Former Senior Manager at Deliveroo
- Five-year gross merchandise value growth outlook for Deliveroo
- Competitive dynamics and market share vs Just Eat (LON: JET) and Uber Eats (NYSE: UBER)
- Restaurant partnerships and onboarding, and mid-term commission outlook
- Delivery profitability, network density and unit economics
- Deliveroo's Editions concept and grocery growth outlook
Could you estimate Deliveroo’s gross merchandise value growth outlook over the next five years? It is clear that coronavirus has improved demand amid restaurant closures and forced a lot of restaurants to rely heavily on delivery. How might this have influenced your projections?
When you were at Deliveroo, how did its UK-wide gross merchandise value estimates compare to the latest projection of Just Eat’s numbers?
How much of Deliveroo’s business is driven by London compared to other parts of the UK? I would imagine that London represents a significant market for it.
Which markets outside of the UK is Deliveroo having the most success in driving growth?
How large are those markets relative to the UK?
How might market share evolve in London between Deliveroo and major competitors such as Just Eat and Uber Eats? Could this dynamic be reflected outside of London in tier 2 and tier 3 towns and cities?
How quickly might the Deliveroo Plus membership base grow, and what are the retention rates or churn characteristics of those types of customers?
Do you think that Deliveroo Plus is a commercially viable proposition in the longer term? You mentioned that volumes would decrease for a Plus subscriber, but wouldn’t they be ordering more frequently than the average Deliveroo customer?
Could you estimate the percentage of total volumes is made up of Deliveroo Plus orders? Is it a significant part of the business?
I would expect AOV to be about GBP 20 across other platforms. Is that reasonable for Deliveroo in aggregate?
How might a Deliveroo Plus order normally compare to the average?
Could you estimate the YTD gross merchandise value in relation to order volumes for Deliveroo in the UK? Just Eat reported UK order volumes of about 123 million as of the end of Q3 2020. Using an average GBP 20 AOV, that would generate roughly GBP 2.5bn in gross merchandise value.
How might Deliveroo’s restaurant partnership selection strategy evolve?
Could you estimate the average commission being paid by restaurants using the Deliveroo platform?
Do QSRs [quick-service restaurants] pay a substantially lower rate of commission than independents? Is this dynamic a reflection of market share?
Is Deliveroo more adept at keeping commission rates higher for QSRs than other delivery aggregators? It was reported that the commission rate for the Uber Eats-McDonald’s agreement might have been a little lower than the low 20% average you mentioned for Deliveroo. Is that reasonable?
What market share would you estimate QSRs have on the Deliveroo platform relative to independent restaurants?
Do you think that Deliveroo’s use will trend towards QSRs over time, or are aggregators getting better at onboarding and promoting independents over QSRs?
Can Deliveroo promote independents over QSRs on its app, to direct customers towards more profitable restaurant inventory?
Do you find that consumers spend more on Deliveroo’s platform with independent restaurants than QSRs in aggregate? Is it reasonable to infer that the average item price on QSR menus is probably lower than the average price on the menu for independent restaurants?
You mentioned GBP 15-16 AOV?
What do you think has driven the AOV increase? Are people opting for different inventory, or is that restaurants are adjusting menu pricing to account for commissions?
How frequently were customers typically ordering with Deliveroo?
How important is grocery delivery to making Deliveroo’s logistics model viable and profitable in regions outside London and other dense cities, where Just Eat’s marketplace model dominates?
How would you incorporate the unit economics of a typical grocery order into the business’ model? Presumably, people will spend more on grocery orders. What are your expectations for the average basket in grocery vs normal food delivery?
Though the model is still being ironed out between grocers and platforms, what is your estimate for the potential commission rates?
Do you think Deliveroo’s logistics network will benefit from the incorporation grocery deliveries? Is there a potential to stack different kinds of orders – to combine pick-ups and deliveries for grocery food orders?
Would you say that if Deliveroo is unable to stack orders, adding grocery deliveries won’t offer a solution to its difficulties in operating at peak times in lower-density markets?
How could Deliveroo overcome the logistics of making insufficiently dense suburban and non-London markets sustainably profitable per order? It seems that in those markets, the average order becomes unprofitable if the drivers have to travel too far.
Do you think that Deliveroo and Uber Eats can compete with Just Eat in suburban markets?
Could you assess the performance of Deliveroo’s Editions and Editions kitchens division? How significant a component of total orders does Editions represent?
Are the impacts on unit economics for Editions positive compared to non-Editions?
What is the net impact on cost of delivery when using an Editions kitchen? You mentioned that the process can be highly optimised by stacking riders and getting food out of the kitchen quickly.
Do riders typically travel a shorter distance with an Editions kitchen and does that factor in their utility?
I thought there was a flat fixed fee per delivery that also accounted for distance depending on how far the rider had to travel to deliver the order. Is that not the case with Deliveroo?
What was the average comp for a rider when you were at Deliveroo?
How many drops on average would you expect the rider to be making each hour and what’s the comp for that?
What is the Editions fee model? Do restaurant partners pay additional fees when joining an Editions kitchen, or is the space rented?
Are there any concluding thoughts you’d like to share with the audience?
Gain access to Premium Content
Submit your details to access up to 5 Forum Transcripts or to request a complimentary one week trial.
The information, material and content contained in this transcript (“Content”) is for information purposes only and does not constitute advice of any type or a trade recommendation and should not form the basis of any investment decision.This transcript has been edited by Third Bridge for ease of reading. Third Bridge Group Limited and its affiliates (together “Third Bridge”) make no representation and accept no liability for the Contentor for any errors, omissions or inaccuracies in respect of it. The views of the specialist expressed in the Content are those of the specialist and they are not endorsed by, nor do they represent the opinion of, Third Bridge. Third Bridge reserves all copyright, intellectual and other property rights in the Content. Any modification, reformatting, copying, displaying, distributing, transmitting, publishing, licensing, creating derivative works from, transferring or selling any Content is strictly prohibited