UberEats vs. Deliveroo

 

 

UberEats vs. Deliveroo

Introduction

Online food delivery has increased over the past two decades despite the presence of traditional brick and mortar food businesses. With the emergence of technology, shoppers can place orders of their favorite foods, which are delivered directly at their doorstep (SAIZ-ALVAREZ, 2020). With the increase in the number of companies offering online food deliveries, every firm is adopting cutting edge competitive advantage to remain in the market. In this paper, I will outline the start and growth of UberEats and Deliveroo. I will also discuss their similarities and differences in addition to the SWOT analysis of each firm. Lastly, I will outline the recommendations of each firm.

 

 

 

 

 

 

 

 

 

 

 

 

Outline

1. An overview of Deliveroo
2. An Overview of UberEats
3. Comparison and Key Differences
4. Deliveroo SWOT Analysis
5. UberEats SWOT Analysis
6. Recommendations to Deliveroo
7. Recommendations to UberEats
8. Conclusion
9. References
10. Appendix

 

 

 

 

 

 

 

 

 

Deliveroo

Deliveroo is an online food delivery company that was founded in 2013 by William Shu. Its headquarters are located in London. The Company provides its services in more than two hundred cities in the United Kingdom (CANT, 2020). Deliveroo earns revenue through charging a commission fee to restaurants and by charging customers a per order fee. Food orders are made through the Company’s app or website; then, they are transported to the customers by the employed motorcycle and bicycle couriers. In 2017 November, Deliveroo launched the Deliveroo Plus, this was a subscription service giving all its customers unlimited free delivery.

According to a survey conducted by GlobalWebIndex survey, Deliveroo is the most popular food delivery company in the UK. However, it is ahead of Uber Eats with only a 23 percent margin. Deliveroo is ranked at number 96 in the Apple App Store in the United Kingdom, and on the Google play store, it takes position four. The number of restaurants working with Deliveroo was 80,000 as of early 2020, with thirty thousand based in the UK. These restaurants operate in 500 cities in Australia, Europe, and Asia. The Company owns 15,000 couriers in the UK and another 20 000 globally, giving a total of 35,000 couriers.

The food delivery company saw enormous revenue growth in 2018, but as it expanded, it incurred a lot of losses because more money went to the new areas and businesses in the very competitive market. However, according to research done by the Financial Times, its revenue rose up to 70 percent in 2018, but its expenses increased to 340 million US dollars in the same year. Deliveroo is among the fastest-growing companies in Europe, having expanded its operations to Kuwait and Taiwan (CANT, 2020). A study done by the Macroeconomics Consultancy Economics indicated that the Company created over 7000 jobs in the hospitality sector since it was created in 2013. The study also found that Deliveroo helped add 370 million US dollars to the UK economy in 2017, which increased to 1.5 billion US dollars in 2019.

Uber Eats

Uber Eats is an online food delivery company based in America. It was founded in 2009 by Travis and Garret. Uber Eats began delivering food in 2014 August with the launch of UberFresh service in California. Later in 2015 the Company changed its name to UberEats and the software in which orders would be made was introduced as its own application separately from the Uber app. The Company opened a branch in London in 2016. The Company changed its delivery fee of 4 US dollars to a price that would be determined by distance. The fees were ranging from 2 US dollars to 8 US dollars.

The Company experienced an increase in its revenue by 124 percent through its Uber Eats services. In 2018 the Company tripled its workforce and expanded its operation in the European markets where it could deliver foods to more than 200 cities.  The Company’s revenue amounted to 1.4 billion US dollars in three months up to 30 September 2019. This growth helped the Company to offset its declining ride businesses. In 2020 March, the Company’s customer base rose by 30 percent; this is because of the coronavirus pandemic, the demand for food delivery surged.

UberEats was ranked number two in 2018 as the most disruptive Company in the world, beaten by Space X only. The Company has diversified in other areas such as ride-sharing, peer-to-peer ride, and other luxury forms, including the Uber Copter. UberEats has successful operations in hundreds of cities in the world, and Uber Freight is gaining traction.

