Deliveroo HK Drivers Protest Low Pay



ORIGINAL POST
Posted by Ed 40 days ago
More than 100 Deliveroo couriers in Hong Kong took their protest against a new payment structure they said would cut their earnings into a third day on Tuesday.
 
 

On Sunday, riders in the firm’s fleet of more than 6,000 started a protest in different districts, which saw each of them taking just one order an hour.

 

Some claimed on social media that the protest had caused backlogs of orders at some restaurants and lengthened waiting times for customers.

 
 

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COMMENTS
Ed 40 days ago
Food Delivery Looks Like Another Gig-Economy Dead End
 
There’s no money in bringing meals to consumers. That might mean trouble for the restaurant industry.
 
Shortseller Jim Chanos (Trades, Portfolio) made a name for himself by being one of the first people to publicly bet against Enron in the early 2000s. Since then, he has taken other high-profile short side positions, most notably against Tesla (NASDAQ:TSLA).
 
Chanos doesn’t believe that the "gig economy" business model can ever be profitable. This is why he is also bearish on Uber (UBER). When it comes to Grubhub, he says it already employs an "almost predatory" business model by charging independent restaurants a large percentage of the price of an order for delivery.
 
According to Grubhub, they don’t make money delivering for large chains like McDonald’s and Burger King, so they overcharge smaller restaurants.
 

He furthermore believes that if Grubhub is not profitable in the first half of this year, with so many people relying on home deliveries, then they will probably never make any money. He doesn’t think that it will turn a profit even if delivery becomes more widespread, people don’t want to go out as much and restaurant capacity shrinks:

 
“Here’s the conundrum with that question. If you don’t make any money delivering for the big chains, which is where a lot of the volume is, and you don’t make any money delivering for the independent restaurants and independent restaurants survive [the lockdowns], why would they ultimately not do this themselves, and just pay an agency fee? Why do they need to give up 20% of the take to a third party. This has been profitless prosperity for restaurants in good times.
 
And it doesn’t scale! Delivery guys can only do two deliveries an hour. It’s not like other Silicon Valley network effect companies, it’s literally a body shop - you have to have more drivers to do deliveries. And that’s the inherent problem with why this is never going to be profitable.”
 
 
 

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