Deliveroo launches subscription delivery in Australia – but will it save you money?

Photo by Matthew Horwood/Getty ImagesA Deliveroo rider at work.
  • New subscription delivery service launched, which will cost $18.99 a month.
  • The subscription will mean you don’t pay dynamic delivery fees.
  • You’ll need to eat at least three home-delivered meals a month to get your money’s worth.

From Tuesday, Australians looking to indulge a hungry stomach with a Deliveroo delivery can do so without paying a delivery fee per order. This may sound like a good deal, but you’ll need to be eating at least once a week with Deliveroo to reap the best benefits.

For $18.99 a month, customers can subscribe to Deliveroo Plus, a premium subscription that scraps the variable delivery fee customers currently pay with each order.

In November, the company brought in dynamic pricing based on the restaurant’s distance to the customer. Dynamic delivery fees can range from $2.95 to $6.95 and took the place of the company’s flat delivery fee of $5. With Deliveroo Plus, customers will have to order a minimum of three times a month to get their money’s worth and if you are eating from local restaurants, this could blow out to more than 6 meals a month to break even.

Deliveroo claims customers signing up to the subscription could save $25 a month or more in delivery fees. But don’t forget, you are paying nearly $20 a month for the subscription and you’ll need to be scoffing home-delivered food on the regular.

Levi Aron, Country Manager for Deliveroo Australia, said in a statement he was “blown away” by the demand for a subscription service. The premium subscription has already been around for a week thanks to a soft launch, which attracted 20,000 users.

“We see the introduction of our new Deliveroo Plus subscription as a game-changer for the industry in Australia,” he said. “We find [customers are] ordering on our platform even more frequently and for a range of reasons, whether ordering dinner when they work late or groceries delivered on the weekend.”

In a statement, Deliveroo said it predicted it would be working with 17,000 restaurants and food providers across the country by the end of the year.

When quizzed Deliveroo Country Manager Levi Aron told Business Insider that subscribers wouldn’t get a preference over non-subscribers for quicker delivery.

“This is about bringing down the costs of using Deliveroo for customers who are ordering on the platform more than three times a month,” he said.

“However the Deliveroo service will remain exactly as is for those customers who just want to order occasionally and not with the Plus service.”

Australia is not the first country to have a Deliveroo subscription service offered, a subscription service launched in the UK in 2017 at £7.99 a month ($A15).

Deliveroo reportedly takes a 30 to 35 per cent cut from the restaurants on their platform, while drivers pay an “administrative fee” of around 4%.

According to Choice, Deliveroo couriers get $3.50 per pick-up, $1.80 per delivery, plus a variable fee based on a combination of distance and time.

Some drivers may also be on an older-style fee structure and paid on a per-delivery basis, reportedly $9–$10.

Deliveroo told Business Insider that restaurants won’t be slugged any extra costs as part of the subscriber programme but that riders may find they have more work due to the push for loyal customers.

“As we reach greater scale and frequency of ordering by customers, there will be more work for riders, which means more opportunities for riders to maximise their earnings,” Levi Aron said.

The AFR reported recently that Deliveroo Australia made a $4.2 million loss after tax last year, accounts show, despite a $20.7 million support payment from its UK parent.

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