Uber Eats vs. Lieferando - the end of the monopoly is approaching

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If the guest does not come to the restaurant, then the restaurant delivers home - there is a billion-dollar business behind this simple approach.

So far, only one company in Germany sells the cream: the Dutch group Just Eat Takeaway, better known here under the brand name Lieferando.

With the gastro lockdown as a turbo, Takeaway increased the number of orders in the first quarter of 2021 by 79 percent to 200 million.

In Germany the increase was 77 percent.

And that despite the fact that many restaurateurs groan about the high fees.

Lieferando takes 13 percent for the pure mediation of food orders via its website.

Around 30 percent will be charged if the delivery is also organized.

But now there is movement in the lucrative market.

The taxi competitor Uber is entering Germany with its delivery service Uber Eats.

It will start in a few weeks, initially in Berlin, announced Pierre-Dimitri Gore-Coty, the responsible manager of the US group, in the "Financial Times".

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Shortly before that, the Finnish startup Wolt had the same idea.

To build business in two dozen countries so far, the company's founder, Miki Kuusi, raised a good 700 million euros from investors, more than half of which was only at the beginning of this year.

Much of it will serve to compete with Lieferando and Uber Eats in Germany.

The Finns have been delivering meals in Berlin since September, and in Frankfurt and Munich since January, and Hanover is already on the Finns' to-do list.

The bicycle messengers with the huge blue rucksacks are easily imprinted on the cityscape.

Wolt mainly delivers with its own drivers, while Lieferando sees itself essentially as an intermediary who only offers delivery as an additional service.

Most of the menus are delivered by the restaurants themselves.

There are also a number of smaller, mostly local providers.

Uber Eats is fueling expectations

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The market entry of potent competitors gives restaurateurs and customers hope for a price war between delivery services.

There are also small newcomers such as the regionally active non-productive time specialist DiscoEat.

Falling fees would take a lot of pressure off the hosts and cooks on the cost side - a prospect that an industry shaken by the seemingly endless lockdown could do with well.

Source: WORLD infographic

"Without question, Lieferando has enormous market power and dominance," said a spokesman for the Dehoga industry association.

New providers such as Wolt and DiscoEat have already created more competition.

"With the planned entry of Uber Eat, there will be even more movement on the market," he said.

That is to be welcomed in principle.

Uber Eats is already heating up expectations.

Gore-Coty announced that there was great interest in an alternative to the market leader Lieferando in Germany, given its “extraordinarily high” fees.

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Lieferando's parent company Takeaway promptly downplayed the rivals' advance.

“Our biggest competitor in Germany is the telephone, not Uber Eats,” said company boss Jitse Groen, alluding to the fact that many customers called the local pub instead of using apps.

The exchange of blows is the prelude to a tough struggle for big business.

Germany is the fifth largest market for food deliveries from restaurants worldwide.

The industry turnover is likely to rise above two billion euros for the first time in the current year, forecast the statistics portal Statista.

Source: WORLD infographic

Nevertheless, there is still a lot to distribute, because around 35 million residents state in surveys that they have not yet used any delivery services, and another million answer the question with "rarely".

It is much cheaper for market entrants to acquire new customers than to steal the existing customer base from competitors.

Because experience shows that once you've loaded a food app, you'll be happy to stay with it.

Of the almost 17 million Germans who use the food service at least once a month according to the VuMA consumption and media analysis, most order a dinner (top: pizza) because they do not feel like cooking or have no time to cook.

Everyone wants to earn money, but nobody wants to cook

For the providers, it's about their economic future.

How successful you are in growing into new markets or defending your own market position is crucial.

Wolt, for example, claims to have tripled its total sales to 285 million euros last year with a deficit of 38 million euros, although losses in the start-up phase are not uncommon.

Expansion is everything to begin with.

For the American Uber group, food deliveries have developed from a fringe business into an important division during the corona pandemic.

Meanwhile, there were slumps in the core business with passenger transport services.

Source: WORLD infographic

Germany should strengthen the food sector once again - and quickly.

According to the company, numerous large and small restaurants have already been won in Berlin.

Uber is working in this country with local delivery companies with permanent couriers.

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For Lieferando and its parent company, the increased competition means renewed effort.

In analyst presentations, the Takeaway Board of Directors calculates how close the company is to nice profits even with "slight fee increases".

Even 50 cents more would be enough for gross profits, according to an event in March.

The operating result (Ebitda) in Germany jumped to 125 million euros in 2020, more than six times the previous year's value.

"Excellent order growth ensures sustainable improvements in Ebitda and margin," is the title of the corresponding slide.

It remains to be seen whether the curves will continue to point upwards so nicely when the competition intensifies again.

Nobody knows this better than the takeaway managers themselves.

You have only just emerged victorious from years of consolidation in Germany.

Smart: Delivery Hero does not deliver in Germany

At the height of the struggle with the competitor Delivery Hero, Takeaway spent around 100 million euros annually on advertising in Germany towards the end of the last decade, according to figures from the marketing consultancy Ebiquity.

The result was increasing market shares and unforgettable advertising slogans such as “Isch bin Dir Farfalle” or “Dönerteller Versace”, which strained the feeling for language, but served the purpose of engraving the brand name in the memory of potential users.

Source: WORLD infographic

The main takeaway rival was hardly less active.

Delivery Hero, founded as a Berlin startup, also invested high double-digit million amounts in advertising and at the same time bought several smaller competitors from the market.

But in the end the advertising battle was too expensive.

In 2019, Niklas Östberg, boss and founder of the company, sold all of his brands Lieferheld, Pizza.de and Foodora to the permanent Dutch competitor, who incorporated them into his Lieferando business and has since been the market leader for meals on wheels in Germany.

The irony of the story: Delivery Hero is today one of the country's stock market elite as a DAX stock, employs over 27,000 people, achieved sales of around 2.8 billion euros last year and organizes food deliveries in over 40 countries in Europe, near and far East, South America and North Africa.

But not in Germany.

Smart.

Because the second round of bone-hard wrestling is just beginning.

Mayor of Nuremberg demands a deposit on pizza boxes

In the Corona time, delivery services make the business of their lives.

But cities and municipalities are increasingly complaining about a flood of waste.

The mayor of Nuremberg is now proposing a substantial deposit on pizza boxes.

Source: WORLD