s
te mountainbike, a wheelbased 1000W motor from china and off you go, literally that is the deliveroo starter kit round here. And there's no wear and tear on the bike as they don't ever pedal 
A lot of people here are on E-Bikes. I do it in my Polestar which costs me about £2.50 to do 100 miles. That's why you need to do it in London. Any s
te mountainbike, a wheelbased 1000W motor from china and off you go, literally that is the deliveroo starter kit round here. And there's no wear and tear on the bike as they don't ever pedal I can see it getting more popular however, I didn't realise how many riders even in Chester they had employed until I started doing a few hours myself. They have started delivering from Aldi & Morrisons around here and its proving to be popular especially in the less desirable areas where people cant afford a car and don't mind paying £2 for the convenience.
It always surprises me when I pull up to a council house and they have ordered £30/40 worth of takeaway from Five Guys etc. however...
Succinct commentary on TechMarketView daily email this morning. I'll give it a miss.
''Deliveroo and the missing 20 ‘meal occasions’
Anthony Miller, 19:32, 22 March 2021
I have followed the fortunes of Deliveroo since its Series A funding round back in June 2014 (see Investors toss £2.7m at ‘MOWMAT’ Deliveroo)*. At the time, Deliveroo only delivered meals from restaurants that didn’t have their own delivery service, and Just Eat (now Just Eat Takeaway, JET) did the same only for restaurants that did. The difference that had on financial performance was stark; Deliveroo lost money, JE was profitable.
Roll forward nearly six years and everything’s changed. New competitors, new business models, new backers. Deliveroo still loses money – but now so does JET, having been forced to emulate Deliveroo’s business model of having its own delivery drivers in order to grow beyond its then current market.
This is all a precursor to today’s announcement of the share price range for Deliveroo’s IPO as confirmed earlier this month (see Deliveroo confirms London IPO). The price has been set at £3.90 to £4.60 per share, implying an estimated market cap. of between £7.6b and £8.8b, shy of the £10b+ value currently placed on JET. In 2020, JET lost €185m on €2b in revenues, whereas Deliveroo lost £226m on £1.19b in revenues.
But this is indeed a cause for celebration (see More IPO candidates added to the 'Reasons to be Cheerful' list), especially because Deliveroo did not succumb to the lure of a US listing nor to the siren song of the mega-SPACs, which to my mind are the work of the devil (and see Hopin shuns SPACs as backers pop in another $400m).
I admire Deliveroo Founder and CEO Will Shu’s drive and ambition to chase after the remaining 20 ‘meal occasions’ a week (based on 3 meals a day 7 days a week) he says do not take place online, as Deliveroo expands its network of restaurants, riders and ‘dark’ kitchens. My concern remains, though, as to when – if ever – Deliveroo will generate a sustained profit. For that, it will need to comprehensively trounce its formidable rivals.
The IPO will give Deliveroo access to a bigger pool of investors. But they will surely find themselves being asked to dig even deeper to finance its growth.
''Deliveroo and the missing 20 ‘meal occasions’
Anthony Miller, 19:32, 22 March 2021
I have followed the fortunes of Deliveroo since its Series A funding round back in June 2014 (see Investors toss £2.7m at ‘MOWMAT’ Deliveroo)*. At the time, Deliveroo only delivered meals from restaurants that didn’t have their own delivery service, and Just Eat (now Just Eat Takeaway, JET) did the same only for restaurants that did. The difference that had on financial performance was stark; Deliveroo lost money, JE was profitable.
Roll forward nearly six years and everything’s changed. New competitors, new business models, new backers. Deliveroo still loses money – but now so does JET, having been forced to emulate Deliveroo’s business model of having its own delivery drivers in order to grow beyond its then current market.
This is all a precursor to today’s announcement of the share price range for Deliveroo’s IPO as confirmed earlier this month (see Deliveroo confirms London IPO). The price has been set at £3.90 to £4.60 per share, implying an estimated market cap. of between £7.6b and £8.8b, shy of the £10b+ value currently placed on JET. In 2020, JET lost €185m on €2b in revenues, whereas Deliveroo lost £226m on £1.19b in revenues.
