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Food delivery apps are booming during the pandemic

The food delivery sector is experiencing unprecedented growth while much of the world is in confinement due to the coronavirus pandemic (Covid-19).

The demand for these services has made companies like DiDi Food grow by double digits in Mexico and Uber Eats has been the lifeline of Uber in the first quarter of the year.

With the start of phase 3 of the pandemic, 5 out of 10 consumers decided to make their purchases online to avoid leaving their homes, revealed the second report on the Impact of Covid-19 in Online Sales in Mexico, carried out by the Association Mexican Online Sales (AMVO).

The document details the categories in which online consumers have bought more in this period: home delivery, with 40%; fashion, 30%; supermarket, 28%; household cleaning products, 26%, and electronics, 24%.

During the contingency, 55% of Mexican consumers have purchased products and services online to prevent them from leaving home.

The data agree with those recorded by DiDi Food, which since the start of the confinement order in Mexico reported a 45% increase in total sales and usage.

The food industry was declared an essential activity, so it was not forced to close during the confinement imposed by the federal government.

However, the foodservice could only operate for takeout and delivery, which generated interest from the restaurants in expanding their sales channels, resulting in more restaurants joining delivery app platforms.

“Since the start of the contingency, restaurant records on our platform have grown 75% week by week organically,” says Andrea Vidales, DiDi Food communication manager: “In recent days, restaurants have joined our team like El Bajío, Cancino, Burger King, Italianni’s’ and The Cheesecake Factory, among others”.

The growth of Uber Eats is not far behind, and even Uber’s food delivery branch saved the San Francisco-based company from a disastrous first quarter in 2020, which, according to several analysts, would be one of the worst in the history of the company due to the confinement measures announced in much of the world.

During January, February and March 2020, Uber reported revenue of $3.5 billion dollars, or 14% more than the same period in 2019. According to the quarterly report, the earnings were mainly supported by its Uber Eats division, which by itself grew 54% during the first quarter of the year.

“While our travel business has been hit by the ongoing pandemic [3% fewer trips globally], we have taken quick steps to preserve the strength of our balance sheet, focus additional resources on Uber Eats and prepare for any recovery,” said Dara Khosrowshahi, CEO of Uber.

Rappi, meanwhile, increased its number of prime users, who now represent 50% of its membership, from 35% before the health emergency.

The growth of these companies would not be possible without the weakest link in the chain of home delivery services: delivery people.

The eventuality of confinement and the growth of home food orders has forced delivery companies to increase their fleet of delivery partners, who have found in food delivery a way to survive the excessive loss of jobs.

In April alone, Rappi sought to increase the number of his delivery people by 5,000, to face the remainder of the confinement with 40,000 “rappitenderos”.

“The interest of the delivery partners has grown since the beginning of the quarantine. New registrations have increased up to 250% week by week. They are people who want extra income. Last week, DiDi Food had an increase in the number of registrations of 90%,” said Andrea Vidales.

The operators of these platforms are not hired. The vast majority work under a “partners” scheme and only receive a percentage of the cost of shipping the products, so companies have no employer obligations. This means that, despite being constantly exposed to being infected with Covid-19, they do not have healthcare benefits.

However, in the face of the health emergency, the DiDi platform created a $10 million dollar fund worldwide to support its drivers and delivery people who are diagnosed with the disease or are quarantined.

To access this help, DiDi Food distributors who test positive for coronavirus should contact customer service and send a receipt indicating that they were infected. They will be immediately blocked from the platform and they will be granted a weekly payment, for 28 days, of a minimum of 800 pesos and that may be higher if their weekly earnings were higher than that amount.

In the event that the delivery person cannot access a test, but is preventively quarantined, the company will also grant the worker a minimum amount of 800 pesos a week. However, this support will only be for 15 days.

In this case, the delivery person must present an official medical prescription or proof of health.

Adults over 65 who work at DiDi, as they are considered a vulnerable population, they can also access this bonus. This aims to prevent people with some form of comorbidity from leaving home.

Uber Eats offers similar support to its registered delivery partners on their app.

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