Recent News
‘They’re stealing our customers and we’re tired’: is Deliveroo killing restaurant culture?

The take-away service may have looked like a lifeline during the block, but your ambitious vision will drastically change the way we eat

The Shukran Best Kebab – the best Turkish restaurant in the Seven Sisters area of ​​north London, according to some people (although it is surrounded by fierce rivals to the throne) – joined Deliveroo two years ago and, at the time, looked like a no-brainer. “Life as a small independent restaurant is difficult and profit margins are minimal,” says Hüseyin Kurt, owner of Shukran. “We wanted more customers and money and Deliveroo seemed to offer that. I didn’t think there was a disadvantage. ”A few days after signing a contract with the company, a brand new tablet computer arrived, in which orders made via Deliveroo appeared from the ether with a satisfactory ping.

The feeling that something was wrong was gradually arising. Kurt, a gregarious bearded man in his 40s, who left his hometown in central Anatolia in 1995 and used his love of food to build a new life in the UK, calculated the numbers: with the Deliveroo commission coming at 35% more VAT on each order, he was forced to increase his prices so as not to lose money on each sale. This meant that anyone who purchased their huge adana kofte or mixed kebabs through the Deliveroo app was paying three surcharges for convenience, as Deliveroo also charged a delivery and service fee. This went down badly with previously loyal customers, who were introduced to a large number of competitors with many discounts when using the app.

The more Kurt thought about it, the more he wondered what his restaurant should gain from this deal. When things went wrong, like a delivery driver not showing up or someone complaining about a lost item, he could be hit with a financial penalty, and it was almost impossible to contact a human being at Deliveroo to resolve this. And, over time, Deliveroo has been learning more and more about its clientele, while its clients have become increasingly distant from it. “It looked like Deliveroo was getting money and information from all angles, while other people – us at the restaurant, the drivers who were going to take the orders – did all the work,” he says.

That’s when strange rumors started to revolve around the local restaurant scene. Deliveroo was said to have started building his own kitchens in a vacant lot on the road, across the Hornsey railroad; the newly installed units had no windows, people said, and a security guard was placed at the door. Kurt couldn’t understand. “What do you think is going on over there?” he asked other restaurant owners. “What does Deliveroo know about cooking?”

If you live in one of the 150 British towns and cities now served by Deliveroo, the company’s turquoise logo probably looks ubiquitous today: pasted on stickers inside windows to take away, dangling on the backs of cyclists and motorcyclists, flashing on television sets during the Evening news. The much-vaunted fluctuation in Deliveroo’s stock market last month dominated the headlines, as did the rapid drop in its stock price after large institutional investors chose to avoid it. Many cited concerns about the company’s corporate governance and possible legal challenges for its 50,000 delivery workers, who are currently classified as self-employed contractors, rather than salaried employees.

The Bureau of Investigative Journalism recently stated that a significant proportion of the pilots he selected earn less than the minimum wage, including some who receive just £ 2 an hour; Deliveroo claims that passengers earn an average of £ 13 an hour during peak hours (although this does not take into account periods when few or no orders arrive) and that fees paid to passengers are increasing year on year.

Huseyin Kurt of Shukran Best Kebab in Tottenham. ‘It felt like Deliveroo were taking all the money while others did all the work.’
Source: Theguardian

In the midst of these controversies, an important fact about Deliveroo went relatively unnoticed: the company that the chancellor, Rishi Sunak, calls “the true success story of British technology” never made a profit – even during the Covid blockades. It is difficult to imagine a more fortuitous set of circumstances for Deliveroo’s business model than the pandemic, which led most people to spend several months under house arrest while pubs and restaurants close their doors. But despite seeing a huge increase in demand (total orders in the first quarter of 2021 were more than double the same period last year), the company ended up cutting a quarter of its jobs in 2020 and had a major injection money from the Amazon to avoid ruin; this year, a loss of almost £ 300 million is underway. And yet, the financial markets still value the company at around £ 5 billion.

