Why Germany is such tough terrain for food delivery

DELIVERY HERODAX has had a good run in the past couple of years. In August 2020 it ascended to the , the stockmarket index of Germany’s most valuable listed firms. It is present in 50 countries on four continents. Revenue for the third quarter was €1.8bn ($2bn), a jump of 89% compared with the same period in 2020. “We grew 100% before Corona, 100% during Corona and we will grow 100% after Corona,” says Niklas Ostberg, the Berlin-based firm’s Swedish chief executive.By number of orders Delivery Hero is more than twice as big as DoorDash, its large American rival. Even so, DoorDash’s market capitalisation is $58bn, more than that of Delivery Hero ($31bn) and Just Eat Takeaway.com ($13bn), the two big European food-delivery firms, combined. European shares tend in general to underperform American ones. But another reason for investors’ caution is more specific to food delivery. Strict labour laws, a tradition of union organising, pricey unskilled workers and stingy customers, who buy little and tip rarely, make Europe the toughest of all continents for the business.