Earlier today Deliveroo released their latest results. They were pretty good but, cutting through some of the fluff, it is basically a break-even business.

This will come as a surprise to many in the food delivery market who feel like the are being squeezed: restaurants are facing ever higher commissions; drivers have seen repeated pay cuts; and customers are suddenly noticing that delivery and service fees make it an expensive luxury.

So where exactly is the money going? How is it possible for everyone to feel hard done by?

Let’s consider the average Deliveroo order. I have used their global results although it is pretty consistent across the UK&I (60% of the businesses) and the other international markets.

What are Deliveroo’s revenues?

The GTV (gross transaction value) is the total amount paid by the customer. The average order is £25. Of this we estimate that approximately £22.50 is for the basket and £2.50 are for those annoying fees.

The money for the basket is split between the merchant and Deliveroo (commission). This will vary depending on what the merchant has negotiated by the average percentage is in the low 20s.

Here's how it breaks down:

So Deliveroo makes on average £7 per order. Not bad!

What are Deliveroo’s costs?

The biggest cost is paying the driver to deliver. 140,000 people work for Deliveroo as riders around the world. Deliveroo doesn’t break out rider costs or explain how much riders are paid (even to the riders themselves). However, looking at the difference between Revenue and Gross Profit gives a good estimate.

The results show that both globally and in the UK Deliveroo have reduced rider costs per order since 2023 (in their words ‘efficiencies in the delivery network’). This will come as no surprise to riders but is at odds with what Deliveroo and the GMB have been saying publicly about rider pay.

Anyway, after deducting rider costs you get Deliveroo’s Gross Profit per order.

Still sounds pretty healthy.

But now we have to think about marketing and overheads costs.

I’ve left out a few small items (Exceptional, Other operating income/expenses, Finance income/costs) but these are mostly rounding errors.

The result is that Deliveroo makes a healthy £2.60 per order and then spends all of it, mostly on staff and marketing.