 

 

Comparison and Key Difference

Although Deliveroo and UberEats are both online food delivery companies, they have several differences in their service delivery mode.  Collaborating with service delivery companies can increase the restaurant’s brand awareness and business turnover. This paper will explore the differences between these delivery services.

1. The fee charged for delivery services

The two online companies charge different prices for theirs service delivery. Deliveroo charges 2.5 US dollars plus 25 percent per order, while UberEats charges 5 US dollars plus 30 percent per order. This is according to a journal written in 2018, based on a situation in the Netherlands, prices may change in the future.

2. The Method of Delivery

Deliveroo and UberEats have different methods of service delivery. Deliveroo delivery services work with motorcycle or bicycle couriers who cycle through the city in noticeable uniforms (SHANAHAN, 2020). They do deliverance for many restaurants and do not use motor vehicle means of transport. Uber is known for its taxi services. An individual can hire a taxi through the mobile app, and delivery will be made at their premises. The Company’s staff use cars, scooters or bikes to do their delivery.

3. Platform offering

Another important difference is the way in which Deliveroo and UberEats operates. UberEats company provides a platform to restaurants where customers can login and order food online. These orders will be received by restaurants and delivery will be taken care of. For Deliveroo, restaurants signs in on the delivery services where they offer their meals online. When an order is made by a customer, a courier picks the meal and delivers it to the customer.

4. Types of food delivered

Deliveroo provides delivery of quality food from good restaurants. The Company actually selects meals based on that restaurant’s quality and will cease its operation if the restaurant has too many negative responses from customers (GOSTELOW, P. 2020). On the other hand, UberEats delivers everything from McDonald’s burgers to a good Carpaccio from the nearest restaurant.

It is also essential to look at how these two online food delivery companies are similar to each other. One way in which they are similar is the process of signing into the platform. UberEats and Deliveroo gives an individual permission to manage their menu and provides a full tool for menu management. The second similarity is the driver’s efficiency; Deliveroo is the best, especially with the ability to bump over the orders to the next driver in case of any delays (GOSTELOW, P., 2020). For UberEats is a hit and miss, with some orders arriving at a time while other orders coming later. The order workflow is the third similarity, Deliveroo has the most straightforward workflow, making it easy for the team to manage. The order is automatically accepted, and there is enough time to prepare the order. UberEats workflow is the simplest; the order is received, food is prepared, and then it is delivered; this helps to manage the arrival of the order. The last similarity between Delivaroo and UberEats is their online management panel; both companies have comprehensive holiday settings, menu management facilities, and marketing tools.

SWOT Analysis

Deliveroo SWOT analysis

Strengths

• Cost benefits- Deliveroo controls their apps and workers as gig-based this enables to avoid taxes and employment charges.
• Pricing power- Due to the Company’s competitive strength and strong partnership, Deliveroo is able to reduce competition, ensuring customers make their order at the lowest price possible.
• Effective management- The Company has a strong foundation from William Shu, a banker, and a software director. He negotiated a deal with a giant technology firm, which saw a 275 million dollar investment into the Company.

Weaknesses

• Technical failures- Deliveroo relies heavily on the app service, which has led to several losses over the years (CANT, 2020). For example, in 2017, customers lost their orders and money due to technical crushes. The Company was heavily criticized for not communicating and their poor customer support.
• PR Issues- the Company has faced numerous complaints regarding employee training and safety equipment. The treatment of employees’ rights has made the Company gain a lousy picture from the public.

Opportunities

1. New food trends- increased awareness among people about healthy food delivery options individuals are considering services like Deliveroo as alternative methods to cooking.
2. Partnerships- To be more competitive in the food market, Deliveroo was the first Company to deliver alcoholic drinks (CANT, (2020). The Company partnered with Heineken, which marked the first time alcohol brands offered direct retail services to consumers. Such partnerships allow Deliveroo to have a competitive advantage over other companies.

