In a surprising turn of events, it seems that online meal delivery services are having a hard time dealing with the Wuhan coronavirus pandemic. Analysts at Deutsche Bank commented, “Whilst the COVID-19 outbreak could intuitively be seen as beneficial to online food delivery players, with millions of people under lockdown, we conclude that this is not the case.”
Reuters reports that as millions of people worldwide are in lockdown to prevent the spread of the Chinese virus, many expected that online meal delivery services would thrive, but some of the world’s largest delivery services such as Uber Eats and Just Eat are reportedly facing numerous issues. In many cases, the number of restaurants available is shrinking as they’re forced to shut, and many potential customers are appearing to choose to cook at home.
According to data from SimilarWeb, the number of website views and app downloads for delivery services has dropped across the European market highlighting the scale of the slowdown as the Wuhan coronavirus spreads and governments order their citizens to stay home. In France, Spain, and the United Kingdon, Just Eat and Uber Eats saw drops in daily user downloads between 2 and 23 percent in March.
Delivery service Deliveroo also saw major usage drops in France and Spain but a small increase in the United Kingdom. In comparison, grocery delivery volumes over the same period increased massively as people attempted to stock up as they entered lockdown. Before the coronavirus pandemic, the European food delivery industry was worth around $16.5 billion in revenue and was expected to grow by 10 percent per year over the next decade.
In the United States, demand for takeout recovered in some parts of the country but areas such as New York where many restaurants have been closed are taking longer to recover. “New York is not doing well because residents have fled, restaurants are closing and people are scared,” Grubhub CEO Matt Maloney said in an interview. “In Seattle, people feel like the worst is over, they’re feeling a little bit more confident. Everyone else is a mixed bag in between those two.”
Deutsche Bank commented on the drop in food deliveries in a research note stating: “Whilst the COVID-19 outbreak could intuitively be seen as beneficial to online food delivery players, with millions of people under lockdown, we conclude that this is not the case.” They cut their 2020 core earnings forecast for Just Eat Takeaway by over 40 percent and their revenue estimate by 10 percent.
Investor Jim Chanos predicted that the Chinese virus would hurt gig economy companies in an interview last week.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan or contact via secure email at the address lucasnolan@protonmail.com