But this is indeed a cause for celebration (see More IPO candidates added to the 'Reasons to be Cheerful' list), especially because Deliveroo did not succumb to the lure of a US listing nor to the siren song of the mega-SPACs, which to my mind are the work of the devil (and see Hopin shuns SPACs as backers pop in another $400m).
I admire Deliveroo Founder and CEO Will Shu’s drive and ambition to chase after the remaining 20 ‘meal occasions’ a week (based on 3 meals a day 7 days a week) he says do not take place online, as Deliveroo expands its network of restaurants, riders and ‘dark’ kitchens. My concern remains, though, as to when – if ever – Deliveroo will generate a sustained profit. For that, it will need to comprehensively trounce its formidable rivals.
The IPO will give Deliveroo access to a bigger pool of investors. But they will surely find themselves being asked to dig even deeper to finance its growth.
- Note: MOWMAT (Meals On Wheels Masquerading As Tech) was a term I coined for food delivery services like Deliveroo and Just Eat but it never caught on, so there we go.''
hyphen said:
NickCQ said:
okgo said:
Anyway, I want to get to a point with Deliveroo or whatever that I can buy almost anything from any shop and it be brought in 20 minutes. That is where I think they can head...
Used to exist in the Bay area 20 years agohttps://en.wikipedia.org/wiki/Webvan
I think Deliveroo is going in the other direction because they have realised that delivery alone can't be a profitable business. I suspect because the addressable market that is prepared to pay the true marginal cost for rapid delivery is smaller than you might think. Why else would they invest as much capital as they have in starting their own restaurants ("Editions")?
He said they charged a percentage of the items price. Assuming a minimum fee too.
I can see the value in these delivery firms as more and more environments evolve towards the NY reality of a kitchen being an unboxing station as opposed to a workshop and the logic of food vendors not having the hassle of maintaining a fleet of scooters and illegals on the pavement outside.
I'm not even convinced that the labour issue is hugely relevant because surely it's a vital mechanism to ensure only winners apply and that customer food arrives warm and to the right place? Surely as soon as you have employment rights and minimum wage you then have to create an enormous HR vetting process to try and keep out the element that just can't do the job? It's also the sort of work that is of benefit to an environment as individuals can drop in and out with freedom as well as fit it in around other work or studies.
While I agree with proper employment and minimum wage for proper jobs I'm not convinced that carrying a burger on a pushbike should be seen as a proper job but in fact should be valued as a no skilled, highly flexible source of income with very natural barriers to entry and more importantly, unlike many gig economy jobs there is no slave master in between.
What I find difficult to get my head around is the amount of money they are losing. They are taking a hefty slice of the action from the food vendor and on the other side have third world levels of costs as there are no wages, the worker pays the equipment costs (genius) and the worker pool naturally selects itself.
I would think that it was critical to understand where these losses emanate from? In simple terms, are they the losses incurred through rapid expansion so while established markets are profitable they are opening new markets in such numbers as to soak up those profits and more? Or is it something insidious such as even the established markets aren't profitable because the model doesn't actually work and can never work because it has strayed over the line into sales that are too cheap to turn a profit on? Ie, delivering a £50 meal, taking a £10/£15 cut and paying the deliverer a couple of quid works brilliantly but sub minimum ticket orders such as delivering a £10 McDonalds, taking just £1 and paying more to the rider?
If the latter then are they deliberately running sales below minimum ticket to out compete for customers and to seize market share on the back of investor capital or is it a systemic issue in the model that in order to maintain a sufficient delivery fleet you have to have the flow that comes from these unprofitable sales?
Also, what other areas can they expand into? They have an app and a fleet of pushbikes. The document market is obviously gone. What higher value but non cumbersome things need moving around urban/suburban bubbles? I can't think of anything.
If I were looking to invest then that is the single element I would trouble myself to research and get answered. The labour aspect is a modest concern but probably any crunch is a while out and it would impact all such businesses. It seems pretty clear to me that having food delivered is going to keep growing as a trend. Unless cooking is a pleasure then anyone with money and an app can get whatever they fancy delivered in short order so that is exactly what they will keep doing
However, this is all assuming that there is logic to the IPO and share demand after which there may not be.