“In a world where consumers want more, better and faster, we think Deliveroo is doing a good job,” concluded a report by private investment bank Berenberg earlier this month. Many people who make money from money are betting that Deliveroo is on a long-term path to profitability, even though its current configuration pushes the company even further into the red with each order. “We really believe that we are still getting started,” said Deliveroo founder Will Shu, in a letter to potential shareholders. “Join us on this journey.” But what is the final destination of this journey? And what will be the implications – for the way we eat, the livelihood of those who feed us and the future of our neighborhoods – when we arrive?

est Green Road, home to the Shukran Best Kebab, extends over a kilometer across north-east London – from Ducketts Common in the west to the Tottenham’s Latin Village market in the east. Step left or right out of Kurt’s door and you’ll find yourself immersed in one of the capital’s most dense and diverse independent restaurant scenes. Nigerian customers scrub at Korean fast-food restaurants; Polish coffees combine with Ghanaian bakeries, Caribbean takeaway food and Ugandan charitable cuisines. Almost all of them are run by families or owned by just one or two people who live on the premises.

“The whole planet is here,” says João Castro, owner of Bom Pecado, a Portuguese restaurant whose name means “Bom Pecado”, which is famous for its hearty stews and cream puffs. Castro says the fusion of culinary cultures on the road lends itself to fortuitous interactions. “It is a special social place,” he says. “People end up sitting next to strangers and finding out who they are.”

Before most of us walked around with smartphones in our pockets, the West Green Road restaurants that offered delivery services handled the deliveries themselves. In the mid-2000s, Just Eat, today the largest player by far in the UK food delivery market, began adding local takeout options, allowing customers to browse a variety of nearby dining options on a single website , instead of having to struggle with a folder crammed with paper menus tucked into the mailbox. But deliveries were still largely managed internally, at least until 2013, when Deliveroo started a new generation of highly competitive “food delivery platforms” that provided restaurants with a complete delivery logistics toolkit – from delivery terminals. requests to a network of drivers on demand. The days of grainy movie ads for the local curry house were over; before long, Snoop Dogg was promoting his closest chicken balti during prime time on TV.

At first, many establishments on West Green Road avoided Deliveroo and its rival Uber Eats. On the one hand, Deliveroo was geared towards the richest end of the market – “the Waitrose of restaurants, while here we are more Tesco or Aldi,” says a Tottenham restaurant owner. On the other hand, many were happy to focus on customers who ate meals, only sending meals in a taxi if necessary. But the pandemic changed everything: overnight, access to a reliable delivery infrastructure and a ready group of delivery customers went from being a niche luxury to becoming a vital survival mechanism. Almost all food outlets in the area have already joined the platform, including several unlicensed and grocery stores, an important new target for the company in its quest for perpetual growth. “Deliveroo is here to deliver to restaurants that want to continue offering their amazing food to families at home during this difficult time,” said Shu, when the country’s first blockade took effect.

Deliveroo couriers are now a familiar sight in many UK towns and cities.
Source: Theguardian

However, talk to restaurant owners about their experiences with Deliveroo last year, and a more complex picture will emerge. The Observer talked to several neighborhood coffee and restaurant owners and, with one exception, which is largely neutral, they are all critics of the company. Everyone insists that commission levels are too high and that local independents are paying more than the odds compared to national networks and prestigious brands. There is also anger that restaurants are at the mercy of Deliveroo’s way of classifying them within the app, with little transparency as to why some outlets are at the top and others are lost in the obscurity below.

“They woo you with sweet words and push users towards you at first, so it looks like it’s working, so you fall like a rock,” says one. “They’re stealing our customers and we’ve had enough – we’ve told them to come and remove their machines,” says another, referring to the fact that when a restaurant enters the platform, it can bring with it a number of devoted fans who deliver can sell to other restaurants. “It’s theft, plain and simple.”

None of the interviewees envies Deliveroo the right to charge restaurants for the service it provides. Their complaints revolve around the fact that, by assuming the role of market guardian, the company has a responsibility to play fair and, in this respect, falls short. There is much speculation that preferred restaurant names, of the type rarely found in this part of the city, are able to close deals better than smaller establishments that are rooted in their communities, but have no economic influence when it comes to negotiating fees. Many refer to the fact that, unlike its own companies, Deliveroo pays no corporate taxes in the UK, and restaurant owners suspect that the net effect of company operations is that money flows from a poor neighborhood – Tottenham’s unemployment rate is currently the fastest growing in the country and its level of child poverty is almost double the national average – and reaches the pocket of distant global investors.

But despite these complaints, almost all restaurant owners say they have no choice but to stay on the platform, because that’s where customers are now. Almost everyone requested anonymity in this article for fear that speaking out against Deliveroo could cause them to be downgraded in the app’s search rankings. The Observer requested an interview with a Deliveroo representative to discuss criticism from its restaurant partners, but was informed that no one was available.

