Delivery-as-a-service with Sacha Michaud (Glovo) and Charity Safford (UberEats)

Good morning Um so in Europe over the last five years We've seen an explosion of delivery apps If you live in a city chances are you Can get hot food or even a bottle of Perfume or a clean shirt delivered at The top of an app sometimes in as little As 20 minutes now consumers clearly love The convenience of this lazy web on a Bike but the big question is whether On-demand delivery can be profitable Um charity let's start with Uber Uber Lost a hair raising 5.2 billion dollars In Q2 in Q3 I think the loss was 1.2 Billion still massive minus a big chunk Going on stock compensation the company Has also cut around 1 200 jobs since July including some in the eats division How long can the cash burn go on it's a Good question not an easy one to start But I think what we're very excited About at Uber is looking at the Businesses on their own we can see that On a on an adjusted ebitda perspective For the last two years our rides Business has been profitable in Q3 Actually the business the rides business Managed to cover the entire corporate Ebitda so we're seeing that as the Business grows it does our unit Economics improve and as we scale we Start to see healthier and healthier Returns so this is something that you Know we it happens over time as we grow

The unit economics improve but if we Kind of look at the food delivery Specifically Um so uh you've been in that space since 2014 and you are continuing to lose Money per order there was I think there Was a report by an investment firm Called Cowan this summer which said Looking at the unit economics which said That the Uber Eats you're losing more Than three dollars per order what's the Actual figure Hahaha So it varies a lot country by country I Will say that we do have countries that Are profitable already on a economic Basis but I think what's important to Remember is that when you're a startup We're three years old when you're a Startup you invest in growth and that's What we're doing now I think many Companies would be in the same situation So if we wanted to be profitable we Could make that decision to do that but We're still expanding we're still Growing and that's the decision we've Taken right now are there markets where Uber Eats is profitable specific cities Specific markets right now Yeah we're doing well would you tell us Where can you tell us where those are we Don't we don't break that number down on A per country basis but we're doing We're doing very well in some countries

But in Europe you would have some Problem okay Um Sasha what do you think is delivery Uh is this a business model that can Work I know globos reportedly sort of Burning through tens of millions a year How are you going to make on-demand Sustainable Well I think first as well I think I Mean what's happening now is investor Perspective is I don't think it's just Relative to the gig economy or delivery I think Um there's more scrutiny on tech Companies full stop about not just Growing but show me show me the route to Profitability Um tell me when you're going to be Profitable not only that show me that You're working on it now and it makes Sense so I think and obviously gig Economy or or or delivery is part of That and actually in one of the Industries that's grown quicker and been Focused on growth thanks to companies Like uber and and others so absolutely I Think this scrutiny in our case uh we're A bit special Um we were born in this southern Europe In Barcelona and where we had less Access to Capital So as far as funding is concerned we've You know been hundreds of millions less Or even billions less than some of our

Competitors in funding which has made us Be lean from day one because we just Didn't have the cash to spend Um so we've we've always been focused on Unity economics Um and you know I mean I can talk about What we think I wrote to profitability Is but I mean I think we're in a good Place with this change of criteria So you do have cities markets now also Where you are managing to absolutely um Our largest market which is Spain which Is where we started as profitable a bit More profitable uh southern Europe is Operationally profitable yeah um Latin America in the first part of next year Will become operationally profitable so The route from mature Um cities countries to profitability is There we still want to focus on on Expansion we see opportunities to Continue expanding so growth and Sustainability of the companies is super Important Um and as I said earlier from day one We've been focused on Union economics Because we wanted to but also we didn't Really have a choice right but so what Distinguishes these markets where you Are finding the model does work is there A particular type of City a particular Type of customer what is it about these Markets in our case it's really about Maturity southern Europe is where we

Launched where we started it's the Longest we've been there Um Latin America was next and then we've Since then we've launched in Eastern Europe the Balkans and Africa so I think It's a question of Um time of of where we get to Profitability so is that then about People So you know Yeah absolutely absolutely making making The Mark at the end of the day the more Orders we have the better the whole Ecosystem Works no the more the Riders Earn the more the partners Um Revenue the more Revenue comes in for Them so absolutely it's key to have Growth Um and I use the word liquidity which is Movement in the city and the more of That there is the issue is to make the The economics work charity do you want To come into that on the idea of you Know where what what distinguishes these Markets where you are finding the model Is is working I mean I agree with Sasha It's about scale so where we start to See more and more trips happening this Is where we definitely see the unit the Unit economics improving and so our job Is really to figure out all of the use Cases that we can put into people's Hands to get that application used as Much as possible yeah

