Deliveroo to boost Australian labour market by 31,000 jobs
The dining sector has been irrevocably changed by the disruptive force of bicycle-based delivery apps such as Deliveroo. A new report has examined how Deliveroo impacts on the Australian economy, finding it could support more than 31,000 restaurant industry jobs by 2020.
Bicycle-based food delivery disruptor Deliveroo rose rapidly to prominence since its founding in 2013. It soon became one of Europe’s fastest growing firms, and by 2017, it had claimed ‘unicorn’ status, as a start-up valued at over $1 billion.
The billion dollar urban delivery industry initially saw a variety of firms pop up alongside Deliveroo. Along with Delivery Hero and Takeaway, the trio raised nearly $5 billion in funding in the space of three years. Those others have tailed off since, most notably when Deliveroo secured a $575 million fundraising injection from Amazon earlier in 2019, hitting shares in European rivals Just Eat, Takeaway.com and Delivery Hero.
As Deliveroo continues to go from strength to strength, and prepares for a new era of growth backed by these funds, a report conducted by economic consultants Capital Economics has measured the impact of the economic activity generated by Deliveroo’s operations. Looking at figures based on a combination of internal Deliveroo data, publicly available official statistics and a YouGov survey of partner restaurants conducted at the turn of the year, the research found Deliveroo supported AU$452 million in revenue growth and AU$209 million in gross domestic product (GDP) in Australia.
With this spike in economic activity, nearly 8,000 additional jobs became necessary to meet demand in the restaurant sector. These jobs are in addition to the 6,500 self-employed riders under Deliveroo’s umbrella, as well as an Australian office with 140 full-time staff.
The contribution to Australia’s economy is not quite so black and white as to say it directly creates ‘jobs’ though. In 2016, employment lawyer Josh Bornstein, a Principal at Maurice Blackburn, examined work contracts from Deliveroo and its competitor Foodora, describing them as a "sham", and claiming they were designed to pay workers "below the award rates" and to "deny their basic benefits". The examination was prompted by accusations that Deliveroo were being under-paying delivery riders and “failing to meet minimum employment conditions."
Fuel was added to the fire when these allegations were supported by the Young Workers Centre in Australia. It claimed that the contracting arrangements by those companies left workers without access to minimum pay rates, WorkCover insurance, leave and superannuation, before embarking on a ‘Rights for Riders’ campaign, aiming "to improve safety, pay, conditions and job security for food delivery riders."
Restaurant boost
What is more easily seen is that the service Deliveroo provides – rather than how it provides it – has been a major boon to the restaurant sector. According to Capital Economics, Deliveroo helps restaurants to grow their businesses by enabling them to reach new customers they otherwise would not be able to. With the service capable of connecting local customers with food they would previously never have thought of ordering in, the study claims Deliveroo has created an additional AU$313 million in revenue for its restaurant partners. The more than 10,000 partners across Australia are likely will rise to 17,000 by the end of 2019.
Due to the disruptive nature of Deliveroo and companies like it, the study concluded that based on current trends and growth in Australia, more than 31,000 restaurant industry jobs and $696 million of economic output could be supported in Australia by 2020. Globally meanwhile, Deliveroo supported $5.2 billion in revenue and $2.3 billion in GDP across its markets, leading to 67,000 additional jobs, of which 59,000 are in the restaurant sectors of the markets in which Deliveroo operates.
Commenting on the report, which Deliveroo commissioned, Australia Country Manager Levi Aron said, “This research shows that, in addition to making it easier for Australians to access their favourite foods whenever and wherever they want, Deliveroo is making a significant contribution to the Australian economy, and this contribution is growing rapidly… By providing restaurants who partner with us the opportunity to reach more customers, we are helping them to grow their revenue and hire more staff.”
