Gorilla retreat signals settling of accounts for delivery apps

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Gorillas isn’t the only fast-delivery app that’s been affected by these issues. “Rising inflation and deteriorating macroeconomic outlook around the world have pushed all businesses, especially in the tech industry and including Getir, to adapt to the new climate,” says Turancan Salur, Managing Director of Getir in Europe.

Companies like Gorillas and Getir planned to burn huge amounts of cash by aggressively buying market share, says Gevaers. “Then, at a certain point, it’s not your company but your clientele that becomes interesting. Getir has proven that its business model works, Salur says, as many of its stores in the company’s biggest market, Turkey, are profitable.

Gorillas workers in Belgium who lose their jobs are protected by the country’s labor regulations, which give full-time contract workers at least four months’ salary as compensation. Some office workers were hired by a Belgian food delivery company, Efarmz, which bought Gorillas’ “local business intelligence on rapid trade”, according to a company statement. The company declined to share further details of the deal.

In Spain, Gorillas employees watch with nervousness the fate of their Belgian colleagues. As in Belgium before the redundancies, they were told that the Spanish subsidiary had a limited time to find a buyer or an investor. Around 300 workers nationwide have received official notice that their layoffs are imminent.

The app continues to work, but management is encouraging staff to look for new jobs, according to a current employee, who works in the Madrid office and spoke on condition of anonymity. “Warehouses are not getting new products,” they say, adding that the number of orders per warehouse has fallen to about 20 a day. “They’re just waiting for them to be out of stock.” Spanish labor legislation is less generous than that of Belgium. Gorillas workers who will be made redundant there will be entitled to a minimum of 20 days’ pay per year worked. Gorillas declined to comment on its agreements with individual employees.

Gorillas in Denmark are also awaiting their fate, as the branch scrambles to find a buyer or cash injection. Over the past year, it has struggled to meet its sales targets, according to an employee who asked to remain anonymous, with warehouses only receiving 70 to 80 orders a day. Districts there were also plagued by staffing issues, with the internal Slack channel regularly featuring calls for help from managers as not a single bike courier showed up for work, they add. Gorillas declined to comment on what he called “details of his day-to-day operations.”

Rider groups in Belgium fear the release of Gorillas will make gig businesses employing their staff on open-ended contracts look unsustainable. “Many of us are going back to work for platforms like Uber Eats,” explains Camille Peteers, driver of the Brussels group Couriers Collective, adding that Uber Eats does not hire drivers as employees. “At a time when some are announcing that they are leaving the market, Deliveroo firmly believes in fast trade and flash deliveries in Belgium,” said Rodolphe Van Nuffel, spokesperson for Deliveroo Belgium. The company’s deliverers in the country are self-employed.

Gorillas says he thinks his operations will be profitable in about three months and the company will be profitable at the group level in about a year. But for analysts, Gorillas’ departure calls into question something more fundamental: that the current delivery app economy isn’t adding up. As these companies raced to dominate big cities, they took questionable shortcuts, says Marc-André Kamel, head of the global retail practice at Bain & Company. “They ignored the laws of gravity and built companies with no clear path to full-load profitability,” he says. “They promised ultra-convenience, but in most countries customer satisfaction is very low.” The demand for 10 or 15 minute delivery sounds catchy in marketing terms, he adds, but it creates a huge expectation of service that is often not met. In December, Gorillas quietly withdrew its promise of 10-minute deliveries from its website.

“The market recently sent a wake-up call to all these start-ups,” Kamel says, “reminding them that they need to find their way to profitability and be better retailers, delighting customers, if they want to. stay in business.”

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