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Deliveroo Australia rolls out dynamic pricing based on distance | news.com.au

Food delivery company Deliveroo has ditched its flat $5 delivery fee in favour of dynamic pricing based on the restaurant’s distance to the customer.

As a result of the variable fees introduced last month, which range from as low as $2.95 to a maximum of $6.95, Deliveroo says “more than 50 per cent” of customers are now paying less than they were before.

It comes after the company in May expanded its delivery radius from 2km to up to 6km, increasing the choice of restaurants for users but sparking complaints from riders about the much longer journeys resulting in fewer completed orders.

Country manager Levi Aron said Deliveroo had since implemented a dynamic distance loading in addition to pick-up and delivery, with average fees paid to riders now 10 per cent higher as a result.

“The whole driver behind it is to really increase volume for our restaurants,” Mr Aron said. “We look at our data very carefully, and not only are customers ordering more, but it’s increasing their purchase at the checkout.”

Mr Aron conceded Deliveroo’s fee revenue had “taken a little bit of a hit” but said it was a “win, win, win” for customers, restaurants and riders.

“When we first launched in Australia in 2015 we had very conservative delivery areas,” he said. “Over the last couple of years a lot of work has gone into packaging, food can travel better, but also customers want more choice.”

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Deliveroo Australia rolls out dynamic pricing based on distance.