Takeaway.com and Just Eat merge to become a global superpower in on-demand food delivery

In many ways, food delivery involves high-risk, expedited precision delivery schedules that are a frontrunner to a system that the e-commerce segment is eager to copy. Food delivery also works on the “gig economy” – an ecosystem that does not employ people but has ground staff who are temporary contractors working on an on-demand basis. 

Though the gig economy might not be ideal for its workers, food delivery companies can leverage that business model to scale-up faster and be flexible with their operations because it drastically reduces its accountability on the workforce, unlike e-commerce operations. 

However, within the food delivery industry, there is less substance that separates individual companies from each other in terms of customer service or brand perception. This has led management of companies in the space realizing that becoming a market leader depends entirely on the size of its customer base.

This idea is reflected in the number of offers and discounts that delivery companies frequently throw at their customers, looking to please them with attractive rates, while burning through heaps of investor money. Nonetheless, companies are slowly coming to terms with how unsustainable this practice is in the longer run, with desperation leading them to the next stage of delivery wars – market consolidation. 

The merger of Takeaway.com and Just Eat is exciting, as it is yet another step toward market consolidation, with a slew of food delivery companies potentially merging to survive in the market. 

Takeaway.com is not new to acquisitions either. The company bought Delivery Hero’s German operations for roughly €930 million ($1 billion) in December 2018, helping stabilize its operations in Germany, as both the companies had burned through vast reserves of cash to beat the other in the race towards market dominion. 

Interestingly, Takeaway.com already has a history of negotiating with Just Eat, although it sat on the other end of the table previously. Takeaway.com had entered the U.K. market in 2012, but with its business never taking off as expected, the company sold its U.K.operations to Just Eat in 2016. But now with the merger of Takeaway.com and Just Eat, its market competition across Europe will now primarily be with Amazon-backed Deliveroo and Uber spinoff Uber Eats.