Premium isn’t a moat: What Deliveroo’s exit says about Southeast Asia’s delivery ceiling

Deliveroo’s decision to exit Singapore after an 11-year run is being read across the industry as a brutal referendum on food delivery economics.

In this interview, Varun Saraf and Rishabh Singhvi (co-founders of WhyQ, a leading workplace F&B platform in Singapore and a partner of Deliveroo), explain why the model breaks: the average basket is about SGD20, platforms may take 25-30 per cent (roughly SGD7 to SGD9), and last-mile delivery alone can swallow SGD7 to SGD9 before marketing, tech, or overhead even enters the chat.

The duo also revisits WhyQ’s 2021 partnership with Deliveroo to bring Mix & Match to hawker centres, and why WhyQ ultimately pivoted in 2023 to corporate B2B: scheduled, high-volume drops where food safety, invoicing, and reliability become “infrastructure”, not “convenience”.

Also Read: Deliveroo’s exit is a profitability warning shot

Interview excerpts:

In a social media post, you called Singapore B2C delivery “extremely tough” with “razor-thin margins.” What, specifically, breaks the unit economics here (last-mile costs, discounts, basket sizes, or merchant commissions) and which lever is the hardest to fix without damaging demand?

Saraf: The math for B2C delivery in Singapore is a zero-sum game. If you look at the breakdown for an average SGD20 basket size:

A merchant typically pays ~25-30 per cent commission, leaving the platform with a take of about SGD7 to SGD9.

In the current landscape, last-mile delivery costs — even with significant optimisation and aggregation — regularly fall within the SGD7 to SGD9 range.
When your entire gross margin is consumed by the rider’s fee before you even account for marketing, tech, or overhead, the model is broken. The most challenging lever to fix is consumer price sensitivity. If you pass that US$9 delivery cost directly to the customer, demand craters. If you squeeze the merchant further, they leave.

Most platforms like Grab and Foodpanda have used B2C food delivery to generate consumer demand and drive revenue through ads (featured merchants) and to support ancillary services like payments, taxi, and mart.

If a premium-led player couldn’t make Singapore work long-term, what does that say about the ceiling for differentiated, higher-quality delivery models in Southeast Asia? Does “premium” need a fundamentally different business model (not just branding)?

Saraf: In Southeast Asia, food is a passion, but delivery is treated as a utility, and the “on-demand” model is too expensive for a utility service.

For premium meals, a model in which the consumer bears a larger share of the delivery fee makes more sense. While this will impact demand, if a consumer wants a premium product, they are usually willing to pay a higher delivery fee. This can be seen in models like the one run by players like Oddle.

You said EBITDA positive is the 2026 survival metric. What are the three non-negotiable operating metrics you think delivery and food platforms should publish internally (and perhaps externally) to prove sustainability — contribution margin per order, retention without promos, rider utilisation, or something else?

Saraf: Food delivery platforms survive on a few simple yet powerful economic principles.

1. The batching rate. It is the number of orders a rider delivers on a single trip. Since profits are very thin, riders need to provide multiple orders on the same route. When one trip covers two or three deliveries instead of one, the cost per order goes down, and margins improve.
2. Purchase frequency. It refers to how often a customer orders each month. The more frequently users order, the less the company has to spend on discounts and marketing to bring them back. Subscription models exist mainly to increase this habit and make customer demand more predictable.
3. The average order value (AOV). It is critical because it costs almost the same to deliver a small order as a large one. Delivering $10 meal costs nearly as much as providing a $50 meal. So platforms need customers to spend more per order to spread out the delivery cost. That’s why they set minimum order amounts or promote combo deals.

Also Read: How mobile marketing is powering the next phase of food delivery growth in Southeast Asia

You wrote that for Deliveroo for Work users, this is “not just a vendor change… it’s an infrastructure decision.” In practical terms, what breaks first during a transition — billing/invoicing, dietary coverage, delivery service-level agreements, or merchant continuity — and how should companies stress-test a replacement provider before switching?

Singhvi: In a corporate environment, the first thing that breaks isn’t a line item on an invoice — it’s food safety. When you transition between providers, you are essentially trusting a new entity with the health of your entire workforce. Most platforms treat food as a commodity, but at the corporate level, it is a liability. If a provider hasn’t institutionalised regular kitchen audits, temperature monitoring, or strict protocols to prevent food from being cooked too early and left sitting, the system is fundamentally fragile.

