Gorillas in the mist: heavy weather ahead for ‘instant delivery platforms’

Wired writes:

Quick-delivery empires are crumbling across Europe as investors put an emphasis on profits.

It appears that demand for these platforms and services is actually quite low, and does not balance the rapid cash burning for market share strategy of platform startups. The victims, inevitably, are the low paid workers who now have to find another gig. Note also the disparities in legal rights for workers between EU countries …

During the pandemic, Gorillas was flush with cash. The company raised almost $1 billion in October, an amount even the company’s CEO, Ka?an Sümer, described as “extraordinary.” But the quick-commerce sector has become another victim of investors’ new aversion to loss-making startups as they worry about the economy. Gorillas’ retreat is emblematic of pain being felt across the sector in Europe. Gorillas’ rival Getir said it planned to cut its global head count by more than 800 people, while Zapp said it expected to lay off 200 workers, leaving British cities Cambridge and Bristolentirely, and Jiffy has stopped deliveriesaltogether to focus on software.

“All those logistics–supply chain–IT companies that rely on cheap money, you can see they are now panicking,” says Roel Gevaers, professor at the University of Antwerp, who researches last mile delivery.

Part of the problem in Belgium, where Gorillas charged consumers 1.8 euros ($1.90) per delivery, was that demand stayed low.

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