DoorDash, the largest food delivery app in the US, has agreed to buy UK delivery platform Deliveroo in a deal worth billions.
Will Shu, CEO and co-founder of Deliveroo, says the takeover means more money will be spent on product and technology.
But what does this mean for the thousands of Deliveroo riders and drivers in the UK, and will anything change for them?
What is DoorDash, and how does it work?
DoorDash is an online service in the US, similar to Uber Eats and Just Eat. The platform connects consumers to local restaurants and grocery services, with deliveries made possible through “Dashers” (delivery drivers and riders). Classified as independent contractors, Dashers are the backbone of DoorDash.
Similar to Deliveroo, it started out as a food delivery company before expanding to other services like flowers and pharmaceuticals.
Today, DoorDash is a giant in its industry, operating in 30 countries and delivering to more than 42 million customers globally.
Why is DoorDash buying Deliveroo now?
In recent years, Deliveroo share prices have taken a hit, making it a more attractive offering to DoorDash. Fierce competition from other online platforms such as Just Eat and Uber Eats means platforms need to innovate fast, and DoorDash believes Deliveroo is ripe for transformation.
As an added benefit, Deliveroo operates in markets that were unavailable to DoorDash until now. These include the UK and several European countries like Italy, France, and Belgium.
DoorDash has a history of buying smaller on-demand platforms in countries like Finland and Germany, further growing its reach internationally. By buying Deliveroo, DoorDash hopes to strengthen its global position and step further into the European market, something it’s been aiming for since its first international expansions.
The Deliveroo takeover is expected to be finalised in the Autumn.
Will anything change for Deliveroo workers?
So far, DoorDash has agreed it will work with the GMB trade union representing Deliveroo’s drivers and riders. This means sick pay, access to union reps, legal protections, and hardship grants will still be available if you’re a union member.
Currently, no major changes have been confirmed, and both DoorDash and Deliveroo have said it is too early to say whether the takeover means Deliveroo’s name will be changed.
However, with more money from DoorDash’s bigger pockets being invested in technology, there could be changes coming to the Deliveroo driver app, algorithms, security measures and potentially even pay structures, although nothing has been announced yet.
DoorDash’s wider offering includes logistics and marketing tools for small businesses, so it’s possible UK drivers may one day find themselves delivering more than just fast food. Think pharmacy prescriptions, hardware store items, or even dry cleaning.
For now, it’s business as usual, but this deal could mark the start of a very different delivery landscape in the UK and beyond.
We’ll be keeping a keen eye on how this develops over the coming months and will keep you updated.
Sources and further reading:
https://www.bbc.co.uk/news/articles/c5yr1nz7jwko https://www.bbc.co.uk/news/articles/cvgp22d2kexo
