Shares in British food-delivery startup Deliveroo tumbled as much as 30% on its first day of trading this week, even after the company priced its shares at the lower end of its IPO range.
This marked an unfavorable start for one of Europe’s biggest IPOs in a decade.
It seems like Deliveroo may have waited too long to cash in on the IPO frenzy for firms that managed to make the most of the “COVID-19 economy,” such as US peer DoorDash. The drop is linked in part to bad timing.
“Timing is everything in the IPO market,” Robert Johnson, finance professor at Creighton University’s Heider College of Business, told Insider. “While food delivery is popular in the COVID world, there is a strong likelihood that the service will have lower demand in a post-COVID world,” he said, adding that Deliveroo’s investors were looking to take advantage of its potential to benefit from the stay-at-home environment.
But that attitude appears to be changing as investors emerge from the pandemic, he said.
Separately, insurers including Aviva, Aberdeen, and Rathbones said they wouldn’t invest in Deliveroo because its riders do not get the minimum wage, sick leave, or holiday pay. That in itself made for poor promotion.
Aside from its workers-rights crisis, the poor performance of similar stocks like HelloFresh and JustEat seems to have had an effect on Deliveroo.
“The market is pricing in the impact of the successful UK vaccination campaign, which will lead to a return to restaurants later this year and this will have a negative impact on this entire business model,” said Alexander Graf, cofounder of e-commerce tech firm Spryker.
The Amazon-backed company initially saw a lot of fanfare over its IPO. But instead of a contingent of investors rushing in to drive its price higher, the stock slumped. That translates to a paper loss for those retail investors, including its customers and top drivers, who were unlucky enough to have been tempted in and paid the IPO price, said David Morrison, senior market analyst at Trade Nation. The stock may have recovered, but “this is undoubtedly a flop by anyone’s standards,” he said.
Morrison said this may not have happened to a similar company debuting in the US because UK investors perceive companies differently.
Deliveroo aims to paint itself as a tech disruptor just like Uber, he said. But to many, it’s a company with a young workforce dashing around on unlit bikes at night with boxes on their backs in the posher neighborhoods around London.
“That doesn’t seem very high-tech to me. Unlike Uber that has scalability, Deliveroo probably won’t work outside a big metropolis like London,” Morrison said. “Also, it has plenty of competition from the likes of Just Eat and Uber Eats. Finally, it doesn’t make money. While that’s also been the case for other tech companies, such as Uber and Amazon, what will Deliveroo’s future be like once lockdown ends?”
Yet some of the hardest-hit industries are now leading the recovery as they finally start to rehire workers after months of layoffs and furloughs, according to data from job search websites viewed by Insider.
Healthcare, retail, sit-down restaurants, and even hospitality businesses are seeing major job growth, as are pandemic-tested jobs in manufacturing, software development, warehouse and logistics. However, education and public sectors still lag behind, based on Insider’s analysis of government data and insights from five top job posting websites – Flexjobs, Indeed, Joblist, Monster, and Snagajob.
If you’re one of the many Americans still looking for work, here are some of the industries that are hiring at the fastest rates.
Hospitality and leisure
After hospitality jobs dropped by 63% last April, more than any other industry, they’re finally starting to bounce back – and the industry is even leading the US’ recent surge in job growth as lockdown orders begin to ease. Out of the 379,000 jobs added last month, 355,000 came from the hospitality industry, according to the latest job report from the Bureau of Labor Statistics.
As of March 15, hospitality jobs on Snagajob were up 54% from mid-February and 141% from last March. Indeed’s latest jobs report, using data through March 12, found that hospitality jobs were still down 27% from their pre-pandemic baseline of February 1, but had still seen an 8% jump from four weeks ago.
But the hospitality industry’s long-term outlook still depends heavily on whether and when business travel picks up again, with many experts predicting that companies will permanently cut back on travel expenses.
