Deliveroo doubles orders during latest Covid lockdown

Deliveroo doubled order numbers during the first three months of the year as coronavirus lockdowns helped it in its debut results following a stock market float beset by concerns over its treatment of workers.

The takeaway delivery company received 71m orders during the quarter, a 114% year-on-year increase, according to results published on Thursday.

Deliveroo’s platform handled transactions worth £1.65bn during the period, a year-on-year increase of 130%.

Deliveroo’s strong growth came with customers in some of its main markets locked down for most of the period. However, Deliveroo acknowledged that growth was likely to decelerate after the reopening on Monday of restaurants and bars that can serve customers outdoors, meaning spending is likely to shift away from the stay-at-home economy.

Uncertainty over how Deliveroo will fare in the coming months was cited by investors among concerns that the company’s IPO at the end of March was overpriced. Deliveroo faces intense competition from the likes of Just Eat Takeaway and Uber Eats.

Multiple large investors, led by Aviva Investors, said Deliveroo’s treatment of workers was another important reason they would not participate in the float.

Deliveroo insists that its 100,000 workers are independent contractors, a status that means it does need to match rights for salaried employees such as sick pay or holiday. Workers marked Deliveroo’s float by marching past its headquarters in protest at working conditions.

The company’s shares slumped by 26% on the first day of trading. On Wednesday’s closing price shares were 30% below the 390p mark at which they floated, valuing the company at £4.6bn.

Will Shu, Deliveroo’s founder and chief executive, said he was “delighted” with the first-quarter results, but added that the company was “mindful of the uncertain impact of the lifting of Covid-19 restrictions”.

He said: “While we are confident that our value proposition will continue to attract consumers, restaurants, grocers and riders throughout 2021, we are taking a prudent approach to our full-year guidance.”

He expects Deliveroo to make a gross profit margin of between 7.5% and 8% on all transactions this year – although that does not include several costs, such as expansion or IT investment. Deliveroo has not yet made a profit.

Growth was fastest in the UK and Ireland, but international cities including Paris, Berlin, Sydney and Hong Kong accounted for nearly half of transactions – although the company said there had been an “uneven impact” from lockdowns between cities.

Deliveroo said it had 7.1 million monthly active users during the first quarter, almost double the 3.7 million it counted a year earlier, before the extent of the pandemic became clear.

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