Economics 13 Report: Analyzing Deliveroo's Business Operations

This report provides a comprehensive overview of Deliveroo, a digital platform specializing in online food delivery. It delves into Deliveroo's ecosystem, highlighting how the platform connects consumers, restaurants, and delivery personnel. The report meticulously examines Deliveroo's business model, dissecting its key components such as key partners, activities, value proposition, customer relationships, and revenue streams. It analyzes how Deliveroo creates value for consumers, restaurants, and stakeholders, emphasizing convenience, accessibility, and brand recognition. The report also explores the regulatory and legislative landscape affecting Deliveroo's operations. Finally, it offers insights into the future of Deliveroo and concludes with a summary of the key findings.

Running head: ECONOMICS
Digital Platforms
Name of the Student:
Name of the University:
Author Note:

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Executive Summary:
The objective of the report is to provide an overview of Deliveroo, the online food delivery
company. The report focuses on the ecosystem and business model of Deliveroo. It also focuses
on the way the online digital platform is able to create value along with a mention of the
legislation/regulations. The report also draws an insight into the future of Deliveroo followed by
a conclusion.

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Table of Contents
Introduction:....................................................................................................................................3
Ecosystem of Deliveroo...................................................................................................................3
Deliveroo Business Model...............................................................................................................5
Creation of Value in Deliveroo:......................................................................................................8
Regulation and Legislation pertaining to Deliveroo:.......................................................................9
Future of Deliveroo and Conclusion:............................................................................................11
References:....................................................................................................................................13

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Introduction:
The report aims at providing an insight into Deliveroo, a digital platform known for
offering reliable and fast delivery of food that consumers are able to track over their phone
(deliveroo.co.uk 2020). The digital platform was found by Gre Orlowski and Will Shu in the
year 2013 and has been based in London. Deliveroo operated in over two hundred cities that
included Netherlands, France, Belgium, Spain, Italy, Ireland, Singapore, United Arab, Hong
Kong, Taiwan and Kuwait. This digital platform saw a revenue growth of about 650 percent in a
particular year. Restaurants partnering with this digital platform was not only able to increase
revenue by 30 percent but was also able to create innumerable jobs in restaurant sector. The
values of the online food delivery firm remained entwined with everything it did. The value
worked together in making decisions related to recruitment or development an evolution of the
team, products or the people. The digital platform focuses on the mission of transforming the
ways in which the customers eat. A vital ingredient of success of the platform lies in having
providing the best collection of the popular restaurants. Through constant expansion and
innovation, the platform offers convenience and best choice and operates with the aim of
bringing direct food to the customers in a matter of 30 minutes.
Ecosystem of Deliveroo
As far as the ecosystem is concerned, online delivery services of restaurant has been
another name for convenience (Yeo, Goh and Rezaei 2017). The increase in the restaurant
delivery service has been found to capture a mass market thereby portraying an impressive
growth annually. Deliveroo has been fighting for the topmost end of market with increasing
number of people using the service on weekly basis. The customers does not seem to rewind on
the access and they therefore look for options to go along with it. The issue is prevalent with

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Deliveroo and its Rooxbox concept (Briziarelli 2019). This concept primarily relates to the space
shortages faced by these operators. Present solutions includes exclusive outlays on the rental
premium, security deposits, rent and the other additional cost. These however act as key barriers
of entry to the business looking forward towards a launch or economic scaling. The emergence
of sharing economy via pioneers like the Airbnd has provided a different viewpoint to people in
overviewing the assets differently. Trust gave rise to safety and increased measures for
protecting both sides of marketplace.
However, being a part of the food business implies that the business is able to access the
sites in desired areas within seconds through leveraging principles of sharing economy (Stephany
2015). The sharing economy represents an economic system where the assets or the services
remains shared between the private individuals either for a fee or free of cost, especially via
internet (Munoz and Cohen 2017). They act as the winners on both the sides of market place and
the site they opt for supplements existing stream of revenue. For example, a successful restaurant
in Central London could not access the prospective delivery market as a result of capacity
constraints within its sites. This has not been due to the lack of trying but the need for
prioritizing the physical customers over the digital ones. The restaurant has also been found to be
constrained by the delivery radius since its location has been in the West End with limited
number of residents in vicinity. The solution to such problem has been to make a move towards
online delivery platforms like Deliveroo. There has also been instances of cafes with hardly any
evening trade. They not only had the required equipment but also the customer but still were not
being able to generate the required revenue. To enhance the evening trade, all they needed to do
is to plug in with the online delivery partners like Deliveroo with hardly any sunk cost and lower
overhead cost. This aided them in having a complete delivery functioning kitchen.

