A $14.4 Billion Delivery Company? Talabat Readies IPO Prospectus
MA gig workers can unionize, IL Dashers win pay settlement, pizza sales diverge
We’re celebrating Veterans Day with a bunch of news related to what the troops have always been fighting for: labor policy at home and money in the Middle East! (Meaning read on for news on the Talabat IPO, unionization efforts in Massachusetts and a pay settlement in Illinois. Plus some pizza updates for good measure.)
Join us Weds evening in Downtown LA for our Mobility Mixer - Dinner, Drinks & After Party.
Modern Delivery will be off Wednesday and Friday, returning next week: catch you at the OMF Summit, CoMotion LA or Micromobility America in the mean time?
Today:
Talabat's Mega IPO Overshadows Delivery Hero
MA TNC Workers Win Right to Unionize
Chart Time | Pizza Wars
DoorDash Reaches Illinois Pay Settlement
IPO | Talabat IPO Valuation Eclipses Delivery Hero Parent Co
Middle Eastern delivery player Talabat just released its IPO prospectus, as parent company Delivery Hero looks to spin out 15% of its holdings for the fast growing subsidiary by December. Emirates NBD, one of the banks supporting the IPO, said Talabat could be worth as much as $14.4 billion, while Bloomberg Intelligence estimates a value of $12 billion, both exceeding Delivery Hero’s current market cap of about €11 billion ($11.72B.) Talabat, which operates in Bahrain, Egypt, Iraq, Jordan, Kuwait, Oman, Qatar, and the United Arab Emirates, grew GMV to $6B+ last year, up more than 50% in two years.
The Big Picture: So how exactly is Talabat going to exceed the valuation of the company that will still own 85% of it? Yes the growth story is nice — 14 to 23% annually for the next few years, plus an ad business that throws off $200M in rev — but that’s true whether it’s independent or not. The spin out is designed to make a cash flowing machine: while Delivery Hero has $3.5 billion in debt, Talabat will be unburdened by any previous obligations. Talabat also plans to pay $100 million plus in dividends in April, followed by multi-hundred million dividends twice per year in perpetuity. Interested investors can place orders until 11/27, with trading expected on December 10th.
EVENTS | Mobility Mixer - Dinner, Drinks & After Party — 11/13 in DTLA
Join your friends from Curbivore and Umojo for a lively evening of good food, great drinks and engaging conversation with the public and private sector leaders moving mobility forward on Weds 11/13 from 7:30 to 9 PM in Downtown LA.
It's a big week for mobility in LA, with the OMF Summit, CoMotion LA and Micromobility America all coming together — tap into the best of each world with our lively Arts District after party!
POLICY | TNC Drivers Win Right to Unionize in Massachusetts
Last week may have been a bleak one for our democracy, but labor rights scored an impressive win in the Bay State. Proposition 3 — “Unionization for Transportation Network Drivers” — got 53.8% of the vote, meaning that Uber and Lyft drivers in MA now have the right (but not obligation) to form a union. Gig workers can now form driver associations to bargain with multi-company associations over wages, benefits. and terms / conditions of work. The Massachusetts Employment Relations Board will also create a new hearing process to deal with charges of unfair work practices at TNCs.
The Big Picture: So far, reaction has been fairly muted, as the initiative itself had a motley cast of supporters and detractors. Uber and Lyft did not oppose Prop 3, but after passage Uber noted “It’s clear that voters have reservations, and it’s now incumbent upon the legislature to address their concerns.” Labor advocates were split as well, with some taking it as an important win, and others seeing it as falling too far short of reclassifying gig workers as full on employees. In its coverage of the bill, the New York Times got quotes from familiar pontificators Veena Dubal and Katie Wells, who both called the bill inadequate, suggesting the Gray Lady may have been looking for a more sweeping measure as well.
CHART TIME | Domino’s Eats Papa John’s, Pizza Hut’s Lunch
No food is as iconically delivery friendly as pizza, but not all pizza chains are equally able to ride the current delivery wave. New data from Restaurant Dive charts changes in same store sales at the top three pizzerias, finding that Domino’s has shaken off its 2023 stupor and is now crushing its fellow midwestern mega brands, thanks to clever loyalty programs and strategic discounting. Papa John’s is looking to retool its first party and third party loyalty promos in its own bid to reclaim the growth mantle.
POLICY | DoorDash, Illinois Reach $11.25M Settlement on Tips
DoorDash and Illinois’ Attorney General Kwame Raoul announced a $11.25 million settlement agreement; if it receives judicial approval, it will resolve allegations that DD violated the Illinois Consumer Fraud and Deceptive Business Practices Act by misrepresenting that tips increased Dasher pay. “DoorDash encouraged customers to tip as much as possible, indicating that all of their tip would go to workers,” said AG Raoul. “Instead, DoorDash used tips to reduce the amount the company paid workers. By putting tips toward driver pay, DoorDash could get away with contributing as little as $1 toward a worker’s pay and allow tips to make up the rest. This settlement ensures tips from customers end up where they were intended to go: into the pockets of delivery drivers.”
The Big Picture: DoorDash ended the problematic policy back in 2019. The company put out a statement today, reinforcing that “Dashers always keep 100% of tips from orders on the DoorDash app.” The settlement would provide relief for 79,000+ Illinois delivery workers that were affected between July 2017 and September 2019 and requires DD to make use of a pay algorithm that does not use tips as a factor when calculating its own contribution to wages.
A Few Good Links
Sweetgreen readies points-based loyalty program. Taco Bell takes on trachickenalists. CPK looks to up franchising. Zomato wants to reduce food waste. Chef Robotics eyes ghost kitchens. Bolt adds mobility offerings in Lisbon. Interesting stats on Wolt’s workforce. Gopuff launches price match campaign against ALDI in UK. Comparing Swiggy and Zomato’s IPOs.
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