In a statement, the company said it was proud to work with more than 50,000 passengers and 46,000 partner restaurants in the UK and that it helped the latter boost its growth during the pandemic. “They are at the heart of our business and their well-being and success are our number one priority,” he said. “We have also introduced a wide range of support measures to help our community, from the £ 16 million Rider thank you fund to the new £ 50 million community fund, which will directly support passengers and partner restaurants.”

Underlying many of the restaurant’s concerns is something more intangible: the fear that, as many of us get used to selecting lunches or dinners via a smartphone, our relationship with the food itself and the social context that surrounds it is changing. Kurt comes from the Kayseri region in Turkey, as do the owners of several ocakbaşı or “grilled” restaurants in the area; for him, the local takeaway is a rich map of cultural references – something closely linked to physical geography, in the land where its cuisine originated and in the places where it is now prepared. For customers, eating in small restaurants offers some exposure to this reality; on the other hand, ordering a meal through a food delivery platform, where identical-looking options are likely to be classified by the size of the discounts offered or the speed with which a third-party rider can deliver to you, is an abstract process.

“The interface of an application like Deliveroo appears to be completely flat, although it is built on data generated in real places, by real people,” says Adam Badger, an academic at Royal Holloway, University of London, who specializes in this subject and also worked as a messenger. “Restaurants become data entry; delivery people are just a loading bar that moves from left to right on a screen. ”Like all seemingly flat surfaces, Deliveroo’s hard edges are out there – you just need to know where to look.

The Deliveroo Editions website in Cranford Way, north London, sits at the back of an electricity substation, squeezed between a boxing gym on one side and overgrown grass on the other. Despite the noise of motorcycle engines coming and going from the entrance, and truck beeps backing up into the adjacent storage and storage complex, it seems eerily quiet. You could sit here for hours and hardly ever hear a human voice.

Like most “dark kitchens”, it occupies marginal lands: spaces that are neither, urban cutouts that easily go unnoticed. Other Deliveroo Editions sites in the UK can be found at the back of industrial parks or below traffic overpasses. They typically consist of up to 16 metal boxes about the size of shipping containers, packed on a piece of asphalt with generators buzzing between them. Compared to West Green Road, Cranford Way looks like a different universe and is still less than half a mile from one end of the street. From here, offers from Pizza Express, Shake Shack and “Cluckleberry Finn Fried Chicken” – a delivery-only outfit that you won’t find anywhere outside the Deliveroo app – are pumped into the city. Thousands of people live in the area of ​​influence of Deliveroo for the Shukran Best Kebab. Most of them are now, unknowingly, also in the area of ​​influence of the Deliveroo Editions.

One of Deliveroo’s dark kitchen sites in London.
Source: Theguardian

“Dark kitchens” are places where meals are prepared entirely for delivery. They have been used for decades in areas such as catering for mass events, but the idea of ​​targeting them for homemade items is relatively recent. It is a leap that was only possible with the emergence of food delivery platforms, and the global leader of the concept is Deliveroo, which opened its first dark kitchen in London in 2016. Today, the company has 250 in eight countries, each of them they are home to a fluid variety of tenants, including international restaurant chains, tentative startups and virtual brands, some of which may “exist” in the app for just a few weeks.

For many, the notion of a series of different cuisines emerging from the same kitchen – with a chef simultaneously preparing a pizza on one work surface and a Sichuan hot pot on another – seems disturbing, but reflects the logic of the abstract digital market; the New Yorker recently described dark kitchens as “the culinary equivalent of a multi-colored retractable pen”. To make a successful operation, you need to know what color to use and this is where Deliveroo’s vast data stores come to the fore. “Using our own technology, we can identify specific local dishes missing in an area, identify customer demand for this missing cuisine and choose the brands that are most likely to attract customers in that area,” said Deliveroo property acquisitions manager Patrick Weiss. .

As the company’s prospectus for its fluctuation reveals, Editions are at the heart of Deliveroo’s vision of the future and its plan to win wars over delivery applications. “With unrivaled global experience, we are in a unique position to scale this concept,” says the company, and many investors agree. “Deliveroo already has a large database of consumer preferences,” said Ioannis Pontikis, a stock analyst at financial services company Morningstar. “And after setting up a dark kitchen, it’s very easy to try new brand ideas, new food concepts, new marketing and promotions.” Pontikis points out that dark kitchens not only have an advantage over traditional restaurants when it comes to generating demand: they also benefit from a better economy of unity – that is, a lower cost for each meal produced.