The media is discussing which pension funds might buy in based on which moral standpoints a fund manager without morals wished to promote for PR purposes and a few years ago we would be discussing whether the market sees Deliveroo as a tech company that if that delusion can be swung would mean selling stock at a big forward rating etc but maybe the media is looking in the wrong places for a float like this?
Surely there is a very significant possibility that the success of this float lies in the hands of the millions of micro gambling accounts held by the very people who use services such as Deliveroo?
You have millions of tiny accounts that are long only and by nature act in concert like a murmur of starlings. Deliveroo have been using the trick of giving workers paper instead of money (another reason for questioning those losses) so they have almost certainly been prepping to target this market. If Deliveroo is seen as the future then the fundamentals are of no relevance at all and these micro accounts will simply and without thought deliver demand month in month out and push the valuation ever northwards.
I wonder if today, if we want to try and predict if a consumer IPO is going to deliver good returns maybe we should focus on what their brokers and backers are doing inside social media to spin up micro account demand rather than paying heed to what an asset manager might be saying as fundamentals have no relevance if you can turn your brand into a cult?
Maybe this IPO will simply boil down to whether they can get enough snake oil vendors to pitch well enough to the Saturn is in Uranus, tealeaf, moving averages, new world order, young humans are a different species cults and all the others?
We got the book on this one a while ago and from the IPO prospectus the pitch has not changed much
https://corporate.deliveroo.co.uk/protected_file/1...
The key table is page 111. If you take "UK and Ireland" as the mature segment they report £81M Adj EBITDA on £599M revenue (13% margin).
I would want more detail on the £100 mm of "Other" admin expenses they have carved out to get there.
https://corporate.deliveroo.co.uk/protected_file/1...
The key table is page 111. If you take "UK and Ireland" as the mature segment they report £81M Adj EBITDA on £599M revenue (13% margin).
I would want more detail on the £100 mm of "Other" admin expenses they have carved out to get there.
DonkeyApple said:
Until Uber you could always get the essentials such as booze, fags and milk delivered by the local minicab firm.
I can see the value in these delivery firms as more and more environments evolve towards the NY reality of a kitchen being an unboxing station as opposed to a workshop and the logic of food vendors not having the hassle of maintaining a fleet of scooters and illegals on the pavement outside.
I'm not even convinced that the labour issue is hugely relevant because surely it's a vital mechanism to ensure only winners apply and that customer food arrives warm and to the right place? Surely as soon as you have employment rights and minimum wage you then have to create an enormous HR vetting process to try and keep out the element that just can't do the job? It's also the sort of work that is of benefit to an environment as individuals can drop in and out with freedom as well as fit it in around other work or studies.
While I agree with proper employment and minimum wage for proper jobs I'm not convinced that carrying a burger on a pushbike should be seen as a proper job but in fact should be valued as a no skilled, highly flexible source of income with very natural barriers to entry and more importantly, unlike many gig economy jobs there is no slave master in between.
What I find difficult to get my head around is the amount of money they are losing. They are taking a hefty slice of the action from the food vendor and on the other side have third world levels of costs as there are no wages, the worker pays the equipment costs (genius) and the worker pool naturally selects itself.
I would think that it was critical to understand where these losses emanate from? In simple terms, are they the losses incurred through rapid expansion so while established markets are profitable they are opening new markets in such numbers as to soak up those profits and more? Or is it something insidious such as even the established markets aren't profitable because the model doesn't actually work and can never work because it has strayed over the line into sales that are too cheap to turn a profit on? Ie, delivering a £50 meal, taking a £10/£15 cut and paying the deliverer a couple of quid works brilliantly but sub minimum ticket orders such as delivering a £10 McDonalds, taking just £1 and paying more to the rider?
If the latter then are they deliberately running sales below minimum ticket to out compete for customers and to seize market share on the back of investor capital or is it a systemic issue in the model that in order to maintain a sufficient delivery fleet you have to have the flow that comes from these unprofitable sales?
Also, what other areas can they expand into? They have an app and a fleet of pushbikes. The document market is obviously gone. What higher value but non cumbersome things need moving around urban/suburban bubbles? I can't think of anything.
