With Foodora gone and Uber Eats busily sweeping up market share, Deliveroo is significantly expanding the size of its local operation as the battle for Australia’s fast-growing meal delivery industry heats up.
Deliveroo will launch 16 new delivery zones in the coming months, providing an additional 1.5 million customers with access to its platform, adding 500 more riders to its platform to keep up.
Hobart, Newcastle and Cairns will get access to Deliveroo for the first time, with each being areas where Uber Eats already operates, while a focus has also been placed on filling out blackspots in Melbourne and Sydney.
The expansion highlights the distinction between increasing demand for convenient take-out and ongoing controversy over the meal delivery business model, including its implications for casual workers.
Meal delivery has gone from a $20 million industry to over $200 million over the last five years, according to IBISWorld, and is forecast to grow by an annualised 15% over the next five years.
IBISWorld analyst Bao Vuong says expanding into non-metro areas is a significant growth opportunity for Deliveroo.
“In order to keep up with Uber Eats it’s probably a smart move for Deliveroo to expand, there’s still a lot of untapped markets out there,” he tells SmartCompany.
For independent restaurants increasingly relying on delivery platforms for new business, the Deliveroo expansion is a potential opportunity, although larger brands are beginning to make their presence known.
McDonald’s is now a near-ubiquitous presence on Uber Eats, while Menulog has moved to sign up both KFC and Hungry Jacks to its platform in the last fortnight.
Vuong says there are still opportunities for independents, but they will have to contend with a more crowded ecosystem.
“Food delivery platforms like the larger companies because they have a larger base of customers,” he says.