The restaurants established on West Green Road may have spent years building a fixed infrastructure, a trustworthy reputation and a place for themselves in the area. But when it comes to being able to cheaply predict, produce, advertise and deliver any specific meals you want in zip codes near any specific time – hamburgers and wings on a Saturday afternoon during an England football game, for example, or comforting bowls of noodles on a rainy weekday night – Cranford Way takes everyone out of the water.

For both existing restaurants and beginners, there are some advantages to dark kitchens. In cities plagued by crippling rents, opening a store on one of Deliveroo Editions’ websites, instead of making an expensive and uncompromising rent on the street, is a relatively inexpensive way to test demand. Some of Britain’s most innovative food outlets started life as pop-up cafes or mobile trailers at festivals; for many, dark kitchens are the next step in bringing their food to a wider audience. And in the context of the pandemic, during which almost all restaurants have essentially become dark cuisine at some point, production locations for delivery alone were arguably a lifeline.

Rosa’s Thai Cafe, a restaurant that started as a husband and wife operation, and has since grown into a small chain of 24 stores in the UK, opened four dark kitchens in the Covid era, including one on Cranford Way. Its chief executive, Gavin Adair, believes that the concept can help reduce barriers to entry for established and novice restaurants and should not be seen only as a threat to existing businesses. “You don’t have a long-term commitment, which is one of the things that has stumbled upon some companies that have tried to grow in the past,” he says. “These kitchens may end up helping to prove that there is enough interest in our product in a specific neighborhood for us to eventually open a full restaurant there. Fundamentally, we are sure that we are a restaurant company with an auxiliary delivery operation. It is not an or / or. “

Deliveroo likewise insists that the Editions model is designed to support existing restaurant locations on the street, not replace these facilities, and says that its Editions’ kitchens saved some restaurants from bankruptcy, allowed local brands to expand nationally and helped small businesses to grow established names.

But the increasingly expansive choice of restaurant for consumers is not necessarily good news if the playing field is not level. Deliveroo refuses to disclose the commission fees it charges from different partner restaurants, but Adair recognizes that when it comes to the application-based delivery economy, his company is in a privileged position because of its “strong relationship” with platform; few restaurants on West Green Road can say the same. And a fast future of transient and disposable virtual brands and visits to industrial parks is not very promising if your restaurant is woven into the structure of a real place, especially if the data used to build that future was collected from the hard graft from companies like yours. Pontikis is convinced that, leaving out coronavirus blockages, there will always be healthy demand for some restaurants, especially those at the high end of the market. But he says that small packages run by families that traditionally depend on local awareness and accessibility may have a harder time distinguishing themselves in a market that is all about convenience. His long-term fate, he says, remains “the million dollar issue”.

Kurt insists that if dark kitchens start offering meals that directly rival his own, he will rip the Deliveroo sticker out of his window and throw it in the trash. But it may already be too late. Deliveroo is no longer the only company in the dark kitchen market: Foodstars, recently bought by former Uber chief Travis Kalanick, already operates east of Shukran Best Kebab, on the edge of a waste processing plant; Last year, Karma Kitchen, which has just invested £ 250 million in new investments, opened its own kitchen for deliveries less than two miles north.

In March, Reef, an American company that buys parking lots with the goal of turning them into “poles for the economy on demand” – offering a space for everything from vertical agricultural units to emerging package sorting depots and, of course , dark kitchens – announced that he was working with the owners of the Wood Green shopping mall, 10 minutes by motorcycle from Kurt’s front door. In Miami, Reef is experimenting with the use of robots to deliver meals, a move that some analysts believe Deliveroo is likely to copy over the next few years. In China – where the nexus between food delivery platforms and dark kitchens is more advanced, and the market has been sewn by two of the country’s biggest technology giants, Alibaba and Tencent – data and automation have combined to allow the creation of specialized production designed to produce a single popular dish without any human involvement. Most people today think of Deliveroo as an app that connects local restaurants to delivery drivers. But standing on West Green Road, with dark kitchens closing quickly, it’s hard not to suspect that the end goal of the venture capital-subsidized food technology industry may be to end both.