As more states allow sit-down dining again, restaurants are quickly ramping up to meet customers’ pent-up demand. Of the 355,000 hospitality jobs added in February, the BLS said that 286,000 – around 80% – came from restaurants and bars.
Snagajob found that sit-down restaurants saw a 16% month-over-month spike, even as quick-service restaurants were flat during that same time. Joblist CEO Kevin Harrington said server, bartender, and host jobs have all been growing recently.
Retail stores added 41,000 jobs last month, according to BLS data, though Indeed found that it’s been a mixed bag in metro areas where many people are working from home.
But Snagajob found that retail jobs are up 62% month-over-month, and, fueled by e-commerce, up 259% since mid-March 2020.
Despite the global pandemic, healthcare jobs tanked over the past year as people canceled routine checkups, preventative treatments, and elective surgeries, forcing hospitals to cut various jobs.
“More than two million healthcare jobs were lost in April 2020 alone, and only about half of these jobs have returned since,” Harrington said, adding that a recent Joblist survey “found that more than 50% of working Americans reported skipping medical or dental care in the last year.”
But amid the country’s massive vaccination effort, pharmacy jobs are up 10.9% from mid-February and 49.2% from February 1, 2020, while nursing and medical-technician jobs are also on the rise, according to Indeed.
Gig work, on-demand, and freelance jobs
The gig economy, which included a large, growing, and hard-to-measure segment of the US’ blue- and white-collar workforces even before the pandemic, saw a major boost as Americans scrambled to find any source of income.
Snagajob has seen posts for on-demand jobs increase 53% month-over-month and a whopping 470% year-over-year, while Joblist saw a 40% jump in “freelance” jobs last summer.
“This trend has continued in recent months as companies embrace remote freelancers as an alternative to making full-time hires in this uncertain economic climate,” Harrington said. “The supply of skilled remote labor is as high as it has ever been right now, and many companies have now figured out how to conduct business remotely.”
While blue-collar gig jobs may have shifted from moving people to moving food, packages, and other goods, during the pandemic, Harrington said all types of gig work are here to stay.
Major companies like Amazon, Uber, Google, and Facebook already make widespread use of contractors because they’re cheaper, pose less legal risk, and allow companies to grow and shrink their workforces more flexibly. Other industries are increasingly adopting this model.
Warehouse and logistics jobs
The boom in e-commerce during the pandemic sparked a rise in warehouse jobs that has continued even past the holiday season.
Snagajob found a 38% month-over-month jump in warehouse and logistics jobs, and Indeed saw a 7% rise in loading and stocking jobs since mid-February. Longer term, Indeed has seen loading and stocking jobs climb 44.7% since its pre-pandemic baseline, and Joblist saw more than a 100% jump year-over-year in warehouse jobs.
Tech and technical positions
As was the case before the pandemic, there’s once again significant demand for software engineers and project managers, according to Joblist, while Monster has seen a spike in jobs involving computational and math skills.
Remote-friendly business functions
While not industry-specific, job postings for business roles that can be done remotely have soared during the pandemic as companies become more accepting of remote workforces.
Flexjobs said the top 10 career categories that had an increase in remote job openings from March 2020 to December 2020 included: marketing, administrative, HR and recruiting, accounting and finance, graphic design, customer service, writing, mortgage and real estate, internet and e-commerce, and project management.
Construction, government, and education jobs still lagging
Some industries have yet to restart hiring efforts in significant numbers – and some even continue to bleed jobs.
Monster and Joblist have both seen recent declines in construction jobs, partly due to the winter weather and related supply chain issues.
State and local government jobs also declined recently, according to Joblist and BLS data, while Flexjobs also found a lower availability of remote jobs in this sector.
School closures and plummeting college enrollment rates during the pandemic hit schools’ pocketbooks hard, and many have yet to bounce back. Indeed found just a 2.7% increase in teaching jobs since mid-February, down 4.6% since pre-pandemic days.