Deliveroo cuts customer compensation payments by £20m

Deliveroo said it saved over £20m in compensation costs last year as part of a drive to improve its service.

The delivery giant said that while the "overwhelming majority" of orders went smoothly, a small percentage went wrong and damaged consumer trust.

It said it had worked with restaurants and riders in 2023 to "substantially reduce" the number of missing items in deliveries or late orders.

"The biggest improvement came in what we call ‘OMDNR' (orders marked as delivered, but not received), where the consumer does not receive their food at all," the company said.

"We have reduced this by c.65% in 2023, generating annualised savings of over £20m from reduced compensation costs."

Deliveroo saw its losses narrow to £31.8m in 2023, compared to a £294.1m loss it reported in 2022.

Its total number of orders in the UK and Ireland only rose 1% last year to 159.2m. However, the gross transaction value, meaning the total cost of customer's food baskets plus delivery and consumer fees, rose 7% to an average of £26.30 driven by food price inflation.

Deliveroo also expanded its retail offering, which encourages users to add household items to their basket, and ended the year with 8,000 grocery partners across the UK and Ireland.

However, both Tortilla and KFC ended their partnerships with Deliveroo over the last six months after failing to agree with the platform on commission charges.

Will Shu, founder and chief executive of Deliveroo, said: "2023 was a good year for Deliveroo and I am proud of what we have delivered financially, operationally and for our consumers.

"Our focus on service and value for money continues to build consumer trust, which are fundamental to unlocking future growth in this industry."