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The host business seems happy in having an additional income which also shows the
green shoots of a sustainable ecosystem of food that leads to larger customer availability along
with increased profitability for the host and the user business.
Deliveroo Business Model
The business canvas model of Deliveroo puts forward a rationale that create, deliver and
capture value for the business (Hong and Fauvel 2013). Some of the components of business
canvas model includes key partners, key activities, value proposition, customer relationship,
customer segment, key resources, channels, cost structure and the revenue streams (Joyce
and Paquin 2016). The description of the components are mentioned in the following paragraphs.
Key Partners: Delivery do not seem to have a partnership program. Nevertheless, the
online delivery platform has been found to form partnerships time and again with other
organizations. For instance, the company formed partnership with Grab which is one of the
topmost ride hailing companies of Southeast Asia. Consumers who has been completing more
than five trips per week qualifies for a free credit worth $40 with Deliveroo. The company also
went into partnership with the Norwich City Football as its official takeaway service supplier.
The alliance included Deliveroo to brand around concourse areas, pitch side and the team’s
stadium.
Key Activities: The business model of Deliveroo ensured providing a delivery service
and thereby ensure the maintenance of a platform between the customer and the restaurant. The
platform included the website and the mobile app.
Value Proposition: Deliveroo puts across five key values that includes convenience,
accessibility, risk reduction, price and status/brand. The company helps in creating convenience

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by making the service easy for the customers and ensuring a delivery within 32 minutes after
placing the order. Deliveroo also offers convenience to restaurants by increasing access and
ensuring connection with the customers who are not interested in visiting the venue. The
company ensures accessibility by enabling the customers in receiving food delivery from
restaurants that do not offer such service especially the premium restaurants. The online food
delivery company also reduced the risk of using the maintaining the packaging temperature for
food. Besides, the driver is also supposed to wait for 10 minutes if the customer is not available.
As far as the price is concerned, the company charges a delivery fee of about £2.50. People
referring a friend also receives a free credit towards meal on completion of the order. In addition
to this the company also established it as a powerful brand in terms of customer loyalty with
closer to 80 percent of repeat customers.
Customer Relationship: It is primarily an automated self-service. Customers has been
found to utilize the website and have limited level of interaction with the employees. The digital
platform also provides personal assistance via email, phone and a live support chat.
Customer Segment: Deliveroo follows multi-sided business model having two
dependent customer segments that are required for undertaking operations. This includes:
a. Consumers: They are the individuals at work or at home who looks forward to food
delivered from quality restaurants.
b. Restaurants: These represents places that does offer delivery service but is in the need
for customers.
Key Resources: This key resources refers to the software platform that serves the
restaurants and the customer segments. The company also depended on its engineers for

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maintaining the platform, service employees and the employees belonging to customer service
department. As a start-up it had to depend on the outside investors that enabled it to raise
$199.59 million.
Channels: The key channel for the customer is the website while the key channel for the
restaurant is the development team. Deliveroo also undertakes promotion through social media.
Cost Structure: The online food delivery company has a cost driven structure that aims
at minimizing the expenses through lower price value proposition and significant automation.
Revenue Streams: Deliveroo comprised of two streams of revenue. One is the delivery
fee from the customers and the commission received from restaurants for every order.
Figure 1: Business Model of Deliveroo

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Source: (Srnicek 2017)
Creation of Value in Deliveroo:
Food delivering business is the trend which has been catching interest of the tech savvy
culture which is present in the world. Thus the company Deliveroo needs to create value for the
end consumers, the suppliers and ultimately for the stakeholders of the company. The business
model of Deliveroo creates value for each of the necessary segments of the business which is
highlighted below (prezi.com 2020).
1. Value Creation for consumers:
The consumers are the major source of revenue for the company and needs to be catered
in a manner which creates value for them. Thus with the presence of various other competing
companies in the food delivery industry the creation of value for the consumers plays an
immense role. This is because the consumers would be willing to switch from one service
provider to another if the satisfaction is not achieved by them.
The consumers get the benefit of receiving food from the restaurants, kitchens which are
there favourite at their doorstep. Thus the consumers can easily stay at home irrespective of the
weather which is outside and enjoy their favourite delicacy. Thus this business provides services
to consumers when they have difficulty in going outside or collecting by themselves. The
company is also trying to expand the consumer satisfaction by opening Deliveroo edition which
are kitchens located in places where the number of restaurants are low. Thus the consumers in
suburbs can enjoy the food and delicacy from restaurants which are located far away from their
residence. Thus enabling higher level of satisfaction for them and also increasing the value of the
company (icaew.com, 2020).

