On Thursday, Deliveroo, the global food delivery application, announced that its net losses for the initial half of this year were nearly reduced by half. This improvement was attributed to cost reduction measures and increased revenues.
After-tax losses witnessed a 46 percent decline, amounting to £83 million ($106 million), as stated by the London-based company. This reduction was observed in comparison to the corresponding period of the previous year.
Amid a cost-of-living crisis and controversies surrounding the treatment of riders, revenue experienced a five percent growth, reaching £1 billion. This increase was attributed to elevated food prices, which helped to counterbalance the decline in orders.
“We have delivered a strong financial performance despite challenging macroeconomic conditions,” said Chief Executive Will Shu, who founded the company a decade ago.
Deliveroo announced its intention to distribute £250 million back to investors, resulting in a share price surge of over three percent during the early trading hours in London.
Earlier this year, it reduced its non-rider workforce by approximately one-tenth, which amounted to around 350 job cuts.
The company, which saw a surge in demand from customers affected by lockdowns during the Covid pandemic, employs tens of thousands of self-employed riders. This employment status remains a subject of ongoing controversy.
During the month of June, the European Union supported proposals that have the potential to compel Deliveroo and similar gig-economy enterprises such as Uber, to classify their workers as employees, thereby enhancing their labor rights.
“We continue to see strong rider application pipelines and rider retention rates,” Deliveroo said in Thursday’s earnings statement.
“However, we have actively managed our rider fleet size by onboarding fewer new riders in the period to reflect the impact of macroeconomic conditions on order volumes.”