In the meantime, however, Deliveroo still has to deal with real people and restaurants, many of whom are increasingly fearless of making noise. Earlier this month, strike pilots from Deliveroo in central London protested for a minimum wage on the day the company launched on the stock market. Upon arrival at Deliveroo’s headquarters, where London city police officers guarded the doors, the president of Britain’s Independent Workers’ Union, which represents some of the delivery workers, addressed the crowd. “As the pandemic continued and you put your lives and those of your families at risk to deliver food,” shouted Alex Marshall through a megaphone, “this company is getting richer and richer, even with its own payment and conditions have worsened ! ”More strikes, protests and legal challenges from the pilots are being promised. According to Deliveroo, internal surveys indicate that 89% of passengers are satisfied or very satisfied with the status quo and that there is “overwhelming” support for the company and its flexible working model.

Protests by Deliveroo couriers after the firm was listed on the stock market.
Source: Theguardian

This has not prevented the emergence, in recent years, of a series of basic alternatives for the main food delivery platforms – from regional mail collectives to online services that allow small restaurants to sell delivery options directly to customers, without using them. from Just Eat, Uber Eats or Deliveroo. A Deliveroo pilot is helping to build an ethical food delivery platform soon to be launched in North London, promising a guaranteed minimum wage for drivers, zero-emission vehicles and a refusal to work with large networks or dark kitchens; now, some restaurant owners are also taking action. Henal Chotai, owner of the Red Cup Cafe in Harrow, northwest London, with his wife, Reena, is co-developing an ecological delivery service called FoodeBikes; he believes that as the UK comes out of the blockade, the public’s appetite for platforms that do a better job of supporting independent restaurants is growing rapidly.

“The independent restaurants in this country are on their knees now, but at the same time, the value of what we bring to society – the importance of real human hospitality, the places where you go and have happy memories – has been expanded,” Chotai says. “We are bruised and bruised, but we are ready to fight for our future. So I beg everyone, when they can: go out and visit your small local restaurant, find a way to buy directly from them. We have been here for our local communities and we need our local communities to help us – and the country in general – to recover. “

Other tech giants – Uber for taxis, Airbnb for vacation homes – ended up facing public and regulatory reactions, although in many cases this did little to cut their wings. In the wake of a recent court decision requiring Uber to reclassify its drivers as workers rather than as independent contractors, Deliveroo may soon be heading in the same direction. In the end, however, neither small legislative adjustments nor individual consumer choices alone will be enough to turn the tide, unless we decide as a society that the food delivery platform model as it is currently designed will damage things with the that we care about, like local restaurants. or workers’ rights.

Henal and Reena Chotai, who are trying to set up their own eco-friendly delivery service in London.
Source: Theguardian

Badger argues that Deliveroo is a product of the economic and political systems that support it; if we want it to work differently, we have to start there. “This is a company that reflects and replicates the structures of monopoly venture capital,” he says. “For decades, we had a delivery market that was not a monopoly – it was the opposite, it was fragmented and local. So, speculative financial interests changed that. Yes, there are existing regulations, especially on labor rights, to which Deliveroo must adhere, and new ones that must be introduced. But more broadly, if we want Deliveroo to have better priorities, we all have to fight for a better society. Deliveroo are not the problem in itself. “

Deliveroo continues to expand: the company plans to establish itself in 100 more British cities this year and hopes to become the first thing any of us thinks about whenever we think about food. “Our mission is to be the ultimate online food company,” the company recently announced. “The way we think is simple: there are 21 meal occasions in a week – breakfast, lunch and dinner, seven days a week. At the moment, less than one of these 21 transactions takes place online. We are working to change that. “

In a sense, the company is right: changes in the way we eat are inevitable. The history of takeaway has been evolving since the Roman Empire served lentils for travel in thermopoly and vendors in the Aztec market flogged tamales; it would be a mistake to romanticize a culinary past in which various forms of exploitation were ubiquitous. But it is worth remembering that every reconfiguration of the way we live and the resources we count on, including restaurants, meals and the people who produce and deliver them, involves a reconfiguration of power, creating winners and losers. Global investors are betting billions on a future driven by apps and dominated by the dark kitchen, and it is clear who will come out triumphant if that future materializes.

“We, this street, everyone around here … help make Deliveroo rich,” says Kurt. “But what is good for them will be good for us?” The answer to that question – for the Shukran Best Kebab and thousands of other small restaurants like him – is in our hands.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.