Threats

1. Competition- The Company has faced intense competition from upcoming companies such as Just Eat, GrubHub, and UberEats from the time it was formed.
2. Changes in tastes and preferences- Deliveroo Company has to adopt the new taste and have partners that offer what is required by the customers.

UberEats SWOT Analysis

Strengths

1. Technology- UberEats has a robust technological department working tirelessly to improve their app experience for customers.
2. Diversifying- Uber has diversified to other services such as rental cars, food delivery, and rental bikes. The Company has managed to bring these services together, thus increasing its revenue, profits, and market share.
3. Convenience- Uber has made ride-sharing cost-effective and convenient; this has contributed significantly to its success.

Weaknesses

1. Straight losses- Though the Company’s revenue has increased, it has continuously reported losses in billions (SHANAHAN, 2020). Uber’s strategy of giving discounts to consumers and bonuses to drivers as way of beating competition is the reason low profits.
2. Over dependency on drivers- Some of the UberEats drivers have been accused of sexual harassment. This reputation has made the Company lose its market share to competitors.

Opportunities

1. Expansion- UberEats can expand its services to developing countries due the establishment of high-speed internet in those countries.
2. Consumer tastes- Uber should the advantage of the fluid transportation market. With the decline in car ownership among individuals living in western countries necessitates the need for more ride services.

Threats

1. Low Turnover- The Company only receives 10 to 20 percent of each ride, thus it remains vulnerable and cannot expand its revenue and share market.
2. Low wages for employees- In 2017, Uber drivers went on strike due to low wages, this destroyed its brand name and reduced profits by losing drivers to rival companies.
3. Rules and regulations- By introducing its services to a new region, Uber is often met with resistance especially from the taxi sector. The set rule have prohibited the Company from operating in some circumstances.

Recommendations

UberEats

I would recommend UberEats to increase its turnover in order to remain competitive in the market. As the number of delivery businesses increase, UberEats can be out of business sooner than later. I would also recommend Uber Eats to increase the salaries of its employees. Through salary increments, UberEats will inherently get competitive advantage ahead of other companies.

Deliveroo

I would recommend deliveroo to do proper market research and understand the consumer preferences. With the dynamic changes in consumer preferences, Deliveroo can be at the receiving end if consumer market is not well researched. Additionally, deliveroo should do market research to understand its competitors. Through perfect knowledge of the market, the firm will implement long term competitive advantage.

Conclusion  

In conclusion, Deliveroo is an online food delivery company that was founded in 2013 by William Shu. Its headquarters are located in London. The Company provides its services in more than two hundred cities in the United Kingdom. Uber Eats is an online food delivery company based in America. It was founded in 2009 by Travis and Garret. Uber Eats began delivering food in 2014 August with the launch of UberFresh service in California. The two companies vary in the mode of delivery, platform offering, type of food and the fee charged for delivery services.

 

 

 

 

 

 

 

 

 

 

 

References

CANT, C. (2020). Riding for Deliveroo: resistance in the new economy. https://search.ebscohost.com/login.aspx?direct=true&scope=site&db=nlebk&db=nlabk&AN=2294391.

GOSTELOW, P. (2020). Food delivery services get more work during the COVID-19 pandemic, 6 April 2020. Philip Gostelow Collection of Photographs

SAIZ-ALVAREZ, J. M. (2020). The Online Platform Economy as an Entrepreneurship-Based Strategy for Value Creation.

SPAIN, P., & SHANAHAN, G. (2020). UberEats causing a bad taste, TIN HealthTech Insights Report, iPhone SE2. https://dts.podtrac.com/redirect.mp3/cdn.simplecast.com/audio/083219/083219e0-dcd5-4385-9d15-8105e91523a6/0e926d29-cbed-4711-8596-8f7dcb0f3d86/nztechpodcast486_tc.mp3?aid=rss_feed

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Appendix

UberEats

Food discovery with Uber Eats

 

UberEats SWOT Analysis

Deliveroo SWOT Analysis

Deliveroo revenue and usage statistics