If I were looking to invest then that is the single element I would trouble myself to research and get answered. The labour aspect is a modest concern but probably any crunch is a while out and it would impact all such businesses. It seems pretty clear to me that having food delivered is going to keep growing as a trend. Unless cooking is a pleasure then anyone with money and an app can get whatever they fancy delivered in short order so that is exactly what they will keep doing
However, this is all assuming that there is logic to the IPO and share demand after which there may not be.
The media is discussing which pension funds might buy in based on which moral standpoints a fund manager without morals wished to promote for PR purposes and a few years ago we would be discussing whether the market sees Deliveroo as a tech company that if that delusion can be swung would mean selling stock at a big forward rating etc but maybe the media is looking in the wrong places for a float like this?
Surely there is a very significant possibility that the success of this float lies in the hands of the millions of micro gambling accounts held by the very people who use services such as Deliveroo?
You have millions of tiny accounts that are long only and by nature act in concert like a murmur of starlings. Deliveroo have been using the trick of giving workers paper instead of money (another reason for questioning those losses) so they have almost certainly been prepping to target this market. If Deliveroo is seen as the future then the fundamentals are of no relevance at all and these micro accounts will simply and without thought deliver demand month in month out and push the valuation ever northwards.
I wonder if today, if we want to try and predict if a consumer IPO is going to deliver good returns maybe we should focus on what their brokers and backers are doing inside social media to spin up micro account demand rather than paying heed to what an asset manager might be saying as fundamentals have no relevance if you can turn your brand into a cult?
Maybe this IPO will simply boil down to whether they can get enough snake oil vendors to pitch well enough to the Saturn is in Uranus, tealeaf, moving averages, new world order, young humans are a different species cults and all the others?
The chappie at Brewdog is doing exactly that.I can see the value in these delivery firms as more and more environments evolve towards the NY reality of a kitchen being an unboxing station as opposed to a workshop and the logic of food vendors not having the hassle of maintaining a fleet of scooters and illegals on the pavement outside.
I'm not even convinced that the labour issue is hugely relevant because surely it's a vital mechanism to ensure only winners apply and that customer food arrives warm and to the right place? Surely as soon as you have employment rights and minimum wage you then have to create an enormous HR vetting process to try and keep out the element that just can't do the job? It's also the sort of work that is of benefit to an environment as individuals can drop in and out with freedom as well as fit it in around other work or studies.
While I agree with proper employment and minimum wage for proper jobs I'm not convinced that carrying a burger on a pushbike should be seen as a proper job but in fact should be valued as a no skilled, highly flexible source of income with very natural barriers to entry and more importantly, unlike many gig economy jobs there is no slave master in between.
What I find difficult to get my head around is the amount of money they are losing. They are taking a hefty slice of the action from the food vendor and on the other side have third world levels of costs as there are no wages, the worker pays the equipment costs (genius) and the worker pool naturally selects itself.
I would think that it was critical to understand where these losses emanate from? In simple terms, are they the losses incurred through rapid expansion so while established markets are profitable they are opening new markets in such numbers as to soak up those profits and more? Or is it something insidious such as even the established markets aren't profitable because the model doesn't actually work and can never work because it has strayed over the line into sales that are too cheap to turn a profit on? Ie, delivering a £50 meal, taking a £10/£15 cut and paying the deliverer a couple of quid works brilliantly but sub minimum ticket orders such as delivering a £10 McDonalds, taking just £1 and paying more to the rider?
If the latter then are they deliberately running sales below minimum ticket to out compete for customers and to seize market share on the back of investor capital or is it a systemic issue in the model that in order to maintain a sufficient delivery fleet you have to have the flow that comes from these unprofitable sales?
Also, what other areas can they expand into? They have an app and a fleet of pushbikes. The document market is obviously gone. What higher value but non cumbersome things need moving around urban/suburban bubbles? I can't think of anything.
If I were looking to invest then that is the single element I would trouble myself to research and get answered. The labour aspect is a modest concern but probably any crunch is a while out and it would impact all such businesses. It seems pretty clear to me that having food delivered is going to keep growing as a trend. Unless cooking is a pleasure then anyone with money and an app can get whatever they fancy delivered in short order so that is exactly what they will keep doing
However, this is all assuming that there is logic to the IPO and share demand after which there may not be.
