Deliveroo launches food orders for pickup

Don’t Deliveroo. The U.K.-based on-demand food delivery service has expanded into not actually delivering orders by offering users a pickup option, called “Pickup,” as an alternative to paying a delivery fee and waiting for lunch to arrive.

The new “click & collection” service is live for 700+ eateries in 13 U.K. cities at launch: Aberdeen, Birmingham, Cardiff, Glasgow, Leeds, Liverpool, London, Manchester, Milton Keynes, Newcastle, Norwich, Nottingham and Edinburgh (Old Town). Restaurant brands signed up in the first wave include Byron, Pizza Express, Pizza Hut, TGI Friday’s, Frankie & Benny’s, Chiquito, Coast to Coast and Giraffe.

Deliveroo says it expects the pickup service to grow rapidly, reckoning more than 10,000 restaurants will be offering it within the next 12 months — and doing so across the 200 U.K. towns and cities in which it currently operates. Albeit that’s just a prediction at this stage.

It’s not clear whether it also plans to add the “Pickup” option in its international markets. (We’ve asked and will update if we get more.Update: Deliveroo says it will be launching the collection option in Hong Kong, Australia, Netherlands, Belgium and Spain this year.)

Deliveroo says the pickup option is intended to widen customer choice with a cheaper option for users willing to collect a meal, potentially helping it to take a bite out of lunch money that could otherwise be spent at a supermarket.

At the same time it’s a way for the company to expand the order pipeline for restaurants that are signed up to its service — and in this scenario it’s acting merely as an ordering layer (but still taking a commission).

Customers picking up their own meals provides an additional revenue stream for Deliveroo’s platform that’s free from any legal or ethical risk attached to the employment status (and/or working conditions) of delivery couriers operating on its platform.

The pickup option launch is the latest addition to a suite of B2B offerings Deliveroo serves up for signed-up eateries.

These include a food procurement service; savings (badged as “perks”) on everyday business costs such as energy; a data service to support restaurant expansion; and “virtual brands” — using demand data to feed new or complementary cuisines being offered from a restaurant’s existing kitchen.

Deliveroo says it expects growth for its business to step up sharply — anticipating signing up another 10,000 restaurants in the U.K. over the next six months, which would take the total it’s working with to 30,000.

Right now it operates in 500+ towns and cities across 13 markets in all, including Australia, Belgium, France, Hong Kong, Italy, Ireland, Netherlands, Singapore, Spain, Taiwan, United Arab Emirates, Kuwait as well as its home market of the U.K.

Despite Deliveroo’s bullish talk of scaling in the U.K., the food delivery space remains highly competitive in many global markets. And this summer the company announced it was exiting the German market, saying it would refocus resources and investment to accelerate growth and expansion in other markets across Europe and APAC.

In Europe, consolidation has been the name of the recent game — with dominant platforms under pressure to increase choice and service offering to try to maintain an edge in key markets. So fast scaling in one market may be at the expense of any business at all in another.

Expansion into adjacent delivery markets is another strategy we’re seeing from regional on-demand delivery startups. For example, Spain’s Glovo, which focuses on Southern and Eastern Europe, is working on a “dark supermarkets” model to fuel high-speed local grocery deliveries, while also dabbling in regional expansion on the food delivery front, with a major push (via acquisition) into Poland.