The food delivery market is being affected by the global economic downturn. With rising inflation and the disappearance of Covid restrictions in the last two years, more people now order food online and buy groceries directly from the local stores.
One of the affected food delivery firms is London-based Deliveroo, which sees its first-half losses grow to millions of dollars. In the first six months of this year, Deliveroo reported a pretax loss of 147.3 million $178 million, up 54% from the same period a year ago. The company's revenues went up 12% to 1 billion.
The company announced plans to leave the Netherlands because of the disappointing result, which would mark the latest exit from a major European market for the company. The Netherlands represented only 1% of its GTV in the first half of 2022, according to Deliveroo.
Deliveroo CEO Will Shu said that we have made good progress delivering on our profitability plan so far in 2022 despite increased consumer headwinds and a slow growth during the period. We are confident that we will see further gains from actions already taken, as well as benefits from new initiatives in H2 2022 and beyond. Shu said that we are confident in our ability to adapt financially to any changes in the macroeconomic environment. The report came four months after a French court found Deliveroo guilty of abusing the freelance status of its riders. Two former Deliveroo bosses were given suspended one year prison sentences and fined $32,380 as part of the ruling. The London, England-based Deliveroo operates in around 20 countries including Australia, Belgium, France, Germany, Hong Kong, Italy, Ireland, Netherlands, Singapore, Spain, Taiwan, United Arab Emirates, Kuwait, and the United Kingdom. The startup makes money by charging restaurants a commission fee and charging customers a fee per order. It currently operates in two hundred cities.