The media is discussing which pension funds might buy in based on which moral standpoints a fund manager without morals wished to promote for PR purposes and a few years ago we would be discussing whether the market sees Deliveroo as a tech company that if that delusion can be swung would mean selling stock at a big forward rating etc but maybe the media is looking in the wrong places for a float like this?
Surely there is a very significant possibility that the success of this float lies in the hands of the millions of micro gambling accounts held by the very people who use services such as Deliveroo?
You have millions of tiny accounts that are long only and by nature act in concert like a murmur of starlings. Deliveroo have been using the trick of giving workers paper instead of money (another reason for questioning those losses) so they have almost certainly been prepping to target this market. If Deliveroo is seen as the future then the fundamentals are of no relevance at all and these micro accounts will simply and without thought deliver demand month in month out and push the valuation ever northwards.
I wonder if today, if we want to try and predict if a consumer IPO is going to deliver good returns maybe we should focus on what their brokers and backers are doing inside social media to spin up micro account demand rather than paying heed to what an asset manager might be saying as fundamentals have no relevance if you can turn your brand into a cult?
Maybe this IPO will simply boil down to whether they can get enough snake oil vendors to pitch well enough to the Saturn is in Uranus, tealeaf, moving averages, new world order, young humans are a different species cults and all the others?
Venisonpie said:
The chappie at Brewdog is doing exactly that.
That's interesting. I think it's generally common knowledge that I hold the view that in financial markets almost nothing is ever new and that everything eventually gets dug up from the grave, rebranded and sold to the next generation/wave of investors who think the shiny stickers and fancy words of a product mean it's never been seen before. You don't seem to be able to go anywhere without SPACS being talked about as amazing and new and I have a feeling that the IPO market is going to get an exciting rebrand on the back of the rise of the off book bookmakers.
There is a current trend to launch new exchanges because for the new bookmaking systems of RH, eToro, 212 etc to work the instrument offered to the end gambler must be traded on a recognised exchange. Ie, you can't use OTCs because you can't then use the end client's money for collateral. The sort of products that the micro accounts want to punt on have a tendency to not be the sort of products that the established, core exchanges want or can be competitive on, especially when incoming orders have a tendency to be one hundredth of a share!
New exchanges orientated directly at the new micro account market. They won't really be exchanges but rather centralised bookie destinations where gambling flow pours in at one end and bookies amass at the other to make offers to buy segments of that flow. It works brilliantly because the legal entity that owns the client can tick the box that it is executing the client order on an exchange and transacting in a physical product while on the other side another institution can buy the flow and sit on it until the losses appear while legitimately claiming to be a market maker. Then you can see if one entity has an ownership of the parties on either side it is a pure bookmaking exercise legitimised to work within the global regulatory parameters.
You can put whatever you want on the exchanges so as we as UK market participants have been able to do for decades with spread betting and CFDs you can invent thousands of new instruments based on all sorts of weird and wonderful ideas and all designed to fit the exact demands of the micro account punter. This is nothing new to us but for the rest of the world it is mind blowing and I'm sure most new micro participants in the UK will be convinced that it's new as well.
If you have new exchanges where you can issue anything then it's only going to be a matter of time before the eyes of those seeking to add flow onto these exchanges fall onto crowdfunding. Crowdfunding itself being a rebrand of the traditional off exchange investing that has always taken place but with a rather grim twist that it has been tailored to appeal to small and micro investors who could never traditionally participate by deliberately and manifestly miscalculating the risk. This is another example of barriers to entry on a market collapsing to the point that you can suddenly access a whole new type of client and it's a client that will never read a balance sheet, never view fundamentals, never understand risk but will just give their money away based on what a stranger on social media tells them to do multiplied by how cool a new word sounds, how clever the rebranding of an older idea as a new one is and how many fake social media accounts are saying how great it all is. So with a rebranding of the old junior off-exchange model you can sell debt and stock at wholly incorrect prices and make big enough fees for these transactions to be worth doing.
