Deliveroo has announced that it pulls the blind in Spain. As of November 29, the international home delivery company will cease its activities in our country and will leave the territory, the company reported in a statement.
The British multinational has been threatening the possibility of leaving Spain for some time : on July 30, it declared that it was going to hold a consultation among its employees about the cessation of its operations in our country .
Finally, it seems that the result of this consultation has led the delivery platform to decide to leave: “ We want to thank all the ‘riders’ and restaurants that have worked with Deliveroo in Spain , as well as our wonderful clients. The company is proud to have had some of the best restaurants in Spain as partners and to have collaborated with thousands of ‘riders’ who have worked hard to bring millions of delicious meals to Spaniards since 2015, even having been a table of salvation for many of them during the pandemic ”, explained the company in its statement.
Deliveroo has thanked the “talent” of its employees , whom it wanted to thank for “their commitment to the company and for everything they have done” in these years in the national market.
Why is Deliveroo leaving Spain?
As we say, Deliveroo advanced at the end of July the beginning of a consultation among its employees about the possibility of leaving their activity in our country . They explained that Spain represented less than 2% of the gross transaction value (GTV) of the firm in the first half of this year .
At the moment in Madrid it has a presence in the neighborhoods of Chamberí and Salamanca.
Deliveroo currently operates in twelve markets around the world , with the vast majority of the company’s gross transaction value coming from countries where the platform ranks first or second. This is not the case in our country.
The company has come to the conclusion that, as the popular saying states, ‘a timely withdrawal is better’ , as “maintaining a top-tier market position would require a very high level of investment with a highly uncertain potential return” , which could affect the economic viability of the company.
Thus, to continue with the Spanish proverb, Deliveroo has opted for the path of the ‘better known bad guy’ and it seems that it will focus its efforts, resources and investments in more buoyant markets, seeking to expand in these by other cities or expand its capacity in the which was already there, in order to grow in these areas its network of consumers, restaurant and supermarket partners , and even its fleet of ‘riders’.
The effect of the ‘Rider Law’
These, the ‘riders’, are for many the second reason why Deliveroo leaves Spain . Although the announcement of the consultation was prior, the entry into force last August of the ‘Rider Law’ was imminent , a regulation that obliges home food delivery platforms to hire their ‘riders’ and not have them as freelancers.
Some professionals in the sector have seen this legislation as a fundamental factor in the flight from the platform of our country, although a company spokesman stressed in July that “it is not behind the decision”, although it may have “accelerated the process” .
6 years of activity and more than 3,800 workers laid off
The British delivery company already assured last July that if it finally decided to end its operations after the consultation, it would ensure that the ‘riders’ and the employees had an “adequate compensation package” that complies with all regulations and local legislation. “The decision to propose the cessation of our operations in Spain has not been taken lightly,” said Hadi Moussa, Deliveroo’s International Chief Business Officer at the time.
Already in July, the platform sent its distributors a document informing them of the opening of a collective dismissal procedure that included registering them with Social Security before ceasing their operations in Spain. According to this documentation, signed by the CEO of Deliveroo in Spain, Jesús Muñoz, and to which EFE had access, the company expected that the process would affect some 3,871 employees, including delivery drivers and the rest of the staff .
Glovo’s goal is to have 100 ‘darkstores’ by 2021.
This Thursday the company confirmed its intentions with its employees: “We are pleased to have agreed appropriate compensation packages for both them and the riders.” Deliveroo already had more than 10,000 partners in Spain since it began operations in 2015.
Founded in London in 2013, after two years of activity, the British company landed in our country, initially in Madrid, Barcelona and Valencia, where it entered trying to make a difference with other platforms by ensuring shipments in 30 minutes and an offer of restaurants of “high quality ” – it even had Michelin – starred restaurants among its ranks .
A very crowded sector with Just Eat at the helm
The passage of Deliveroo through our lands has not shone especially , especially because the platform has faced a more consolidated player in Spain: the London-based Just Eat is the favorite of users and the one that has had the greatest penetration since it began its operations in 2001.
According to a recent Statista study carried out from online surveys between April and June 2021 of 1,047 residents in Spain, only 24% of the population that acknowledges regularly ordering food at home operated with Deliveroo. As we say, Just Eat continues to be the top of the list, accounting for 50% of the demand. Telepizza is on his heels with 49% .
The bronze is taken by Glovo . The company, founded in 2014 in Barcelona, is chosen by 40% of users . Domino’s (34%), Uber Eats (26%) and Deliveroo (24%) are the rest of the most popular online home delivery platforms in Spain.
Ranking of home service platforms in Spain.Ranking of home service platforms in Spain.Statista
It is not that Deliveroo has not tried, even in recent months it seemed that it was going to succeed: they managed to double orders in the first semester reaching 148.800 million and increasing revenues up to 82% -922.500 million dollars- . But even this growth has been in vain for the British company to maintain business in Spain.