Jun 01, 2020 15:00:00

What is the reason why the “food delivery service”, which has grown rapidly under the influence of the new coronavirus, is running into the red?

It has been said that the food delivery service that delivers meals at restaurants to the doorsteps of homes

has become an indispensable job for people to live, as the outbreak and eating out have been restricted due to the spread of the new coronavirus infection. .. However, despite the importance of its work, the food delivery services industry is still reported to be in trouble.

Everyone's Ordering Delivery, but Apps Aren't Making Money | WIRED
https://www.wired.com/story/everyones-ordering-delivery-apps-not-making-money/

The market size of food delivery services is expanding as the new coronavirus rages. According to a survey by Second Measure, which analyzes consumer trends from the history of credit card usage, the overall food delivery service market sales in April 2020 were double the year-on-year level. thing.

However, revenues from food delivery services have not improved as much as the market has expanded. Uber Eat, a major ride-hailing company, announced that its food delivery service business, Uber Eats, had a 52% year-on-year increase in total transactions in the first quarter of 2020, but the balance after deducting costs etc. was in the red. .. Grubhub, a food delivery service that is being taken over by

Uber, also announced that revenue in the first quarter of 2020 increased by 12% to $ 363 million (about 39 billion yen), but also in the red Is accounted for.

Despite growing demand, food delivery services remain sluggish because the entire industry is exposed to intense competition. In an article released to investors by Grubhub, 'Food delivery service users check multiple services to find better deals and promotions before ordering a meal delivery. , There are also cases where some restaurant owners have menus hidden along with the items they deliver, so that they can receive orders for direct delivery rather than via a food delivery service. '

Under these circumstances, food delivery services are trying to find a way to deal with small independent restaurants rather than large restaurant companies. Grubhub's executives said, `` There is little room left for Grubhub because nationwide corporate brands are competing to negotiate fees, as to the battle between food delivery services over large contracts with large restaurant companies. He said. In contrast, independent restaurants have high expectations for their ability to create demand for food delivery services, so they often drink even if the fees are somewhat high.

However, competition for small restaurants is also intensifying. Already, DoorDash, a food delivery service based in San Francisco, California, has cut half the fees it collects from small restaurants, while Uber Eats charges delivery fees for all restaurants for a limited time until June 30, 2020. We have launched a policy of exemption .

'Food delivery services are losing losses with each order,' said Dan Fleischmann, vice president of venture capital Kitchen Fund, which specializes in food and drink. The new coronavirus pandemic prolongs the economy since there is a high possibility that the following circumstances, the answer is the situation can not be found, 'he said comment was.