These new exchanges will seek to take flow from the crowdfunding market almost certainly by starting out offering those platforms an affordable exit point for existing corporate clients that have actually made it but that will be a very small number as crowdfunding doesn't make its money from companies succeeding but from mis pricing their risk and postponing their failure as long as possible. But the new exchanges will have tens of millions of micro accounts on the other side of them, every single one there in the belief that they are a savvy investor and every single one able to recharge their punting account every month when they get paid and wanting to do so because this is the new pension for their affluent old age. So why fanny about with the crowdfunding platforms? Just do cheap IPOs yourself.
And that's what we will see in due course. Lots of IPOs into these new exchanges and lots of shells set up with them all being sold to the micro investors.
And this is why it will work and why crowdfunding failed. The stock can be traded openly on the exchange. Historically this was clunky because minimum deal sizes needed to be large enough to cover execution costs and that cost was a significant percentage of the average small investor's holding. Not so today. Those barriers are gone so you can trade in single shares abs gran too a of shares. So the micro investor can participate but crucially what you know about the micro investor is that the moment they go long they will work night and day to trick other people to buy in behind them to push the share price up and make them rich. Many won't even appreciate what they are actually doing because they will switch the moment their money crosses over to being 'believers'. They will accept no negatives and 24/7 work on pumping the price up.
With crowdfunding this was irrelevant as the people reading your tweets, watching your videos couldn't do anything about it. You could trick them into wanting stock but there was no secondary market. If the stock is on a exchange there is. Suddenly you have micro companies issuing micro shares on micro exchanges that micro investors can subscribe to at IPO and they will then go around the world tirelessly roping in other micro investors to go onto the exchange and buy stock and the stock prices will go through the roof.
And a really cool trick with the IPOs will be that if a company wants £10m this might be too much money to raise in one hit from the micro investors. This is another failing of crowdfunding as a legitimate enterprise which is that raising the sums desired will typically take too long and cost too much. But when you own your own exchange you can be smarter and you can look at how your typical retail micro account works and twist your IPO to fit. You won't raise £10m in one hit as your client base can't do it. The deal sizes will be too big for the number of participants so instead you raise that £10m by splitting it into 10 monthly commitments to buy £1m. Bang. Suddenly your IPO raise structure fits the size of the micro accounts and how they recharge each month.
By splitting the IPO raise over a year you can onboard much smaller investors, they can participate in many IPOs and they will manifestly be promoting your business and stock price the entire time they are legally contracted to buy new stock by which time your stock price has been ramped well above fair value and you have carried out multiple additional stock issue to satisfy demand.
Companies like Brewdog would benefit hugely from this but generally, once this tie up happens and the micro exchange returns with all its rebranding to pretend to be something new after a 20 year absence I suspect that we will have the greatest period of banditry ever seen it will be like 1999 but turbo charged and actual investors will be able to make comedy returns off the back of it.
When i was in Colombia, they had a company called Rappi
https://www.rappi.com.co/
It was HUGE. Riders absolutely everywhere. They would go and get you literally anything from the shops. Restaurants, supermarkets and any other shop you can think of. They'd bring you beer and fags if you wanted. I honestly think this is where Deliveroo will head. They will have riders sat outside local supermarkets waiting for their phone to buzz with an order so they can take it to a person on a nearby estate.
Generally people are lazy. If they can get whatever they want delivered at the click of a button, even if it's a 4 pack, bread and milk from the local Sainsburys they will. I can see this getting bigger and bigger as time goes by. I certainly don't think it's a business that will just not work out and disappear.
https://www.rappi.com.co/
It was HUGE. Riders absolutely everywhere. They would go and get you literally anything from the shops. Restaurants, supermarkets and any other shop you can think of. They'd bring you beer and fags if you wanted. I honestly think this is where Deliveroo will head. They will have riders sat outside local supermarkets waiting for their phone to buzz with an order so they can take it to a person on a nearby estate.
