Gorillas isn’t the only rapid delivery app affected by these issues. “Rising inflation and deteriorating macroeconomic prospects around the world have prompted all companies, particularly in the technology sector and including Getir, to adapt to the new climate,” says Turancan Salur, General Manager of Getir in Europe.
Companies like Gorillas and Getir planned to burn through massive amounts of cash by aggressively buying up market share, Gevaers says. “At a certain moment it’s not your business, it’s your customer base that gets interesting.” Getir has proven its business model works, says Salur, because many of its deals in the company’s first market, Turkey, are profitable.
Gorilla workers in Belgium who lose their jobs are cushioned by the country’s labor regulations, which grant workers on full-time contracts at least four months’ wages in compensation. Some office workers were hired by a Belgian food supplier, Efarmz, which bought Gorilla’s “local business intelligence for quick trading,” according to a company statement. The company declined to share any further details about the deal.
In Spain, Gorillas employees nervously watch the fate of their Belgian colleagues. Just like in Belgium before the layoffs, they were told the Spanish subsidiary has limited time to find a buyer or investor. About 300 workers in the country have been officially notified that their layoffs are imminent.
The app continues to work, but management is encouraging employees to look for new jobs, according to a current employee, who works in the Madrid office and spoke on condition of anonymity. “Warehouses aren’t getting new products,” they say, adding that the number of orders per warehouse has dropped to about 20 a day. “They’re just waiting until they’re sold out.” Spanish labor laws are less generous than Belgian ones. Gorillas workers who have to be laid off there are entitled to at least 20 days of wages per year worked. Gorillas declined to comment on its arrangements with individual employees.
Gorillas in Denmark is also waiting to find out its fate as the industry scrambles to find a buyer or a cash injection. According to a staffer who asked to remain anonymous, last year’s sales targets have been difficult to meet as the warehouses only receive 70 to 80 orders a day. Districts there have also had staffing issues, and the internal Slack channel regularly brought calls for help from managers because not a single bike messenger showed up for work, they add. Gorillas declined to comment on what it described as “the specifics of its day-to-day operations.”
Rider groups in Belgium fear the exit of gorillas will create the impression that gig companies that employ their staff on permanent contracts are not viable. “A lot of us are working for platforms like Uber Eats again,” says Camille Peteers, a driver at Brussels-based group Couriers Collective, adding that Uber Eats doesn’t hire drivers as employees. “At a time when some have announced they are exiting the market, Deliveroo firmly believes in fast trading and lightning deliveries in Belgium,” says Rodolphe Van Nuffel, a spokesman for Deliveroo Belgium. The company’s drivers in the country are self-employed.
Gorillas expects its operations to be profitable in about three months and the company to be profitable at the group level in about a year. But for analysts, the departure of Gorillas questions something more fundamental: that the current economics of delivery apps aren’t working out. In their race for metropolitan dominance, these companies have taken some questionable shortcuts, says Marc-André Kamel, head of global retail practice at consulting firm Bain & Company. “They ignored the laws of gravity and built companies without a clear path to full profitability,” he says. “They promised top convenience, but in most countries customer satisfaction is very low.” The 10-minute or 15-minute delivery sounds counterintuitive in terms of marketing, he adds, but it inspires a great service expectation that the is often disappointed. In December, Gorillas quietly removed its promise to make deliveries within 10 minutes from its website.
“The market has been giving all these startups a wake-up call lately,” says Kamel, “reminding them that they need to find a path to profitability and be better retailers to delight customers if they are to stay in business . ”