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2. Value Creation for Partners:
The major part of the business models are the partnering restaurants, their satisfaction
plays a dominant role for the business to be successful. Thus the company has come with the
model which would provide all the logistics to the restaurants which would deliver the food to
the end consumers. The restaurants will only need to prepare the food in the kitchen and be free
from all the delivering troubles.
Thus the restaurants can expand their business with the help of Deliveroo and would be
able to have higher profitability. Thus the restaurants would only need to pay a small amount of
commission to the company, for providing the logistics. Thus the value is created for the
Restaurants by expanding their sales while reducing the stress about additional costs for food
delivery (independent.co.uk 2019).
3. Value Creation for Stakeholders:
Thus the stakeholders can be considered as the employees or the large number of food
delivery cyclists and motorcyclists. Thus the company has prepared a model which will use
algorithm to decide which partner should be provided the order. Thus the company is creating
value for employees who want to be classified as self-employed and protecting their identity.
The company is also trying to provide all the benefits to the self-employed employees which
they should be getting as employed individuals. Thus the company is trying to create value for
the stakeholders which in turn helps in the value creation process of the company (Bernhardt et
al. 2016).
Regulation and Legislation pertaining to Deliveroo:

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The rules and regulations are an important part of an economy, which needs to be
followed by all the business in the economy. The food delivering business is also a business but
with a new concept also has to adhere to several laws and regulation. This is because it involves
use of various contracts between the consumers, services providers, food delivery partners and
other such individuals who are directly or indirectly related to the business.
Thus the primary regulation which is faced by the company Deliveroo is the rules related
to confidentiality. Thus the company collects information which is personal about the consumers,
thus the company has to keep the information confidential which is collected. It involves their
names, addresses, numbers and even bank account details. Thus the company is regulated by law
to maintain confidentiality pertaining this information. Thus a breach can cause a company to
face corporate litigations (Zhu, Zhao and Bush 2020).
Thus since the company is involved in the food delivering business, it is governed by the
rules which relates to the hygienic and safety of the food. Thus the company needs to ensure that
the restaurants from which the food is being delivered maintains hygienic condition while
preparing the food. This is important since the consumers put their trust on the service provider
and the restaurant for receiving hygienic food which is not contaminated. The contamination
should also be prevented from the delivery partner’s end and the company should properly train
the employees such that any rules relating to food safety are not broken. Thus this would also
save the company from the litigation from the consumers end.
Since the delivery partners are working on the road to complete the service provided by
the company. The company is liable for the well-being of the delivery partners, since they deem
to act as an employee of the company. Thus the company should provide all the benefits which
are received by employees classified as workers to the on demand employees. This is an issue

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which has been raised by the company to amend the labour laws in the United Kingdom, since
the company wants to provide greater benefits to the delivery partner. This however, is not
possible as per the current laws which are prevailing and hence the company wants the laws to
amend. The company wants to follow the laws which are prevalent in the French economy
pertaining to the labour laws of the country, which tends to benefit the company along with the
employees (Priem, Wenzel and Koch 2018).
Future of Deliveroo and Conclusion:
Thus in this report it is concluded, about the business model of the food delivery service
providing company Deliveroo. The company had an exceptional brilliant business model which
connects the service provider with the service consumer and earning revenue from it. Thus this
enables the expansion of existing business to regions which were not covered before by the
business before. The company creates value for the consumers by providing them comfort and
leisure of their home, while enjoying their favourite food. The company also creates value by
expanding operations in places where there is a lack of restaurants but the demand for the food is
high. The company provides benefits to the stakeholders by various reward schemes and
opportunities. Thus on the whole the company has been creating value for consumers, suppliers
and delivery partners. The company needs to abide by various rules and regulations in the
country it is operating. The company has to maintain the trust of the consumers who are using
the service as very crucial credentials are shared with the company. Also the company needs to
ensure the restaurants are hygienic and provide good services to the consumers. Also the
company needs to ensure timely payments of the service is received by the restaurants, for the
food being provided. The company also needs to abide by all the labour laws which are

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pertaining in the country of operations. This is because the on demand workers are also eligible
for the benefits of the workers which is provided by the company.
Thus the company Deliveroo is truly a sharing economy which provides services to the
consumers on the digital platform.

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