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Take-aways on scaling up at Deliveroo

Deliveroo has dramatically scaled up its business from one employee to 2,000 in only five years while managing the tough task of maintaining its focus on three discrete groupings – restaurants, delivery riders, and the end customer ordering food.

Speaking at the Wired Smarter conference in London last week, Will Shu, co-founder & CEO of Deliveroo, detailed some of the challenges the business has faced as it has continued to scale at a significant way in an increasingly competitive sector.

For starters he was told his idea for Deliveroo was likely doomed to fail but he was determined to enter the market: “You need to understand consumers, their pain points and don’t dismiss a new idea as being silly. There was a big incumbent in Just Eat so I was asked why start? And we were asked why we wanted to handle the logistics when the restaurants do it all [with Just Eat]? They did but not that well.”

With his model Shu recognised he had to deal with three separate ‘customers’ and look after their specific requirements: restaurants who are focused on revenues, order experience, and the digital experience with their Point-of-Sale; the riders who are focused on flexibility, pay and increased benefits; and the people who order the food who are focused on price, selection and service. 

A focus on data

At the heart of these relationships is the data that Deliveroo collects and which is used to deliver benefits to each party. For the restaurants Shu says a suite of new data services has been launched that enable them to compare their customer ratings to their peers and view “concrete” feedback.

“We also have account management systems to show them what all the data means. And we sit down with them and explain [the data],” he says.

As for the riders Shu says they ultimately want flexibility: “It means not having staffing patterns, averaging 12 hours per week with us, and not being full-time. And there are low barriers to entry – they just need a phone and a bike. As for rights then my view is straightforward: if you work 40-50 hours per week then you get rights like a full-time employee but if you log-in infrequently then it’s a different situation.”

5-10 year plan

As the business has been scaled-up Shu has moved on from making some deliveries himself every day to now working towards a clear five-to-10 year goal that is based on Deliveroo being the “definitive food delivery company in the same way Spotify is to music”. He makes it clear that the business will not be moving into delivering non-food items.

Part of the future does involve further development of the company’s machine learning capability to ensure it deploys more efficient practices such as riders having less waiting times and customers receiving their deliveries quicker. This has become more complex as Shu says the company now has “50-60,000 riders, 50-60,000 UK restaurants, and a ton of customers”.

Adding to the complexity is Deliveroo’s international expansion plans that have seen it open for business in a growing number of countries including the latest territory Thailand.

“The good news is that we’ve done it in 12 countries already. We’ve learned a lot. The team did Thailand in record time. We work on [attracting] the restaurants and riders initially in order to get liquidity and then we look for early customers. Then we scale up the marketing,” explains Shu.

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