Drivers Fuel Surge In French Food Delivery Firms

The number of food delivery companies increased dramatically in France over the summer while nearly all other industries suffered due to COVID-19, according to the National Council of Clerks.

Reuters reported the number of self-employed food delivery workers fueled the unexpected rise in these new companies in June and July.

While the country was in lockdown to prevent the spread of the coronavirus, the streets of Paris and other French cities were filled with bicycles making deliveries, the news service reported.

As restrictions eased, many drivers for Uber Eats, Deliveroo and Just Eat registered as companies. The council reported the number of new transport businesses grew by 29 percent for the two months compared to last summer. As a result, the overall number of new these firms rose by 10 percent in those two months, according to Xerfi I+C, the Paris-based private research institute.

The growth in these gig economy firms provided France with a bright spot as the country prepares for one of Europe’s worst economic slumps.

In contrast, licensing for the hospitality sector, retail, restaurants, real estate and construction registrations fell over the same period.

“The measures put in place by the government have prevented a wave of insolvencies,” said Sophie Jonval, president of the National Clerks Council, in a statement.

She added the third and fourth quarters would be a test of these new companies’ financial health.

In April, Uber Eats stepped up its launch into online grocery deliveries as the coronavirus continues to spread worldwide, stifling rideshare demand and crippling supermarkets.

At the time, Uber held talks with Carrefour, the French supermarket chain as it sought partnerships with grocery retailers from Brazil to France. The rideshare and food delivery giant is looking to roll out a boutique delivery service that will bring necessities to people in 30 minutes.

In June, the French Ministry for the Economy and Finance allocated €150 million ($170 million) through its government-backed lender, Bpifrance Financement SA, to invest in French companies if they are targeted by an unsolicited foreign investor.

The government said it may increase the fund to €500 million ($567 million) in 2021. Its mission will be to protect the country’s businesses by taking minority stakes in strategic companies.