European Food Delivery Companies Merge

08/03/2019

The announcement that Takeaway.com of Holland and Just Eat PLC based in London will merge is a predictor of possible consolidation in the U.S.  It is evident that volume of operation including amortization of management software and logistics is necessary to achieve profitability, given progressively lower margins.  Although volume of deliveries and value are increasing, most of the delivery companies have survived only through regular infusion of venture capital.

 

The proposed combination of the two EU companies processed 360 million orders in 2018 worth $8.1 billion.  Analysts consider that by 2022, 10 percent of restaurant sales will be delivered to homes and offices.

 

The Amazon investment in Deliveroo is currently undergoing scrutiny by UK antitrust authorities. Mergers in the U.S. are likely given the reality that competition is shaving margins. A further complication may arise if Federal or state authorities designate delivery persons as employees and not independent low paid contractors without benefits, functioning in the Gig economy.






















































































































































































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