Amazon’s investment in Deliveroo is now in doubt as UK regulator raises ‘serious competition concerns’

UK’s competition regulator says Amazon’s investment in Deliveroo “raises serious competition concerns.” Back in May 2019, Amazon led a $575 million Series G round in Deliveroo, bringing the total round to $1.35 billion raised till date.  However, phase on the completion of “Phase 1” probe by the Britain’s Competition and Markets Authority (CMA), the regulator is now saying the deal “raises serious competition concerns” and “may require an in-depth investigation.”

“If the deal were to proceed in its current form, there’s a real risk that it could leave customers, restaurants and grocers facing higher prices and lower quality services as these markets develop,” Andrea Domes da Silva, executive director of the CMA, said in a statement. “This is because the significant competition which could otherwise exist between Amazon and Deliveroo would be reduced.”

UK regulator is not the only thing Deliveroo has to worry about. Early this year, it was reported that and confirmed that Deliveroo is paying its riders progressively less per delivery whilst pushing the pickup/delivery distances further for the lower fee. It has been noted this practice in particular penalizes scooter riders, who frequently find themselves being required to travel 1-2+ miles to perform a pickup, only to then undertake a delivery 3-4 miles away (totalling 5-6+), with no material visible distance benefit being paid over the base fee.

The London, England-based Deliveroo was founded in 2013 by Will Shu and Greg Orlowski. The startup makes money by charging restaurants a commission fee, as well as by charging customers a fee per order. It currently operates in two hundred cities.