Deliveroo leaves the German market – TechCrunch

British on-demand food delivery startup Deliveroo is ending service in Germany.

The startup developed in the market more than four years ago. But in an e-mail sent to the users, he writes that – “unfortunately” – he will be leaving Germany on August 16th.

“It was not an easy decision and a decision that we did not take lightly,” he adds, saying he will focus on “the development of our operations in other markets through the world”.

The company had previously recalled the service from the market, shutting down services in a number of small German towns one year ago. At the time, he announced that he would focus on Berlin, Munich, Cologne, Hamburg and Frankfurt.

A spokesperson for Deliveroo has confirmed its full exit from Germany, sending TechCrunch the following statement:

We would like to thank all the runners and restaurants who have worked with Deliveroo in Germany, as well as our wonderful customers. It has been an honor to serve so many delicious food in the many great German restaurants and to work with so many brilliant and hardworking runners. We are grateful to our extremely talented employees for their commitment to bringing fantastic food to people, and they will be supported during this time. Deliveroo will continue to grow and invest in markets around the world, seeking to become the benchmark food company in the world.

The spokesperson added that Deliveroo intended to refocus resources and investments to accelerate growth and expansion into other markets across Europe and APAC – without specifying exactly where it plans to go. focus.

According to information provided by Deliveroo, support for affected passengers and employees will include unknown pay levels and goodwill packages. Update: The company has now provided more details on the compensation, saying runners who have been active in the past 12 weeks will receive the following goodwill payments:

  • A goodwill payment of 10 days’ wages, based on their average weekly earnings over the past 12 weeks

  • Another goodwill payment of 2 weeks’ wages, based on their average weekly earnings over the past 12 weeks

Any unpaid fees will also be paid to the runners.

Employees who are made redundant will receive their statutory notice plus an additional payment – either two weeks’ salary for those who have been with the company for up to one year, or one month’s salary for each year of employment for those who have been in employment. the company for over a year.

Deliveroo also said he was not ruling out a return to Germany, although he expressed a similar sentiment when he reduced his service footprint in the market last year.

When it launched in Germany in April 2015, we wrote that Deliveroo would face “fierce competition,” noting for example that Berlin was already home to a series of local food delivery startups.

Competition in the on-demand food delivery space in Europe has been raging fiercely for years – with very little to distinguish one delivery app from another, other than price. Changing the service is always at the fingertips of an application. But with the consolidation now starting to eat into the market, the temperature is rising.

At end of last year Another Deliveroo rival, Delivery Hero, has sold its entire German business to Netherlands-based, selling the unit for 930 million euros.

And late last month, UK-based Just Eat and announced they were in advanced talks to combine their businesses. Their boards of directors reached an agreement on the terms last week – the deal to be offered to their respective shareholders before the end of the year.

Most likely, this mega-fusion is the center of minds at Deliveroo. Competing for clients with a platform giant valued at over $ 10 billion certainly doesn’t feel like a cakewalk.

Steve O’Hear of TechCrunch contributed to this report.

James R. Rhodes