Generally people are lazy. If they can get whatever they want delivered at the click of a button, even if it's a 4 pack, bread and milk from the local Sainsburys they will. I can see this getting bigger and bigger as time goes by. I certainly don't think it's a business that will just not work out and disappear.
vulture1 said:
The irony being the people who are cash rich time poor might use this and pay for the cost but likely the time rich cash poor person will waste what little they have on the laziness of getting milk and pot noodles brought to them
That's the pitch with all lifestyle services. It's like the etoro adverts showing blokes who have a brain and money when the target is broke punters who spend much of the day trying to fathom how underpants work. The reality with Dileveroo being that the bloke standing on the doorstep, being looked down on is the cash rich, time starved participant in the transaction. fellatthefirst said:
When i was in Colombia, they had a company called Rappi
https://www.rappi.com.co/
It was HUGE. Riders absolutely everywhere. They would go and get you literally anything from the shops. Restaurants, supermarkets and any other shop you can think of. They'd bring you beer and fags if you wanted. I honestly think this is where Deliveroo will head. They will have riders sat outside local supermarkets waiting for their phone to buzz with an order so they can take it to a person on a nearby estate.
Generally people are lazy. If they can get whatever they want delivered at the click of a button, even if it's a 4 pack, bread and milk from the local Sainsburys they will. I can see this getting bigger and bigger as time goes by. I certainly don't think it's a business that will just not work out and disappear.
Good thing about this was when they introduced Rappi Prime for like £4 a month. Cheaper labour market there than here though. https://www.rappi.com.co/
It was HUGE. Riders absolutely everywhere. They would go and get you literally anything from the shops. Restaurants, supermarkets and any other shop you can think of. They'd bring you beer and fags if you wanted. I honestly think this is where Deliveroo will head. They will have riders sat outside local supermarkets waiting for their phone to buzz with an order so they can take it to a person on a nearby estate.
Generally people are lazy. If they can get whatever they want delivered at the click of a button, even if it's a 4 pack, bread and milk from the local Sainsburys they will. I can see this getting bigger and bigger as time goes by. I certainly don't think it's a business that will just not work out and disappear.
fellatthefirst said:
When i was in Colombia, they had a company called Rappi
https://www.rappi.com.co/
It was HUGE. Riders absolutely everywhere. They would go and get you literally anything from the shops. Restaurants, supermarkets and any other shop you can think of. They'd bring you beer and fags if you wanted. I honestly think this is where Deliveroo will head. They will have riders sat outside local supermarkets waiting for their phone to buzz with an order so they can take it to a person on a nearby estate.
Generally people are lazy. If they can get whatever they want delivered at the click of a button, even if it's a 4 pack, bread and milk from the local Sainsburys they will. I can see this getting bigger and bigger as time goes by. I certainly don't think it's a business that will just not work out and disappear.
M16 and a couple of clips??? https://www.rappi.com.co/
It was HUGE. Riders absolutely everywhere. They would go and get you literally anything from the shops. Restaurants, supermarkets and any other shop you can think of. They'd bring you beer and fags if you wanted. I honestly think this is where Deliveroo will head. They will have riders sat outside local supermarkets waiting for their phone to buzz with an order so they can take it to a person on a nearby estate.
Generally people are lazy. If they can get whatever they want delivered at the click of a button, even if it's a 4 pack, bread and milk from the local Sainsburys they will. I can see this getting bigger and bigger as time goes by. I certainly don't think it's a business that will just not work out and disappear.
h0bbsy said:
Good thing about this was when they introduced Rappi Prime for like £4 a month. Cheaper labour market there than here though.
It still is massive, but even before Rappi you could ring your local corner shop and they'd deliver. Rappi has branded a service that was largely already there. Good thing about Rappi is you can effectively put cash in an online account and they can go anywhere and get anything you like be it a pair of a pants or a piece of fish. People were even paying for hugs from Rappi drivers...Deliveroo will probably end up like Rappi, or will blend into a taskrabbit style service. I'm still undecided on taking a punt as I think the labour law stuff could have a big effect plus, the food they deliver is only going up in price and down in size/quality. People get fed up of it eventually as some food just doesn't travel well.
I think that so long as people have vast amounts of excess cash they will demand muck in a bucket to be delivered 24/7. The more premium consumer may get picked off by specialist local services but I suspect that the core consumer isn't all that price, portion or quality sensitive when it comes to the alternative of having to cook themselves or book an Uber to carry them 100 yards to the nearest lard emporium.
