Niklas Östberg will probably only make it to his family in Zurich on Friday.
Because instead of looking forward to Christmas, the CEO of the delivery company Delivery Hero has to take care of unpleasant decisions at his workplace in Berlin-Mitte this week.
As the company announced on Wednesday morning, Delivery Hero is giving up its delivery business in Germany - just six months after the company returned to its home market in June.
Bastian Benrath
Editor in business.
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"We do not have infinite money," said Östberg in an interview with the FAZ about the reasons for the decision. He is still convinced that the delivery service established here could prevail in the long term - but that would take time and cost money. And: “It is expensive to raise capital,” said Östberg. "We have to be selective when choosing our opportunities." There are numerous markets where the money is better spent, for example in Asia and Eastern Europe.
These are almost unknown tones from the 41-year-old Dax boss, who once mocked the fact that, especially in Germany, people don't like "to burn money without a clear result".
On the other hand, Delivery Hero's share price also lost 26 percent last month.
There is much to suggest that the company, which continues to make a loss, will soon have to pay higher interest rates on the capital market if it wants to provide itself with fresh money via convertible bonds.
It last raised 1.25 billion euros in this way in September.
Mini delivery service in Berlin remains
Only a small delivery service around the headquarters in Berlin is to remain in Germany. The services in Düsseldorf, Frankfurt, Hamburg, Cologne, Munich and Stuttgart - all under the pink “Foodpanda” brand - will be closed. Orders will no longer be accepted from Thursday. In Berlin, as an “Innovation Hub”, technical innovations such as a possible delivery with robots are to be tested - Delivery Hero abandons the claim to set up a profitable delivery service. The main purpose of the mini delivery service is to supply its own workforce in the Group's offices. It was also said to remain open for private orders in the Mitte and Prenzlauer Berg districts.
With the decision, Östberg lives up to its reputation of consistently and quickly rejecting unsuccessful attempts.
The withdrawal from Germany is not the only news in this regard: At the same time, Delivery Hero announced that it would also put its business in Japan up for sale.
The company entered this market a year and a half ago.
But he does not want to see erratic behavior in the withdrawals after such a short time: “This is a very rare situation.
Traditionally, that's not our way of working. "
Lack of couriers
It became clear that business in Germany is not going as hoped.
With regard to the quarterly results in November, Östberg had forecast that the German market would make a positive contribution to the group result in five years' time.
But he also admitted that the leading German delivery service Lieferando was "very strong" - it would take at least ten years to become the market leader in this country.
Delivery Hero was also troubled by more competition outside of Lieferando.
Uber Eats, the delivery division of the American car service, is expanding into more and more cities and, with Doordash, the US market leader recently set foot on German soil in Stuttgart.
Doordash also announced that it would swallow the Finnish delivery service Wolt, which delivers in other German cities.
The fact that there are more and more delivery services has also meant that there is now a shortage of courier drivers in Germany.
Companies try to recruit new couriers with posters.
The shortage makes growth expensive and difficult to scale, said Östberg.
The shortage, however, pleases the drivers who no longer work for Delivery Hero.
According to the CEO, 70 percent of the previous employees in the German delivery service were either transferred to the company or referred to other companies.
That left around 300 employees who would receive a severance package in the event of a layoff.