Inevitable, vulnerable, unprofitable: an inquiry into food delivery platforms in Europe

App-based food delivery platforms risk hubris in their high-flying promises on business performance. As loss-making platforms, they can still count on (venture) capital investors keeping them alive, but the question is to what extent the latter will remain patient over the losses. Based on a scrutiny of business reports in conjunction with secondary research, this ETUI Working Paper maps and comparatively analyses three international operating platforms – Delivery Hero, as one of the largest platforms; Just Eat Takeaway; and the much smaller Deliveroo. In respect of each one of these, food delivery service has an almost inevitable embeddedness in urban economies today. Platforms’ business model is partly based on network effects, meaning that the value of the food delivery service increases when more restaurants are offering food, more couriers are engaged in the delivery job and more customers are using the service. Those network effects are vulnerable as they can be challenged by courier associations and trade unions. Furthermore, platforms are under-delivering by traditional business benchmarks and they are unprofitable up to now, although performance indicators show progress over time. Funding from shareholder equity or debt financing is nevertheless still vital in today’s changed investment climate.