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On Demand Businesses 101

Deliveroo – the logistic genius!

Logistics in the food delivery sector are at their peak right now and London based startup Deliveroo is riding this mammoth of a wave. With its presence in 30 UK cities and 20 others around the world, the question that keeps people wondering remains – how do they do it?

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Deliveroo is now backed with over $200 million, the idea behind the platform is to allow consumers to get gourmet restaurant food delivered to their doorstep even when that restaurant doesn’t necessarily offer deliveries. Deliveroo placed its bets on a niche segment where people want gourmet food delivered to them while it’s still piping hot and helps them relish what they eat just like in a restaurant – the essence of the experience still intact. People who look for an experience in their food is their target market, being a niche has been an added advantage. The focus lies in what connects the food to the hangry customers, since Deliveroo doesn’t deal in food themselves the logistics become paramount.

Your run of the mill delivery services will be handing out parcels of hot junk food, that’s quick to leave the kitchen counter and be on it’s way to the customer. These delivery services will have a delivery window, however the handful of delivery services that do offer gourmet food delivery try and steer clear of the time limit, and when you gourmet food reaches you cold, it’s not as much fun as you imagined it to be. This problem is tackled by Deliveroo hands on, they make a claim of making all deliveries under 32 minutes! 

How you ask?

It all comes down to the guy who runs the show – William Shu. Setting standards of work ethics and instead of telling his employees what to do, he chose to show them. As told to Forbes Magazine in an interview, William Shu was the company’s first delivery boy, with limited know-how of logistics, he took the challenge to get a better understanding by going on delivery runs and learning about the challenges of logistics on the field. With 6 hours of toil a day in the suburbs of London, Shu saw the problems as they came and strategized for circumstances accordingly to prepare his fleet of employees that don’t miss the 32 minute mark.

As of now Deliveroo employs more than 300 people in the London office with a delivery fleet of more than 5000 agents – all this came to be in less than 3 years of operation. Other than London they are growing at a fast pace in Barcelona, Singapore, Hong Kong, Ireland, Spain etc.The magic lies in Shu’s aim to provide a top notch high-quality delivery system to the consumer. Shu is obsessed with the logistical machine and has tuned Deliveroo into a company that aggressively focuses on optimizing the logistics process like none other. It’s hyper-local, ‘zonal’ mode of operations ensure a fine tuned mechanic that is augmented by technology. 

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Deliveroo specializes in tying up with the ‘premium’ restaurants who do not have another method of expanding their clientele, the management’s focus mostly being on the ambiance and the experiential quality that would add to their customer’s visit to make it stand out.

With time being the only thing that is constant and the key to making or breaking a delivery, Deliveroo stations drivers within a 2.2km radius of the hotels they sign up, making collection and dispatch very convenient. Drivers are said to make 3 trips an hour, in the possession of both, bicycles and scooters for variation and added speed, if needed.

With a dedicated team full of data analysts, software engineers, research managers and tech experts fine-tuning the logistics process, Shu has automated most of the process via the use of powerful routing software, in-built with algorithms to optimize routes – but they also have to constantly update it according to the elements they can remove from the journey in order to minimize time.

From the time a dish gets cold, to the kind of packaging that is needed for hitch-free transport, to ambient weather conditions, routes and sub-routes, traffic movement and daily behavior – Shu’s team crunches some serious data to arrive at the scheduling they do to maximize efficiency, making hyper-fine adjustment for a powerful logistics plan.

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Deliveroo has not revealed how many transactions are occurring over its platform but it’s likely that the app is proving popular with those ordering in business lunches and anyone who has had a long and hectic weekend and in need of something slightly more upmarket than a McDonald’s or a Domino’s.

The company’s revenues are twofold – with customers paying a delivery charge and restaurants giving Deliveroo a commission on each sale.

For those who want to know how you use it, this is how:

Step 1: Start by downloading the app and setting up an account. You’ll be asked to enter a bunch of thing like your name, email address and phone number. As always a payment method will also be added before any food can be ordered.

Step 2: The homepage of the Deliveroo mobile app will give an overview of what Deliveroo aims to do.

Step 3: Deliveroo uses your GPS location to determine which restaurants are nearby.

The app will provide a few details about the restaurant you’re ordering from, as well as the menu and prices. Deliveries cost £2.50 and an extra £2 is applied if they come in under £15. You can also order food through the Deliveroo website.

Deliveroo’s meals are delivered by “Route Men” who ride around on push bikes and scooters. In London, cyclists are paid £7 an hour plus £1 per delivery, while scooter riders are paid £8 an hour plus £1 per delivery. Deliveroo’s “Route Men” take 32 minutes on average to make each delivery. There are approximately 1,000 Route Men in London and 2,500 worldwide.

Deliveroo is on a road to even more success, by the looks of it, and with William Shu running the company the way he is it is bound to leave a mark in the on-demand world, that is, if it hasn’t already done that.

 

 

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