Truly, you hate to see it
Lockdown affects everyone in different ways, and it seems to be turning Just Eat and Deliveroo into petty school children. The two multimillion dollar companies are sparring over the injection of Jeff Bezos’ money, after the Competition and Markets Authority (CMA) provisionally approved Amazon’s £461 million investment in Deliveroo last month. It made the approval, subject to a final decision on 11 June, because Deliveroo claimed that the novel coronavirus pandemic had left it so stricken that without Amazon’s millions, it would “exit the market.” That’s code for collapsing.
Now, a leading investor in Just Eat, Cat Rock Capital, has labelled Deliveroo and Amazon’s shared story of arresting decline “patently false ... Now it is clear that covid-19 is actually increasing revenue for online food delivery companies all over the world.” Deliveroo has responded by labelling the contention as a “panicked attempt to desperately lobby the CMA.”
This is a nauseating escalation of tensions between two companies whose actual workers are some of the most vulnerable to COVID-19. On Tuesday 19 May, the delivery old-timer, Just Eat, suggested that Deliveroo was overstating the impact of COVID-19 on its business decline, and invited the CMA to investigate “the quality of its business model.” There’s some justification here: Deliveroo proudly trumpeted the news that 3,000 restaurants joined its platform in the early stages of the pandemic, which would account for a sizeable 10 percent of its restaurant portfolio. Its business model is what has become standard issue in venture capital-seeking businesses, attracting investors on the promise of disrupting an entire industry and focusing on growth despite, like Uber, existing through hundreds of millions of losses with or without a pandemic.
Just Eat’s contention might be bolstered by Amazon’s imminent entering of the delivery market in India, which is predicated on global rising demand for restaurant delivery.
Who knows which insult these two gargantuan companies will come up with next.
And in other news...
- The clouds have arrived, but there’s still the chance to get incredible ice cream over the Bank Holiday weekend.
- Brixton Market landlord’s attempt to evict beloved food shop Nour Cash and Carry has been heavily criticised by the local community.
- The sale of Italian chain Carluccio’s is complete, with Boparan Restaurants paying £3 million to acquire 30 restaurants, leaving around 40, and their 1,000+ staff, to close. [Hospitality and Catering News]
- Good tweet:
I honestly can't wait for noma to be crowned best burger in the world while small independent burger places that have better burgers are ignored because then we will truly know that things are back to "normal".— Eric Rivera (@ericriveracooks) May 21, 2020