This Week in Food Delivery & Quick Commerce (30/12/23)

Hi all,

Happy New Year!

Highlights:

• Hong Kong ends probe in food delivery companies

If you have any questions or feedback, you can always reach me at alex.foodeli@gmail.com or on Twitter at @a_jordanov

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💬 Quote of the Week

“With changing wage laws shaking up the economics of restaurant delivery, key players have begun changing their approach.

For instance, in California, a new minimum wage law requiring that fast-food workers receive at least $20 an hour, where previously the average hourly pay for fast-food workers in the state was $16.60, has quick-service restaurant (QSR) chain Pizza Hut rethinking its delivery strategy. Two operators’ decision to shut down in-house delivery has reportedly resulted in the layoffs of 1,200-plus delivery drivers, with consumers now having to turn to third-party aggregators to get the pizza brought to their homes.

Another fast-food minimum wage increase is about to go into effect in New York City, as well as Long Island and Westchester County, according to the New York State Department of Labor, with the hourly rate standard to increase by $1 to $16 at the start of the new year. As such, similar delivery changes may be seen on the East Coast as well.

Plus, in a greater change, New York City implemented a law earlier this year demanding that food delivery drivers must be paid $17.96 per hour, a figure that will go up to nearly $20 an hour in April 2025. As such, aggregators have been making changes to their tipping structures in the city, with DoorDash and Uber Eats both changing it so that the prompt to add gratuity is not shown until after consumers have already checked out.

Additionally, according to The Guardian, aggregators have also added new fees for consumers.”

Source: PYMNTS

📊 Infographic/Stats of the Week

Source: KrASIA

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🚚 Deliveries

• ‘I can wait’: Uber Eats drivers get paid by the minute now. Here’s how it’s affecting your food delivery

• Foodpanda, Deliveroo to give Hong Kong eateries more flexibility to switch to rivals, option to sell dishes for less independently

• How much have Korea's food delivery fees risen this year?

• Meituan Launched First Drone Delivery Route in Shanghai’s Yangpu District

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🚀 Q-Commerce

• Indonesia’s Dropezy drops quick commerce, pivots to poultry

• Target's delivery service Shipt is pausing operations in Seattle as a host of new laws are set to change the delivery space

• Snappy Shopper’s ‘record breaking year’ sees continued losses and asset values plummet

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🍳 Dark Kitchens / Micro Kitchens / Virtual Brands

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💰 Financing / Exits / Acquisitions

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💻 Other

• Uber, Lyft Driver Pay Proposals in 2024 Shaped by New York Deal

• California Pizza Huts Slash 1,200 Jobs as in-House Delivery Ends

• Report: Shein or Temu Could Benefit From Merger With Wayfair

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📜 Deeper reads

• Walmart spent years growing Spark, its own gig-economy delivery service. But Walmart Spark workers say challenges became clear in 2023

• The golden age of working for Instacart, DoorDash, and other delivery apps is over, workers say

• Zomato and Swiggy’s profitability milestone sparks cautious optimism in foodtech ecosystem in 2023

• The Year Food-Delivery Prices Went Insane

• India’s Quick Commerce Race: Blinkit On Top After 2023; Can Rivals Catch Up?

• Unraveling the q-commerce blitz: Foodpanda’s Raphael Zennou on the emergence of quick commerce in Asia

• Beyond milk and bread: How q-commerce is reshaping consumer habits

• New Wage Regulations Are Transforming the Economics of Restaurant Delivery

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