Um glovo has been growing very very fast You've had a few sort of instances where You went into a market and left quite Quickly I think there was Egypt and Chile it's kind of interesting are you What sort of when what was different About those what was difficult about Those markets so our focus is Um to to enter countries and and Obviously cities that we we can be lead The city be leader in the market or at Least co-leader or second Um in those in those countries we're Finding it very difficult to get Traction very competitive Um a lot of operators also investing a Lot and investing a lot in free promos Free delivery marketing and and really The cost of opportunity we're saying Let's let's take the investment from These countries we think we can spend it Better in other countries we get more Traction and we moved out Egypt actually We've we've gone back since oh okay Um because one of our investors delivery Heroes leader there so there's Um basically they they asked us to go Back to the market which um which is Absolutely fine which we're still in Egypt we did we and Mike we did leave it In with Brazil Um which was a great decision that was Clearly we went there Um we we realized

It was a huge task to win that market uh The incumbent operator is very good they Operate very well Um we have two competitors who are Investing a lot of money there so that's A typical example of taking that and Let's invest it somewhere we can win the Market right I don't think either of Your services are in Germany right What's going on with Germany I don't Think in our case Um we're focusing on markets where I Said earlier we can be leader or Co-leader now Central Europe and Northern Europe Um uh I don't know there's a lot of Competition very competitive Um it would take us a large investment To to make rounds they're the UK is Another example the U.S so these are Markets where we're not intending to go Not focusing on Um so that's the reason why we're not Here I just add that Uber as a platform Is very very much present in Germany so It's a huge priority market for us Overall and from a rides business Uber Green Uber like our scooters got a very Big Myriad of products here already but From an eats perspective we don't have Plans we're going to focus on the Markets where we already are and focus On making those markets as profitable as We can right so no ubereats is not going

To come no no rates in Berlin no Immediate plans okay focusing on the Rest of the platform to be here Um ubereats has we've also been piloting Uh this concept of dark kitchens I think In Europe Um what have you learned so far oh so Many things Um I think the the biggest thing that Comes with having launched over 2 000 Restaurants for our partners with our Partners is that you know we need to use Data to be able to inform really smart Decisions about what's going to work Where and so that's been a huge priority For us making sure that we're Translating our data into actionable Insights that our restaurant Partners Can use we've also decided I mean it's Not a business that we want to be in Facilitating we are we are technology Platform we are Marketplace platform we Connect restaurant Partners to Technology and access to data to be able To put in place the right restaurants to Service eaters but we're not going to Run those kitchens for them so we've got Great partners that are able to do that And we are really the the intermediary Between them do you think it's going to Be a key piece of this puzzle of Profitability I do I do I think that From a restaurant perspective this is The secret for unlocking future growth

For restaurants we already see Restaurants being able to invest in Different modalities that they've never Been able to use before so rather than Spending dozens of thousands of pounds On kitchen space we're seeing Restaurants renting space we're seeing Restaurants being able to set up on the Kitchens and keep margins really really Low because they don't have the overhead Of having a wait staff in the friend They're still able to do massive returns So really really good return on Investment for the restaurants that We're partnering with Glover you're also I think you have you Rent Dark kitchens space from another startup I think and then rent it out to some of Your partners Um what's the what's your exact model Around it at the moment no our model is We'll rent we'll rent the place out um Um off the landlord or and then we'll We'll put the equipment in and we'll Give a turnkey solution to restaurants Or Brands who want to operate on our Platform at the end of the day without Repeating everything's just been said Which I totally agree Um to me it's all about ux offering the Customer a better experience less Waiting Um less errors putting Tech in the

Kitchen makes a big difference remember I mean most of the restaurants that Operate on our platforms built their Businesses for serving customers at Tables and not for delivery so you know They have of small kitchens so often They can't put up the demand many times They're not in the area of where the Customer is so they're far away so we Can do that with it not kitchens so it's All about improving the ux Um for the customer giving it a better Service and it has huge potential Um and you know we've got six Opera Operating already and we plan to expand And also we we offer dark storage which Is dark groceries as well which is this Is the super foreign Yeah yeah Um and that that is super interesting Because Um we we've we've done groceries from Day one we've been multi-platform or Multi-category sorry for since since we Launched so groceries has always been a Huge part of of global uh in fact the Second category so and what we've Detected is our customers are really Using Global for convenience Last minute small basket sizes I need This right now because I don't have it a Little and and to be actually in retail The fastest growing segment of Supermarket is actually convenience so

