Deliveroo PESTEL Analysis
- UK Government has been urged by online-food ordering platforms to loosen immigration rules to allow for more curry chefs to meet demands in the restaurant sector. Currently visa decisions are informed by EU laws, this is set to be tightened when the UK leaves the EU (Sullivan, 2017).
- UK Government is investigating the modern employment practises for online-food ordering platforms and stating that these companies pay should link more closely to the minimum wage. Currently companies like Deliveroo do not fall under the minimum wage laws and use this advantage to keep prices competitive (Ram & Shubber, 2017).
- With Britain in negations to leave the EU, Deliveroo are facing a harder time to compete for a shrinking pool of workers. The weakening pound and economic prospects have led to many workers choosing not to remain in the UK (Warrell & O'Conner, 2017).
- For food takeaway companies, the UK leaving the single market has left importers facing and extra £1.2bn in costs. As a result, this would rise average import tariffs to 22% and affect the food industry who would have to pass the cost onto customers (Vina, 2016). Economist's argue that already customer uncertainty from previous recessions will further fracture the delicate retail systems when Britain leaves the EU (Buttonwood, 2016).
- With Brexit, forcing a lot workforce to leave the UK, Deliveroo is looking to a new workforce of student labour to meet demands. However, with current lawsuits impacting pay, Deliveroo is facing a PR crisis with new workers not joining the company as quickly as demand requires (Butler, 2017b).
- Deliveroo is also being investigated for their low safety standards with new employees. Allegations of a lack of health and safety training, food and road safety are leaving the company facing increased costs in meeting UK safety standards (Butler, 2017a).
- Companies like Deliveroo deliberately working with healthy food options are causing a cultural shift away from the traditional perception of unhealthy takeaway food with the public beginning to see it as a regular convenient healthy alternative to cooking (Mintel, 2016).
- Innovation in smartphone technology has led to a growth of 21% in the 16-24 age group uses services like Deliveroo when ordering food takeaway (Mintel, 2016)
- Innovations in the development a custom app has allowed Deliveroo to create a low-maintenance workforce who can be easily communicated via one app. The has led to a reduction in traditional delivery service set-up costs and helped Deliveroo become market leaders (Mintel, 2016)
- To meet rising demands for takeaway orders. Deliveroo are trialling automatous kitchens which directly communicate with the app orders. Deliveroo expect by cutting out the 'middle-man' for delivery volume to increase by 500% (Murgia, 2017)
- Through the emphasis of using a fleet of bicycles and scooters, Deliveroo operates an environmentally friendly service which aims to reduce congestion and pollution when compared to cars and other delivery vehicles (Deliveroo, 2016)
- Deliveroo actively works with local European authorities to help develop and communicate initiatives to support businesses and the potential impacts of climate change (Deliveroo, 2016).
- Deliveroo are facing discrimination lawsuits with over two hundred employees joining a claim arguing that the company fails to provide minimum wage, holiday pay and age discrimination. If forced to improve pay or terms for its self-employed couriers, the company's costs could increase dramatically (Ram & Shubber, 2017).
- Deliveroo are also facing a London-based employment lawsuit arguing the company is preventing employers from joining any unions and gaining workers' rights. This action is forefront to other potential employment lawsuits against self-employed app contractors like Uber and TaskRabbit who have criticised for the lack of workers protection offered to people who work on their platforms (Pooley, 2017).
Banks, T. (2016) Is Deliveroo rebrand about gaining global appeal or reducing controversy? Marketing Week. [Online] Available at: https://www.marketingweek.com/2016/09/05/deliveroo-hopes-new-rebrand-will-reduce-controversy/ [Accessed 22/07/17].
Blake, I. (2017) Is Deliveroo growing too quickly? Food delivery app crashes AGAIN leaving hundreds without their takeaway and a stream of complaints on Twitter, Daily Mail. [Online] Available at: http://www.dailymail.co.uk/femail/food/article-4147846/Customers-angry-Twitter-Deliveroo-crashes-again.html#ixzz4nq0GemSS [Accessed 22/07/17].
Butler, S. (2017a) Deliveroo accused of 'painting a false picture' at work tribunal. The Guardian. [Online] Available at: https://www.theguardian.com/business/2017/may/25/deliveroo-accused-painting-false-picture-work-tribunal-self-employment [Accessed 21/07/17].
Butler, S. (2017b) Deliveroo accused of 'creating vocabulary' to avoid calling couriers employees. The Guardian. [Online] Available at: https://www.theguardian.com/business/2017/apr/05/deliveroo-couriers-employees-managers [Accessed 21/07/17].
Buttonwood. (2016) Brexit means…higher prices. The Economist. [Online] Available at: https://www.economist.com/blogs/buttonwood/2016/10/economic-impact-devaluations [Accessed 21/07/17].
Deliveroo. (2016) Introduction to Deliveroo. European Commission. [Online] Available at: http://ec.europa.eu/information_society/newsroom/image/document/2016-6/deliveroo_13855.pdf [Accessed 22/07/17].
Goodfellow, J. (2017) Deliveroo to build 'one of the UK's largest tech hubs' as it creates hundreds of jobs in new London office, The Drum. [Online] Available at: http://www.thedrum.com/news/2017/01/18/deliveroo-build-one-the-uk-s-largest-tech-hubs-it-creates-hundreds-jobs-new-london [Accessed 22/07/17].
Kleinman, M. (2017) Giant Apple-backed SoftBank fund in talks to buy Deliveroo stake. Sky News. [Online] Available at: http://news.sky.com/story/giant-apple-backed-softbank-fund-in-talks-to-buy-deliveroo-stake-10933348 [Accessed 22/07/17].
Mintel. (2016) Attitudes towards Home-Delivery and Takeaway Food - UK - April 2016. Mintel. [Online] Available at: http://academic.mintel.com/display/747922/ [Accessed 22/07/17].
Murgia, M. (2017) Deliveroo expands with standalone takeaway kitchens. Financial Times. [Online] Available at: https://www.ft.com/content/1e516472-1a11-11e7-a266-12672483791a [Accessed 22/07/17].
Ram, A., and Shubber, K. (2017) Deliveroo struggles to stay one hop ahead of the rest. Financial Times. [Online] Available at: https://www.ft.com/content/c61ef236-6319-11e7-91a7-502f7ee26895 [Accessed 21/07/17].
Sullivan, C. (2017) Just Eat urges changes to immigration rules to aid restaurants, Financial Times. [Online] Available at: https://www.ft.com/content/439526b2-6320-11e7-8814-0ac7eb84e5f1 [Accessed 21/07/17].
Pooley, C.R. (2017) Deliveroo faces fresh legal action over 'worker' rights. Financial Times. [Online] Available at: https://www.ft.com/content/7d316c90-12f9-11e7-b0c1-37e417ee6c76 [Accessed 21/07/17].
Vina, G. (2016) Importers face £1.2bn rise in costs after Brexit, says study. Financial Times. [Online] Available at: https://www.ft.com/content/b8f575f0-a9ae-11e6-809d-c9f98a0cf216 [Accessed 21/07/17].
Vizard, S. (2016) Heineken goes direct to customers with Deliveroo tie-up, Marketing Week. [Online] Available at: https://www.marketingweek.com/2016/11/18/heineken-goes-direct-customers-launch-brew-house-brand/ [Accessed 22/07/17].
Warrell, H., and O'Connor, S. (2017) UK food industry fears Brexit exodus of EU workers. Financial Times. [Online] Available at: https://www.ft.com/content/e22c9d5c-e95c-11e6-893c-082c54a7f539 [Accessed 21/07/17].