How to stress-test a replacement: A one-week pilot is essential, but companies shouldn’t just look at the menu. They should stress-test for:

• Operational accountability: Is the delivery team in-house, or is it outsourced to the gig economy? Are the founders and support team available on WhatsApp for real-time updates?
• The “intelligence” layer: Does the provider meet complex dietary, budget, and packaging requirements? We use WhyQ Intelligence to ensure every meal is labelled with allergens and nutritional data—this is no longer “nice to have,” it’s a requirement for a modern workplace.
• Variety and reliability: Can they maintain merchant variety while consistently meeting delivery SLAs (no food safety incidents, no missing items, no incorrect items, no missing allergens or ingredients, sufficient portion size, no spillage, on-time delivery, and issue resolution) throughout the trial?

WhyQ positions itself around resilience: “2,000+ merchants”, “structured monthly invoicing”, and “operational discipline across food safety and delivery.” Which part is the hardest to build and maintain at scale in Singapore: merchant supply, logistics reliability, or enterprise-grade finance ops—and what do most consumer delivery platforms underestimate about that work?

Singhvi: Without question, the hardest pillar to build and maintain—and the one most underestimated by consumer platforms—is end-to-end food safety. When serving consumers, food safety is often treated as a merchant-level responsibility. At the enterprise level, that’s a massive risk. At WhyQ, we’ve built a proprietary safety infrastructure that starts long before a meal is even ordered. This is the hardest part to scale because it requires physical, boots-on-the-ground discipline.

What most corporate delivery platforms underestimate, and what makes our model unique, is the depth of our compliance:

• Expert audits: Every merchant undergoes a rigorous kitchen audit by food safety experts before they are even onboarded.
• Continuous monitoring: We don’t just audit once; we conduct quarterly site visits and maintain dynamic “merchant safety scores.”
• Chain of custody: We require merchants to retain daily food samples and to adhere to strict temperature-monitoring protocols. We ensure food is never cooked too early before dispatch—a common “hidden” risk in high-volume delivery.
• Full accountability: We maintain a database of all staff licenses and outlet certificates for our partners. In the rare event of an issue, we provide complete, transparent incident reports.

Deliveroo partnered with WhyQ in 2021 to bring Mix & Match to hawker centres. What did you learn from trying to productise hawker food for delivery—packaging, prep-time variance, peak-hour batching, pricing sensitivity—and what should platforms do differently if they want hawker economics to work?

Singhvi: We started this journey a decade ago. Our deep understanding of the Singaporean consumer is that there is a massive appetite for “Mix & Match” hawker dining. Still, it also showed why the B2C delivery model is fundamentally incompatible with hawker economics.

In the B2C world, the “on-demand” nature of the business is the enemy of the hawker. If you send a rider for a single SGD5 to SGD$7 order at 12:30 PM, the economics collapse. The platform’s take from a 30 per cent commission (SGD1.50 to SGD2.10) doesn’t even come close to covering the SGD7 to SGD9 last-mile delivery cost. To make it work, platforms have to charge high delivery fees that the mass-market consumer simply won’t pay for a “budget” meal.

Also Read: The future of food tech lies in building digitally autonomous restaurants

We realised that the only way to make hawker economics sustainable is to pivot to corporate B2B, which we did in 2023. Today, we work with leading tech giants and firms with over 50 pax daily orders across Singapore, in pockets like the Central Business District (CBD) and areas with limited access to good food, like Pasir Panjang, Science Park, and Paya Lebar Quarter. This moves hawkers from a “survival” model to a “growth” model through three key levers:

• High-volume predictability: Instead of the uncertainty of “on-demand” clicks, we provide hawkers with high-volume, 50-pax+ orders backed by fixed minimum order quantities (MOQs). This allows a solo operator to plan, prep, and batch with 100 per cent certainty.
• Off-peak utilisation: Corporate orders are scheduled. This allows hawkers to fulfil large-scale orders before their own peak walk-in lunch rush. We are effectively creating a “pre-lunch revenue shift” during hours that were previously underutilised.
• Segment access and sustainability: In a B2B model, we aggregate demand into a single “drop,” turning fragmented delivery into high-AOV infrastructure. This gives merchants access to a premium corporate segment they never had. Merchants are happy to offer sustainable commissions because the volume is incremental, efficient, and requires zero additional marketing spend from them.

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