That's super interesting so that's the Space where super Global fits in with One thousand one thousand five hundred Products Max and super efficient Delivery the Glover arrives which we Call our delivery guys lovers um they Arrive in actually zero waiting time the Bags waiting for me is there 20 minutes Is delivered Um so it's all about offering a better Ux and getting technology into the into The supermarket that doesn't mean we Don't work with large chains and Local Heroes in Supermarket we've signed a Global agreement with Carrefour Um so they complement each other very Well I read that you are also kind of Thinking of doing your own Brand Products uh grocery products I guess um Maybe like an own brand of water or Something is that something you're Looking at as well in terms of expanding Into actual actual items so sort of I Guess an Amazon Basics style yeah I Think we'd only do that if we did it With a partner it's a little bit like Um our Global supermarkets we still work With Partners to give us the product Right Um I think we delve into Brands if we Could do something with with some of our Partners I don't see us building our Water brand or our groceries brand on The media not in the immediate future no

It would depend where I suppose the data Is what's key here isn't it so that's Informing where you're putting these Supermarkets and the products you're Stocking and potentially what might then It's it's about location and also Identifying the customer what he expects So expectation for customers is it is it More important to be able to really live In 20 minutes yeah or is 35 okay that's Important for we look so is that also Explains density now how many how many Dark supermarkets you need per City to Make that really happen yeah uh with Firm believer actually there's a huge Upside in super immediate delivery There's a lot of uh companies in Emerging Markets who are you know Delivering in 15 minutes Um and showing huge growth so that's Something we want to investigate Reloading the delivery times in Delivering 15 minutes guaranteed or 20 Minutes guaranteed is super interesting All right so we're also seeing some Major consolidation in this food Delivery space in Europe kind of Thinking of the the just eat merger that's still in Train it looks like it will probably Happen Obviously there's there's more Consolidation that could happen and There have been some rumors of talks

Between Uber and globo have you have you Had any discussions about an acquisition Who wants to take that I can I can Answer that and very truthfully I mean I Think we've spoken Um conversations not not about Investment or not about Acquisitions to Pretty much every big player in the Market in fact we have one of the Biggest players in the market is is one Of our main investors so I think you Know you have to be closer to everyone It does make sense this consolidation I Think there's huge advantages for being First and second in the market so when There's four companies the third and Fourth are going to find it quite Difficult to get traction yeah so I Think there will be consolidation Um you know our our vision is we we're Aiming for profitability Um we want to be profitable and depend On ourselves which is a really nice Position to be in not depend on Acquisitions or or investors and that's Our Focus over the next 12 to 18 months Does it matter if it's an exit or an IPO What would be your preferred end point My preferred end point is to be Profitable and as soon as possible and That's what focused on and then you then It makes you're in a position to make Those choices very easily when you're Not and you're dependent on investors

And then maybe the decisions are not you Have to make certain decisions and it's Not in your choice so that's why I mean That's we're very focused on that and That's our goal okay Another big issue around gig platforms Is they are there's a lot of scrutiny Around issues of Labor rights and Fairness Recently one of the most senior Legislators in the European commission Voiced support for collective bargaining Rights for for Gig economy workers Charity what impact would that have on Your business I mean I think at the end Of the day what we hear from our Partners is that they want flexibility So whatever you know we're happy to work With regulators and make sure that Whatever solutions they would like to Put in place are put in place but we Want to make sure that we hold close the Element of flexibility because that's What we hear time and time again that Our partners really really want you know Of course if we ended up having to Change the way that we work in our Business model we would be happy to do That if that's what the regular the Regulation would require but I mean I Suppose if if platform workers had Collective bargaining they could ask They could tell you that they wanted Flexibility and you know better wages

Better better rate of pay for per Delivery right yeah it's possible it's Possible so I I think that's one of the One of the elements that will always Have to be ready for but I mean at this Moment we're hoping that we can maintain What the status quo we're doing quite a Lot in terms of career safety career Well-being making sure that they have Lots of access to insurance and health Care and even paternity leave across Europe now which is super exciting but What about if you had to reclassify the The writers as workers how much cost Would that add to your business yeah it Would be a big change for sure and that Would be something that we would do only If it was uh deemed necessary because Again we're hearing right now that That's not the way that the couriers Would like to be classified Um Sasha would you support uh collective Bargaining rights for Glovers absolutely Um I think and in fact we have supported It vocally Um I'll give you an example a recent Example in Italy who've passed a law Degree I think just two months ago Actually obligating the platforms to sit Down with either Rider associations or Representative of riders or trade unions And negotiate Um terms so we're absolutely I mean look Global is a European country uh you know

