Deliveroo has announced it is to start charging a “service fee” to all customers – including those signed up to its unlimited free delivery subscription service.
The change comes into force from next month (February) and arrives as the online food platform prepares an overhaul of its delivery fee model to a dynamic pricing structure, where the cost will be based on how far away customers order their food from.
Staring in February, all orders – for Plus subscribers and non-Plus subscribers – will include a 49p service fee. However, heavy users signed up to the firm’s Plus service, which was launched two years ago with the offer of unlimited free deliveries for £7.99 a month, are expected to see costs increase.
Plus customers were informed on Thursday (January 23) they will be charged 49p for every delivery they order. This is in addition to the £11.49-a-month subscription for the service, which also includes special offers and exclusive deals. The subscription price rose 44% a year ago from £7.99 a month.
Other changes will also see a “minimum spend” introduced to ensure “you don’t pay any delivery fee as long as the order meets the minimum spend for that restaurant – no matter how far the delivery is or how often you order”.
A Deliveroo spokesman told PA: “Deliveroo is introducing better delivery fees for customers. For the vast majority, delivery fees will be lower and in many areas will start from as low as 99p.
“Like other Deliveroo customers, those with Plus will see a small service fee. We will use this to bring customers more exciting restaurants, keep improving our service and provide 24/7 customer support.”
Rival UberEats already uses a dynamic pricing model based on distance, although it doesn’t have a subscription service. Deliveroo is attempting to expand to a scale that’s profitable having failed to turn a profit since launching in the UK in 2013.
The most recent results showed revenues have been rising – up 72% in 2018 to £476m – although losses increased 16% to £232m.
In May 2019, the company revealed it had raised $575m, with Amazon the largest investor from the fund-raising round. However, the deal is under investigation by the Competition and Markets Authority, with officials looking at whether the two companies working together could lead to higher prices for customers.