The genie is out of the lamp in regards to this cultural shift and it's hard to imagine a reversal. It's not even as if the other factors to assist in getting consumers to leave their home still exist, gone are the days of spending 20 minutes choosing a VHS while waiting for the curry to be ready.
The genie is out of the lamp in regards to this cultural shift and it's hard to imagine a reversal. It's not even as if the other factors to assist in getting consumers to leave their home still exist, gone are the days of spending 20 minutes choosing a VHS while waiting for the curry to be ready.
DonkeyApple said:
I think that so long as people have vast amounts of excess cash they will demand muck in a bucket to be delivered 24/7. The more premium consumer may get picked off by specialist local services but I suspect that the core consumer isn't all that price, portion or quality sensitive when it comes to the alternative of having to cook themselves or book an Uber to carry them 100 yards to the nearest lard emporium.
The genie is out of the lamp in regards to this cultural shift and it's hard to imagine a reversal. It's not even as if the other factors to assist in getting consumers to leave their home still exist, gone are the days of spending 20 minutes choosing a VHS while waiting for the curry to be ready.
As you say it's all down to disposable (or borrowed) cash. If you can afford to pay for a new layer of service industry between you and the shops, then you can stay at home and vegetate and let what is effectively a servant do the work for you. The downside perhaps is that you'll get one lot of society getting lazier, and another lot of society on minimum wage and unsocial hours. The difference between that and 150+ years ago is that the servants don't live in your house and someone else is responsible for them...The genie is out of the lamp in regards to this cultural shift and it's hard to imagine a reversal. It's not even as if the other factors to assist in getting consumers to leave their home still exist, gone are the days of spending 20 minutes choosing a VHS while waiting for the curry to be ready.
Simpo Two said:
As you say it's all down to disposable (or borrowed) cash. If you can afford to pay for a new layer of service industry between you and the shops, then you can stay at home and vegetate and let what is effectively a servant do the work for you. The downside perhaps is that you'll get one lot of society getting lazier, and another lot of society on minimum wage and unsocial hours. The difference between that and 150+ years ago is that the servants don't live in your house and someone else is responsible for them...
And they'll probably all take their accumulated wealth back to their country of birth when they've finished grafting hard. Sooo desperate investors subsidise cheap delivery of food, until they don’t.
In the meantime the businesses look for ways to make a profit.
Investors jump in on the promise of profit by business model X, which was clearly wrong. So stay in hoping they find a business model that will work?
I always just recall the ways my local restaurants and takeaways operated in the past.
Mostly students or temporary waitress types. Young people moonlighting doing deliveries. First job on tills on evenings etc.
There was never money in there for an intermediary. Even with economies of scale, they were always mostly busy if they were a decent business.
I can see money in this. “Deliveree“ has appeared in my local area... but they won’t have shareholders and tens of billions invested and need to make vast margins to stay in business.
If these small platforms can come about in a world where just eat and Deliveroo already do business, then the big ones would seem to be a lost cause.
Too expensive to cover investor demand for margin in the tightest margin business going... no IP, no anything, just glorified interface for a delivery business and contracts, paying the lowest salaries etc.
There just isn’t room in it for executives getting £££ in shares and investors taking multi-percentage growth and margin returns.
In the meantime the businesses look for ways to make a profit.
Investors jump in on the promise of profit by business model X, which was clearly wrong. So stay in hoping they find a business model that will work?
I always just recall the ways my local restaurants and takeaways operated in the past.
Mostly students or temporary waitress types. Young people moonlighting doing deliveries. First job on tills on evenings etc.
There was never money in there for an intermediary. Even with economies of scale, they were always mostly busy if they were a decent business.
I can see money in this. “Deliveree“ has appeared in my local area... but they won’t have shareholders and tens of billions invested and need to make vast margins to stay in business.
If these small platforms can come about in a world where just eat and Deliveroo already do business, then the big ones would seem to be a lost cause.
Too expensive to cover investor demand for margin in the tightest margin business going... no IP, no anything, just glorified interface for a delivery business and contracts, paying the lowest salaries etc.
There just isn’t room in it for executives getting £££ in shares and investors taking multi-percentage growth and margin returns.
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