We were born in this company we're born In southern Europe Um I think EU I think are being European Our grandparents fought a lot for for Workers rights and we definitely don't Want to give them up we we believe that We should we should look for ways to Maintain the flexibility Autonomous workers but equal those Social rights to maybe full labor Um and that's where we think things are Going France is probably the most Advanced with that mentality they've Created Um a profile of a worker in between in Full labor and an autonomous worker with More social rights maintaining Flexibility it's a big thing for macaron And I think they're the most Visionary Advance in how to adapt to new times but Maintaining social rights so we're an Advocate in many regulations as well the Issue is it's not the same in the UK What you can do is in Spain so I mean Most most regulations you can't just go Out and do a collective bargaining Agreement for autonomous workers so There needs to be regulatory changes There needs to be dialogue but we're Advocates for more social rights and Adapting to to protection There's a tension isn't there between This idea of gig workers have loads of Flexibility but at the same time both of

Your platforms very tightly manage the Work using algorithms using tracking Using scoring There's a how do you kind of reconcile That that message one on the one hand Flexibility on the other well we're Going to track you and we know exactly How much time you took to do this and I think I think the tracking and the Tech is actually in benefit for their Ecosystem so the more the better our Algorithms work The more orders per hour the Riders will Have and therefore the more earnings per Hour they will have so again they're Paid by job so hence the word gig right Um so therefore the better our Technology and the better we locate them And the better we optimize the orders The more orders they'll do per hour in The more earnings so I think it's in Benefit I don't think there's a big Difference between flexible autonomous Workers and us doing that and some other Labor form at the end of the day I think What's more important is these workers Are asking for flexibility They want to connect to the platform When they want Um and they want to work x amount of Hours if it's five per week whether it's 30 that's their choice and maybe the Next week not do it I think that's the Important piece

Um more than than how we optimize the Technology to improve the The ecosystem of the platform in the end And just building on that we have Solutions for any of those segments so If you want to do this as a very very Part-time job then we have incentives For you if you want to do this as a Full-time job we have incentives for you As well so I think it's it's great have Either of you spent much time you know Trying this side of the business getting A new bike doing doing deliveries Absolutely how long how long when we When we started Global which is um Beginning of 2015 we start off with Three writers and obviously on peak Times Um it was enough so Oscar myself some of The staff would just pick up our bikes On Friday nights and Saturday nights and Do orders so that was part now we have a Thing called Global cares where where The whole company Um can go out every month and do Glovers And and we give the money to charity the Money that was earned and we double it And I go out literally once a month for Sure and and twice a month and I've done Globals in Abidjan Cairo and mainly Barcelona is where I live Um so yeah absolutely um and it's and It's super interesting because you start You speak to Glovers in the queue you

Understand their pain points you Understand the pain points of Partners When they don't have Then you have it prepared and you're Waiting there for 10 minutes so it gives Everyone and and I'm glad you know Pretty much 50 of our staff worldwide Which is about 1500 people today Um go out and do gloves every month Have you ever gone on your bike Terrace Of course of course yeah in some pretty Exciting places as well so yeah we we Make it a regular part of the way that We do business and you get great Insights when you talk to eaters when You talk to other career Partners when You see what wait times you're looking At in restaurants and how you can Optimize that experience because we're Constantly trying to figure out how to Take less wasted time out of the process So food is ready exactly at the moment That The Courier is arriving to pick it Up the transit time is perfect the Dispatch time is not too long so this is Like experiencing it is really the only Way that you really understand if it's Working or not indeed um we're almost Out of time but just a quick question uh Uber Eats his trialing delivery drones In the US any plans to bring that to Europe one day one day yeah we're very Excited about this technology it's uh It's it's really it's really the future

I mean imagine how we could expand the Radius around different restaurants if We're able to do drone delivery we've Done some analysis in the U.S of some of The big Enterprise chains and we can Almost cover all of California by being Able to be able to manage this way it's Great Sasha any uh moonshot projects r d Projects at glovo perhaps some Teleportation technology you're working On no interesting drones and you know Robots and everything what what comes First the technology or regulation no Yeah that's going to be a big one Um we're focused on Um you know consolidating the business Finding paths to grow finding new areas New cities Um that's the short-term goal for us Wonderful um I think that's it we're out Of time pleasure to speak guys thank you Thanks a lot thank you [Applause]


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