Meal-delivery platform Deliveroo is at the cutting edge of the gig economy, using an army of contractors on wheels to cater to the appetite for convenience
ONCE A FORTNIGHT, Levi Aron straps on his colourful lycra gear – the kind that can be seen a mile away and lights up like a moving disco ball when hit with headlights – and pedals the streets of Melbourne delivering food to parents too tired to cook or executives too drained to get off the couch.
“It’s the exciting part,” Aron says. “You pedal up, lock up your bike and take your backpack off, and start heading up the path or the stairs. As you knock on the door, it’s always entertaining to see who is on the other side. Could be a tired business person, or often you will get people having a real big weekend and they are just in their PJs at seven o’clock at night from the morning before … I haven’t seen a customer who has opened up the door and is disappointed.’’
Aron is a foot soldier in the gig economy, a sprawling mass of humanity all over the world turning pedals, driving a car or picking up a casual freelance job to earn a living – all made possible by the proliferation of digital devices like smartphones.
Need a lift, book an Uber; an IKEA wardrobe assembled, surf Airtasker. But if it’s hot food from your favourite restaurant you want, then it could be Deliveroo or one of the many other on-demand food delivery services whose app you swipe.
Many gig economy workers have abandoned the traditional nine-to-five employment routine to take on task-by-task jobs in whatever role is on offer. They are loyal to no single employer, only to the job they are doing in the moment.
Aron, who has a background in design, manufacturing and the fashion sector, is a little different from the typical freelancer, however. In July 2015, following a senior role at Gabby and Hezi Leibovich’s Catch Group – one of Australia’s leading e-commerce platforms – he joined Deliveroo and his day job now is country manager in Australia for the UK-based company.
One of the fastest-growing food delivery businesses, it is booking around 30 per cent month-on-month sales growth in Australia. But managing that explosive growth doesn’t stop Aron jumping on his bike, the Deliveroo bag perched on his back like an oddly shaped snail shell.
“I enjoy putting on the gear – safety gear, the reflectives, backpack and shirt – and what I’ll do while I’m standing in the restaurant is speak to the restaurant manager – ‘Hey, how is it going? How are you finding orders tonight?’ I really like trying to understand what their business is and the benefits Deliveroo is bringing,” he says. “But I also like riding with the other riders, seeing how they are doing on the night … and just talking to them about how they are enjoying it.’’
Spending three or four hours a fortnight in the saddle and waiting for a pick-up in a steaming hot kitchen puts Aron directly in touch with Deliveroo’s key stakeholders – the restaurants that sign up to the business and pay a commission to the company for every delivery. But the real fun is handing over the food at the other end.
“There is nothing more pleasing, absolutely nothing more pleasing, than knocking on someone’s door and handing over the delivery bag with piping hot food to a customer who is just starving,’’ he says. “You have all different types of customers; you never know who will open the door … you can get a mum with two or three kids gripping onto her who just needs to get that food and make life easier for that night, or you can get some really exhausted business person, could be someone coming back from a sporting event or travelling – it’s a different experience every single time.’’
Deliveroo was founded in 2013 in London by Will Shu and Greg Orlowski. Shu, while an investment banker at Morgan Stanley, became very tired of the limited options – kebabs and pizzas – that could be delivered for all-nighters when he was working long hours at London’s Canary Wharf. He went back to his home base in the US to do an MBA and later, back in London, exploited a gap in the food market with the help of Orlowski, a computer programmer, who later left the company.
Deliveroo recently raised $US275 million, to give it a value
of around $US1 billion. Now in more than 130 cities in 12 countries, it has been joined by other food delivery platforms such as Foodora and UberEATS, all cashing in on the on-demand food industry.
In Australia, Deliveroo holds the largest market share, delivering “thousands of meals every night” in Melbourne (its headquarters), Sydney, Brisbane, Gold Coast and Perth. This month it added Adelaide and Canberra.
It has 30,000 bike and scooter riders worldwide and more than 20,000 restaurants on its books. The service is cashless: restaurants, riders and customers use iPads and smartphones to pay for orders, pay the rider or pay a commission to Deliveroo.
The Australian operation has 100-plus employees (1000 globally), but the industry’s growth is tightly linked to the gig economy as workers look for an extra revenue stream outside their full-time jobs, or students and part time workers vie for work. Its disruptive model, founded on bikers operating in effect as independent contractors paid for each meal they drop off, has been heavily criticised here and overseas.
Australian unions and labour lawyers argue that the business model rests on underpaying workers and have pledged to investigate its hiring processes. In Britain, where they dominate the London scene, Deliveroo riders staged a mass protest last year over a threat of lower wages following changes to their pay structure.
Its Australian boss rejects the claims. “We are confident with our model, and the way our model works and working with independent contractors. Unfortunately there was a lot of misinformation last year: our riders get paid per drop, so they are not being paid per hour but by the drop, per delivery. So what we do with our drivers is we work with them to educate them about when those busy times are – we know, obviously, it’s busy on a Thursday night or a Friday night, Saturday night – and which suburbs are busy, where you want to go. We work with our riders to allow them to make as much money as they possibly can while working as a Deliveroo rider.’’
Deliveroo also offers the ultimate flexibility on employer loyalty. In short, there isn’t any. Deliveroo riders can work for rival food delivery services and can even wear their Deliveroo gear when doing so.
Says Aron: ‘’When we speak to them (our riders) – and we speak to them every day – what they want is flexibility; they want to be able to ride when they want, sit at home when they want, take on a job when they want. And especially being part of the on-demand community, our riders might be riding for us during the day, might be riding for another business. So during meal times they might ride for Deliveroo, and if they are really enjoying riding around having a courier lifestyle, they can also ride for a different company another time.
“We have riders who ride for Deliveroo who also ride for our competitors. They might wear the Deliveroo equipment and deliver to another competitor and vice versa, and that is exactly what we celebrate – that is, the ability of our riders to have flexibility in what they want to do.’’
The key links in the chain are the restaurants, which place their food in a Deliveroo backpack and their reputation in the hands of a Deliveroo rider, who must deliver the food before it gets cold or spoils.
This was the challenge facing Rockpool Dining Group chief executive Thomas Pash, who wanted to link up with a food delivery service but at the same time protect some of the best-known and respected restaurant brands in the country.
“We looked at which foods travel well and which don’t, and we saw that there were some of our brands we can’t travel … and really keep it at that extreme premium level. But there were other foods – burgers, pizza, Asian, sushi – that travel extremely well,” he says. “So we can get that to the customer and still have an amazing experience.”
Pash says the restaurants within his group that are on the Deliveroo platform have increased their sales by 7-15 per cent – using a delivery channel that the business would not normally have had access to.
The platform offers a simple business proposition for restaurants, giving them access to a sector that they ordinarily would not be able to enter, or in which they have had little interest because of the costs of organising their own drivers and infrastructure.
“If a restaurant has more capacity in the kitchen (than just serving its tables) then we go to see them and say: you have a fantastic brand, we could put you onto our platform, we could extend your reach to your customers who may be too busy at work or home to have the ability to come out to you,” says Aron. “While they come to you once or twice a month, this way we are making your food more accessible.
“We have created a new category for them – of delivery