Businessmodel of Deliveroo

Customer Segments

Deliveroo has a multi-sided business model, with two interdependent customer segments that are both needed in order to operate:

Consumers: Individuals at home or at work who want food delivered from quality restaurants

Restaurants: Foodservice places that do not offer a delivery service but want more customers

Value Proposition

Deliveroo offers five primary value propositions: accessibility, convenience, price, risk reduction, and brand/status.

The company creates accessibility enabling consumers to receive food delivery from restaurants that do not offer such a service on their own, particularly premium restaurants. It also increases access for restaurants, connecting them with customers who do not want to come to the venue.

The company offers convenience by making its service easy for customers to use. Once consumers place their order on its website, food delivery takes an average of 32 minutes. Convenience is offered to restaurants by providing them with an established delivery service and drivers.

The company offers a price value proposition. It charges consumers a flat, low fee of £2.50 for delivery. In addition, if they refer a friend who completes an order, they can receive free credit towards a meal.

The company reduces risk by using packaging for food that maintains its temperature as long as possible. Moreover, if a customer is not at the destination when the deliveryperson arrives, the driver will wait for up to 10 minutes before leaving.

The company has established a powerful brand as a result of its success. It has strong customer loyalty, with 80% of people using it more than once and return customers ordering every 21 days on average. In the three years prior to 2016, it grew at a rate of 20-25% per month. It currently operates in over 65 cities across Asia and Europe, with hundreds of restaurant partners, and plans to expand to the U.S. Its high-profile restaurant partners include Gourmet Burger Kitchen, Pizza Express, Prezzo, Obica, Tommi’s Burger Joint, Ping Pong, DirtyBurger, and BananaTree. Lastly, it has received positive coverage in many prominent publications, including Bloomberg, TechCrunch, and Forbes.

Channels

Deliveroo’s main channel for consumers is its website, while its main channel for restaurants is its business development team. The company promotes its offering through its social media pages.

Customer Relationships

Deliveroo’s customer relationship is primarily of a self-service, automated nature. Customers utilize its website while having limited interaction with employees. That said, there is also a personal assistance component in the form of phone, e-mail, and live chat support.

Key Activities

Deliveroo’s business model entails providing delivery service and maintaining a platform between two customer segments: consumers and restaurants. The platform includes its website and mobile app.

Key Partners

Deliveroo does not have a formal partnership program; however, it forms partnerships from time to time with other organizations, such as the following:

• The company has a partnership with Grab, Southeast Asia’s top ride-hailing company. Consumers who complete five or more trips per week with Grab qualify for free Deliveroo credit worth as much as $40 per week.
• The company has partnered with Norwich City Football Club as its “Official Takeaway Delivery Service Supplier“. The alliance includes Deliveroo branding around the sports team’s stadium, concourse areas, and pitch side. ### Key Resources

Deliveroo’s main resource is its proprietary software platform, which serves its restaurant and consumer segments. It also depends on its human resources in the form of engineers who maintain the platform, delivery drivers, and customer service employees. Lastly, as a relatively new startup it has relied heavily on funding from outside parties, raising $199.59 million from seven investors as of November 2015.

Cost Structure

Deliveroo has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is likely marketing expenses, a fixed expense. Other major drivers are in the areas of customer support/operations and administration, both fixed costs.

Revenue Streams

Deliveroo has two revenue streams: a flat fee of £2.50 for delivery to customers and a commission that it charges restaurants for each order. The commission fee amount is not publicly available.